Introduction: UK businesses plead for no more tax rises
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK businesses are urging the government to resist any temptation to impose further taxes on them, warning it would undermine Keir Starmer and Rachel Reeves’s mission to grow the economy.
Business leaders are gathering at the QEII Conference Centre in central London today, for the British Chambers of Commerce’s annual conference, where memories of last autumn’s budget tax hikes are still fresh.
Shevaun Haviland, the BCC’s director general, will declare that if the government is serious about growth, then it cannot tax business any further.
She’ll warn that businesses were taken by surprise by the size and scale of the rise in National Insurance Contributions in the last budget.
Haviland is expected to say:
“We were unprepared for the huge burden placed upon us, and it led many of us to rethink our growth plans. As a result, our business confidence measures have fallen to their lowest levels since 2022.
For the government to achieve its Growth Mission, people need to stay in work and businesses need to invest. As always, businesses soak it up and move forward, but they feel like they are wading through treacle.”
New research released by the BCC shows that the tax hike has hit hiring. It found that:
-
One third of firms (32%) said they have either made staff redundant or are planning to as a direct result of the NICs increase.
-
13% say they have already made staff redundant and 19% say they are actively considering redundancies
Business chiefs will also hear from Andrew Bailey, the governor of the Bank of England, and Kemi Badenoch, the Conservative Party leader.
The BCC’s intervention comes as the government struggles to keep within its fiscal rules, with forecasts it may need to raise taxes in the autumn.
Ministers also face a significant rebellion the benefit cuts within its welfare bill. Abandoning the bill would blow a £5bn hole in Rachel Reeves’ budget.
The government is also trying to woo businesses with a flurry of strategic plans. Earlier this week it unveiled its industrial strategy, and today it is presenting a trade strategy – which it says will protect vital UK industries and help businesses export.
The agenda
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9.15am BST: “Senior cabinet minister” addresses BCC’s annual conference.
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9.45am BST: Shevaun Haviland, director general of the BCC, addresses its conference
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12pm BST: Andrew Bailey, governor of the Bank of England, addresses BCC annual conference
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1.30pm BST: Latest estimate of US GDP for Q1 2025
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3.25pm Kemi Badenoch MP, Leader Of The Opposition, addresses BCC annual conference
Key events
Pound highest since January 2022 against dollar
Sterling has hit its highest level in three and a half years against the dollar, following reports that Donald Trump could appoint a new US central bank early.
The dollar has weakened, after the Wall Street Journal reported that Trump was considering announcing his pick to succeed Jerome Powell – whose term expires next May – earlier than expected.
Trump has been increasingly exasperated by Powell, as the Federal Reserve resisted his calls for lower interest rates. Announcing Powell’s successor early would put the focus on where the next Fed chief thought interest rates should be set.
The WSJ reported:
In recent weeks, the president has toyed with the idea of selecting and announcing Powell’s replacement by September or October, according to people familiar with the matter. One of these people said the president’s ire toward Powell could prompt an even-earlier announcement sometime this summer.
Trump is considering former Fed governor Kevin Warsh and National Economic Council director Kevin Hassett, according to people familiar with the matter. Treasury Secretary Scott Bessent is being pitched to Trump by allies of both men as a potential candidate, some of these people said. Other contenders include former World Bank President David Malpass and Fed governor Christopher Waller.
The dollar has dropped by 0.2% against a basket of currencies this morning, pushing the pound up to $1.37 for the first time since January 2022.
Britain has focused too much on trying to sign major trade deals with other countries, ministers have said, as they lay out the case for a big shift in post-Brexit trade policy.
The change forms the heart of the government’s new trade strategy, which ministers are publishing today.
The strategy marks a turn away from the days of pursuing wide-ranging free trade agreements with countries such as the US and India, which were sold as one of the biggest prizes of Brexit.
Instead, ministers say they now want to focus on more modest agreements such as deals to recognise foreign professional qualifications, which can help the UK’s services sector in particular… More here:
Shell says it has ‘no intention’ of making offer for BP
Energy giant Shell has declared it has “no intention” of making an offer for rival BP, after takeover speculation swept the City last night.
In a statement to the City, Shell insists it has not approached BP, and that no talks have taken place.
It says:
In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer.
Under the takeover code, this means Shell can’t bid for BP for six months, unless it has the agreement of BP’s board, or if another company bids for BP, or if BP asks for a code waiver, or if there is a material change of circumstances.
Shell explains:
This is a statement to which Rule 2.8 of the Code applies and accordingly Shell confirms it has no intention of making an offer for BP. As a result Shell will be bound by the restrictions set out in Rule 2.8 of the Code.
Last night, the Wall Street Journal reported that “early-stage talks” were taking place between Shell and BP to agree a historic £60bn takeover to create one of the world’s largest oil and gas companies.
BP has been the subject of takeover speculation as investors have been unconvinced by its turnaround plan, pushing its value down over the last year.
Introduction: UK businesses plead for no more tax rises
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK businesses are urging the government to resist any temptation to impose further taxes on them, warning it would undermine Keir Starmer and Rachel Reeves’s mission to grow the economy.
Business leaders are gathering at the QEII Conference Centre in central London today, for the British Chambers of Commerce’s annual conference, where memories of last autumn’s budget tax hikes are still fresh.
Shevaun Haviland, the BCC’s director general, will declare that if the government is serious about growth, then it cannot tax business any further.
She’ll warn that businesses were taken by surprise by the size and scale of the rise in National Insurance Contributions in the last budget.
Haviland is expected to say:
“We were unprepared for the huge burden placed upon us, and it led many of us to rethink our growth plans. As a result, our business confidence measures have fallen to their lowest levels since 2022.
For the government to achieve its Growth Mission, people need to stay in work and businesses need to invest. As always, businesses soak it up and move forward, but they feel like they are wading through treacle.”
New research released by the BCC shows that the tax hike has hit hiring. It found that:
-
One third of firms (32%) said they have either made staff redundant or are planning to as a direct result of the NICs increase.
-
13% say they have already made staff redundant and 19% say they are actively considering redundancies
Business chiefs will also hear from Andrew Bailey, the governor of the Bank of England, and Kemi Badenoch, the Conservative Party leader.
The BCC’s intervention comes as the government struggles to keep within its fiscal rules, with forecasts it may need to raise taxes in the autumn.
Ministers also face a significant rebellion the benefit cuts within its welfare bill. Abandoning the bill would blow a £5bn hole in Rachel Reeves’ budget.
The government is also trying to woo businesses with a flurry of strategic plans. Earlier this week it unveiled its industrial strategy, and today it is presenting a trade strategy – which it says will protect vital UK industries and help businesses export.
The agenda
-
9.15am BST: “Senior cabinet minister” addresses BCC’s annual conference.
-
9.45am BST: Shevaun Haviland, director general of the BCC, addresses its conference
-
12pm BST: Andrew Bailey, governor of the Bank of England, addresses BCC annual conference
-
1.30pm BST: Latest estimate of US GDP for Q1 2025
-
3.25pm Kemi Badenoch MP, Leader Of The Opposition, addresses BCC annual conference