Month: December 2024

The UK may be spared the worst effects of Donald Trump’s proposed tariffs on global goods trade due to its economic reliance on services rather than goods, according to Andrew Bailey, Governor of the Bank of England.
Trump has suggested imposing tariffs of up to 60% on Chinese exports to the US and 20% on imports from other countries. Economists warn such measures could trigger a global inflationary spiral, but Bailey suggested the UK’s economy is uniquely positioned to withstand the impact.
“The UK is an open economy, but it is also true that more of our trade is in services rather than goods — tariffs don’t work in the same way on services,” Bailey said. Services now account for 54% of UK exports to the US, including finance, insurance, and education, which have grown significantly since Brexit. Unlike goods, services are subject to non-tariff barriers such as regulatory differences, which are less impacted by customs levies.
Bailey acknowledged that the ultimate inflationary effect of the tariffs remains uncertain, depending on how other countries and exchange rates react. However, he highlighted that the UK is less exposed than economies like Germany or Italy, which have larger trade deficits with the US.
Swati Dhingra, a trade economist and external member of the Bank’s monetary policy committee, recently noted that tariffs could have disinflationary effects, as producers might reduce prices to maintain market share in large economies. This contrasts with concerns about tariffs driving up consumer prices.
Other central bankers, including Christine Lagarde of the European Central Bank, have also downplayed the inflationary impact of tariffs on economies outside the US.
Bailey’s comments come amid a slight rise in UK inflation above the Bank’s 2% target. While he expects inflation to stabilise, he noted that uncertainty remains around how businesses will respond to the government’s upcoming increase in national insurance contributions.
As Britain navigates these challenges, the country’s reliance on services and its smaller exposure to US goods tariffs may provide a degree of economic resilience in the face of escalating global trade tensions.
Read more:
Andrew Bailey: UK likely to avoid worst impact of Trump’s tariffs

The UK government is exploring the renationalisation of British Steel in a bid to safeguard thousands of jobs at its Scunthorpe site, amid stalled negotiations with its Chinese owner, Jingye, over a £1 billion investment plan.
Business Secretary Jonathan Reynolds is leading discussions with Jingye to determine a funding agreement for the company’s transition to greener steel production. However, with little progress made, sources suggest the government is open to taking over the company, reversing Margaret Thatcher’s 1988 privatisation of the steel industry.
A Whitehall insider noted that nationalisation is a “last resort” due to the substantial financial commitment it would entail. However, unions and industry advocates are urging the government to act decisively to protect the Scunthorpe plant, which employs 4,000 people and remains the UK’s sole producer of steel from iron ore.
British Steel’s blast furnaces at Scunthorpe, which accounted for 0.8% of the UK’s carbon emissions in 2023, are at the heart of the debate. Plans to replace them with an electric arc furnace — crucial to meeting the UK’s net-zero targets by 2050 — have been delayed as Jingye resists committing the necessary investment, leaving the government potentially liable for the full cost.
Renationalisation would not be without challenges. Experts warn that allowing the blast furnaces to cool without proper shutdown measures could render them unusable, while managing operations during a transition to electric furnaces could cost tens of millions.
The decision also carries political implications. Labour leader Keir Starmer has criticised past neglect of the steel industry, pledging to make Britain a leader in steel production. Sharon Graham, general secretary of Unite, welcomed the prospect of nationalisation, stating, “The UK government being an investor of first resort is an important first step.”
Negotiators face a tight deadline, as British Steel is expected to exhaust its current supply of raw materials by the end of January. Unions, including GMB and Unite, have proposed a multi-union plan to protect jobs and production, calling on the government to prioritise nationalisation over taxpayer support for private sector failures.
British Steel, which was briefly nationalised in 2020 before its acquisition by Jingye, has struggled with high costs and increased global competition. The ongoing standoff raises questions about the future of steel production in the UK and its role in national infrastructure and security.
A spokesperson for the Business Secretary emphasised the government’s commitment to securing a “green steel transition” that supports jobs and offers value for taxpayers. Discussions are ongoing, but all options, including nationalisation, remain on the table.
Read more:
Ministers consider renationalising British Steel to save thousands of jobs

The OECD has significantly upgraded its growth forecast for the UK, crediting Rachel Reeves’s £70 billion-a-year public spending package.
The UK economy is now expected to grow by 0.9% in 2024 and 1.7% in 2025, up from May forecasts of 0.4% and 1.0%. However, the Paris-based organisation cautioned that this growth comes at the expense of rising public debt and persistent inflation.
The UK’s economic upgrade contrasts sharply with downgrades for France, Germany, and Italy, highlighting stagnation in the eurozone’s largest economies. However, the OECD noted that Britain’s growth is fuelled by an unprecedented increase in government expenditure, pushing debt to an unsustainable level projected to exceed 100% of GDP.
The OECD warned that this fiscal stimulus would keep inflation above the Bank of England’s 2% target for the next two years, driven by wage pressures and elevated public spending. Despite expectations that interest rates will fall to 3.5% by early 2026, monetary policy could remain tighter for longer to counteract persistent price pressures.
The organisation also highlighted the UK’s shrinking labour force as a critical challenge. Britain has seen one of the largest post-pandemic contractions in workforce participation among OECD nations, second only to Costa Rica. The OECD stressed the need for benefit reforms and increased childcare support to encourage more people, particularly women, to return to work.
While Reeves welcomed the growth upgrade, positioning the UK as the fastest-growing European economy in the G7 over the next three years, the OECD urged policymakers to balance fiscal stimulus with sustainable debt management.
The Chancellor’s maiden Budget, funded through £40 billion in tax hikes and borrowing, also included a commitment to reforming planning laws, childcare support, and welfare systems to boost productivity and living standards. However, critics warn that the long-term consequences of higher borrowing costs and structural deficits could overshadow these short-term gains.
Read more:
UK growth forecast upgraded after Reeves’s £70bn spending boost

A government-supported group is being established to represent the UK’s mid-sized businesses, often overlooked despite their significant contribution to the economy.
According to a NatWest report, these “unsung” firms could add an additional £115 billion to the UK economy by 2030 with the right support, driving growth particularly in regions outside London and the southeast.
Mid-sized businesses account for just 0.5% of UK companies but employ over 7.3 million people — more than a quarter of the private sector workforce. They play a crucial role in areas such as the West Midlands, northeast England, Yorkshire and the Humber, and Scotland, the report found.
However, challenges including skill shortages, poor regional infrastructure, and a lack of representation are holding back their growth. Unlike Germany’s Mittelstand, the UK’s mid-market firms lack a collective identity and advocacy platform, leaving their interests overshadowed by larger corporates and small business groups.
To address this, a “mid-market council” is set to launch in 2025, supported by NatWest and the Department of Business and Trade. The council will act as a unified voice for the sector, representing key industries and addressing critical issues such as infrastructure, planning, and skills shortages.
Paul Thwaite, NatWest’s CEO, stressed the importance of giving mid-sized companies greater visibility: “They don’t have a collective voice. There’s a lot of talk about small businesses, and large corporates have their own platform. These businesses need to be treated as a distinct segment.”
The report highlighted that poor infrastructure — including transport, broadband, housing, and grid connectivity — disproportionately affects mid-sized firms, particularly outside the southeast. A lack of skilled workers and a restrictive planning regime further hinder their ability to expand and innovate.
Jonathan Reynolds, business secretary, welcomed the creation of the council, noting that mid-sized businesses have the potential to outpace other market segments in growth, exports, and productivity. He said the council would “amplify their voice” and unlock untapped potential in the sector.
Read more:
Government-backed council to champion ‘unsung’ mid-sized businesses

The Bank of England has warned that escalating trade wars, geopolitical instability, and mounting global debt levels are amplifying risks to the UK’s financial system.
Officials noted the country’s vulnerability due to its “open economy with a large financial sector,” according to the Bank’s latest Financial Stability Report.
Andrew Bailey, the Bank’s governor, highlighted the uncertain environment, stating, “We are living in a world that is more uncertain on a number of fronts. We are watching these risks very carefully.”
Key concerns include the fragmentation of global trade as conflicts in Ukraine and the Middle East intensify and as the US considers imposing tariffs on countries such as China, Mexico, and Canada. Rising government debt in nations like the UK and the US also poses significant vulnerabilities.
The report identified increasing risks outside traditional banking, particularly in the shadow banking sector, encompassing private equity firms and hedge funds. The sector has been linked to market crises, such as the 2022 pension fund turmoil and the Archegos collapse earlier that year.
To address these risks, the Bank conducted the world’s first stress test of the UK’s broader financial system, simulating a severe market shock across banks, hedge funds, pension funds, and insurers. The findings revealed potential fragility in the sterling corporate bond market and a mismatch of expectations in the gilt repo market, signalling vulnerabilities during periods of financial stress.
While Britain’s biggest banks passed separate annual stress tests with sufficient capital buffers, the Bank announced that these assessments would now occur biennially, with supplementary evaluations in intervening years.
The Bank also flagged concerns over private equity ownership of life insurers, cautioning that it could pose additional systemic risks.
Despite these challenges, the report reaffirmed the resilience of traditional banking institutions. However, as global uncertainties rise, the Bank’s scrutiny of less-regulated financial sectors underscores the evolving complexity of safeguarding the UK’s financial stability.
Read more:
Bank of England warns of growing financial risks from trade war

The Financial Conduct Authority (FCA) has come under fire for its stringent regulation of the crowdfunding industry, which critics claim is stifling investment and cutting off vital funding streams for small and medium-sized enterprises (SMEs).
The UK Crowdfunding Association (UKCFA) has warned that these regulations could cost the economy billions of pounds in lost investment.
In a letter to Tulip Siddiq, the City minister, the UKCFA argued that the FCA’s reforms are discouraging investors by making the regulatory framework too restrictive. The group, representing over 20 crowdfunding platforms, called for an independent review of small business finance to address the issue.
Bruce Davis, chairman of the UKCFA, highlighted the UK’s position as one of the most highly regulated markets for crowdfunding globally. He warned that this over-regulation is deterring investors and driving some companies to seek funding in European jurisdictions with less restrictive regimes.
The FCA’s reforms include measures such as risk warnings, bans on “inducements” to invest, tougher appropriateness tests, and “frictions” designed to prevent impulsive investment decisions. However, these changes have reportedly increased marketing costs, reduced platforms’ ability to attract new investors, and made fundraising uneconomical for some platforms.
The association criticised the regulator for failing to balance consumer protection with the need for a vibrant investment ecosystem. It also pointed to a rise in unauthorised and unregulated investment offers, which it claims pose a greater risk to investors.
The group estimates that the over-regulation is cutting off up to £16 billion in potential funding for SMEs, exacerbating financial barriers for smaller businesses at a time when access to capital is critical.
A Treasury spokesperson defended the government’s commitment to balancing investor access with consumer protection, while an FCA spokeswoman stated that they are working to promote investor confidence and open discussions about risk-taking.
Despite these assurances, the UKCFA insists that more proportionate regulation is essential to maintain the UK’s status as a global leader in capital markets while supporting sustainable economic growth through crowdfunding.
Read more:
FCA over-regulation risks choking crowdfunding and harming small businesses

Dale Vince, the renewable energy entrepreneur and founder of Ecotricity, has publicly declared his interest in purchasing The Observer, should the ongoing negotiations with Tortoise Media fall through.
Vince, known for his commitment to environmental causes and significant financial backing of the Labour Party, envisions holding the iconic Sunday newspaper in a trust to safeguard its editorial independence.
Vince, whose estimated net worth is £100 million, highlighted concerns over the dominance of right-wing media in the UK. In a statement to Press Gazette, he said: “We’ve already got too many right-wing media barons (often tax exiles) controlling what people read and hear and ultimately believe. Out of that concern, I’ve expressed an interest in the sale of The Observer and discussed the situation with the GMG.”
Vince’s proposition echoes the current ownership model under the Scott Trust, which oversees Guardian Media Group (GMG) and is designed to maintain the editorial independence of The Guardian and The Observer. While he did not disclose specifics about his potential bid, Vince emphasised that his primary focus would be ensuring the title’s journalistic freedom and integrity.
At present, GMG is engaged in advanced and exclusive negotiations with Tortoise Media, the “slow news” digital outlet founded by James Harding, a former editor of The Times and director of BBC News. The potential deal has drawn both interest and controversy.
Tortoise has pledged to invest £25 million into The Observer over the next five years, despite reporting losses of £4.6 million in 2022. However, critics, including long-serving staff and former editors, have questioned the feasibility and wisdom of the acquisition.
Paul Webster, who recently retired after 28 years with The Observer, described the proposed sale as potentially damaging to the Scott Trust’s reputation, calling it “based on two false premises” — that The Observer’s finances threaten the survival of The Guardian and that Tortoise has the resources to sustain it.
The staff of GMG, many of whom are National Union of Journalists (NUJ) members, have voiced strong opposition to the potential sale. Union members recently voted to strike next month, citing concerns about job security, journalistic independence, and the future direction of the newspaper under new ownership.
While GMG has stated that no other bids with substantive detail have been received, the controversy has delayed key decision-making. A Scott Trust meeting originally scheduled for Monday has reportedly been postponed, further fuelling uncertainty.
Vince’s interest in the title adds another dimension to the unfolding drama. As the founder of Ecotricity, one of the UK’s leading green energy providers, Vince has built a reputation for championing sustainability and progressive causes. His £5 million contributions to the Labour Party reflect his political leanings, and he has been outspoken about the need for balance in the British media landscape.
His suggestion of holding The Observer in a trust mirrors the ethos of the Scott Trust, which Vince praised. This model, he suggests, would protect the paper from commercial or political pressures, allowing it to continue its role as a vital voice in British journalism.
Founded in 1791, The Observer holds the distinction of being the world’s oldest Sunday newspaper. Its long history of investigative reporting and in-depth analysis has made it a cornerstone of British media. However, in recent years, the paper has faced financial difficulties, raising questions about its sustainability and role in a rapidly changing media environment.
For GMG, the stakes are high. The Scott Trust’s £1.3 billion fund underpins both The Guardian and The Observer, and any misstep in divesting the latter could have far-reaching implications for the group’s reputation and operations.
If the Tortoise deal proceeds, it will mark a significant departure from the Scott Trust’s traditional ownership model, sparking debates over the future of independent journalism in the UK. On the other hand, if Vince enters the fold, it could represent a new era for The Observer, aligning its mission with the tycoon’s progressive values.
Read more:
Dale Vince expresses interest in buying The Observer to enhance media plurality

Young professionals are leaving the UK in favour of sunnier climates and more favourable tax regimes in Southern Europe, according to Vlad Yatsenko, the billionaire co-founder and chief technology officer of digital banking giant Revolut.
This trend, he warns, poses a significant challenge to Britain’s position as a global talent hub, particularly in the competitive fintech sector.
Yatsenko, who co-founded Revolut in 2015 alongside CEO Nik Storonsky, highlighted that an increasing number of the company’s employees are leveraging remote working opportunities to relocate abroad. “Now the UK competes with Southern Europe,” he said. “Before, younger people who wanted to build their careers would go to London. But these days, people are going [to Southern Europe] because they are attracted by better financial rewards, incentives from tax authorities, and the lifestyle.”
Countries like Portugal (pictured) and Italy have introduced attractive tax breaks aimed at under-35s to lure foreign talent and retain their own younger workforce. Lisbon, in particular, has emerged as a burgeoning start-up hub, while Italy is experiencing a surge in early-stage technology funding, reaching $2 billion (£1.8 billion) so far this year. Dealroom data indicates that Italy is on track for its second-best year of funding since 2021, bucking the trend of declining investment in other nations.
Yatsenko, a Ukrainian-born entrepreneur who moved to London after stints in Germany and Poland, emphasised that the UK government needs to take proactive steps to retain talent. “The Government needs to do better,” he urged, pointing out that rival countries are “creating environments to attract talent.”
Despite his concerns, Yatsenko acknowledged that the UK remains a competitive place to launch a fintech business. Revolut, headquartered in Canary Wharf, employs over 10,000 people worldwide and allows its staff to work fully remotely or on a hybrid basis. The company’s flexible working model has made it easier for employees to consider relocating without sacrificing their careers.
The exodus of young talent is not just a Revolut issue but a broader challenge facing the UK’s tech and finance sectors. Start-up founders have expressed worries that policy changes, such as increases to capital gains tax announced in October’s Budget, could disincentivise entrepreneurship and accelerate the talent drain.
Revolut’s growth trajectory has been impressive. Over the summer, the company secured a banking licence in the UK, paving the way to expand its range of regulated products, including plans to offer fully digital mortgages. The fintech firm also launched a secondary share sale, valuing the business at $45 billion. Yatsenko owns approximately 3% of the company, giving him a paper fortune exceeding $6 billion, according to data provider Beauhurst.
The company’s success comes amid a backdrop of rigorous performance oversight. Yatsenko noted that Revolut maintains its hybrid working model by closely monitoring staff performance. Under-performers are given a stark choice: leave immediately or improve within six weeks. This approach contrasts with other companies where managers have pushed to end home working due to concerns over productivity.
“I read it as managers do not know what people in their teams are doing—our approach is different,” Yatsenko explained. “Because there is this transparency in this way, we can be distributed.”
Revolut’s stance on remote working reflects a broader shift in workplace culture accelerated by the pandemic. However, it also highlights the challenges businesses face in retaining talent when employees have greater flexibility to choose where they live and work.
The UK has traditionally been a magnet for international talent, particularly in sectors like finance and technology. London, in particular, has been seen as a global hub offering unparalleled career opportunities. Yet, with remote working becoming more accepted and other countries offering competitive incentives, the UK’s position is being tested.
Tax incentives in countries like Portugal and Italy make them attractive destinations. Portugal’s Non-Habitual Resident (NHR) regime offers substantial tax benefits for new residents for up to ten years. Italy has implemented similar schemes, providing tax breaks to entice foreign professionals and returning Italian nationals.
These incentives, combined with a desirable lifestyle and lower cost of living, are proving hard to resist for many young professionals. The Mediterranean climate, cultural richness, and relaxed pace of life offer an appealing alternative to the UK’s often high-stress, high-cost environment.
Yatsenko’s comments serve as a wake-up call for policymakers. To retain its status as a leading hub for talent and innovation, the UK may need to reconsider its tax policies and invest in creating an environment that remains attractive to the younger workforce.
The government’s recent tax decisions have raised eyebrows in the start-up community. Increases in capital gains tax could discourage investment and entrepreneurship, potentially driving innovators to more favourable jurisdictions. The concern is that without competitive incentives, the UK could see a decline in new business ventures and a subsequent impact on the economy.
Revolut itself continues to thrive, reaching 50 million customers worldwide and boasting over 10 million users in the UK alone. The company’s plans to introduce fully digital mortgages signal its intent to disrupt traditional banking further. Initially launching these products in Lithuania, Ireland, and France, Revolut aims to bring them to the UK market, potentially offering consumers more streamlined and accessible financial services.
As the fintech landscape evolves, companies like Revolut are at the forefront of change. However, the ability to innovate and grow is closely tied to access to top talent. If the UK cannot retain its brightest minds, it risks falling behind in the global tech race.
In conclusion, Vlad Yatsenko’s warning sheds light on a critical issue facing the UK’s future as a centre for innovation and enterprise. The allure of remote working combined with competitive incentives abroad is leading to a talent exodus that could have long-term implications. It is imperative for the UK government and businesses to address these challenges to ensure that the country remains an attractive destination for the next generation of entrepreneurs and professionals.
Read more:
Revolut co-founder warns of British talent exodus amid remote working shift

In a move set to captivate audiences across the nation, Lord Alan Sugar’s remarkable journey from modest beginnings to becoming one of the UK’s most prominent business figures is being adapted into a television drama series.
The entrepreneur, famed for his role as the formidable host of The Apprentice, has secured a writer to bring his life story to the small screen, promising an insightful look into his ascent in the business world.
The idea for the series was ignited after Lord Sugar watched recent films such as Tetris and BlackBerry, both of which delve into the real-life stories behind iconic tech products and their creators. Recognising the compelling nature of these narratives, he saw an opportunity to share his own experiences in a similar format.
Andrew Bloch, Lord Sugar’s long-term adviser, confirmed that discussions are underway with production companies keen to bring the project to fruition. “There are ideas on the table spanning from a straight biopic through to a drama inspired by real-life events,” Bloch told Jewish News. It is understood that major broadcasters, including Netflix, the BBC, and ITV, have expressed interest in the project, signalling the high expectations surrounding the adaptation.
Born in Hackney, East London, in 1947, Lord Sugar’s story is a quintessential tale of grit and determination. He began his career selling car aerials and electrical goods out of a van he had bought with his savings of £100. At the age of 21, he founded Amstrad, an electronics company that would become a household name in the UK during the 1980s and 1990s. Amstrad’s affordable and innovative products, particularly in the computing and audio sectors, played a significant role in making technology accessible to the masses.
In 2007, Lord Sugar sold Amstrad to BSkyB for £125 million, marking a significant milestone in his business career. Beyond Amstrad, he has held various influential roles, including serving as the chairman and part-owner of Tottenham Hotspur Football Club from 1991 to 2001. His tenure at the club was marked by efforts to modernise its operations, though it was not without controversy.
Lord Sugar’s transition into television came with the launch of the UK version of The Apprentice in 2005. His no-nonsense approach and sharp critiques made him a standout personality on the show, contributing to its success and his own celebrity status. The programme has not only entertained millions but also provided a platform for budding entrepreneurs to showcase their talents.
However, his journey has not been without its challenges and disputes. Notably, he had a well-documented clash with media mogul Robert Maxwell over the purchase of Tottenham Hotspur. Additionally, his outspoken nature has sometimes led to public controversies, including accusations of holding outdated views on women in the workplace and allegations of racism stemming from comments made on social media.
Despite these incidents, Lord Sugar has maintained his position as a respected figure in the business community. He was knighted in 2000 for services to the home computer and electronics industry and was appointed as a life peer in the House of Lords in 2009, sitting on the Labour benches until 2015 before resigning due to disagreements with the party’s direction.
The forthcoming television series aims to offer an unvarnished look at Lord Sugar’s life, exploring both his professional achievements and personal experiences. By collaborating with Noah Pink, the writer behind Tetris, Lord Sugar is enlisting a creative force capable of translating complex business narratives into engaging storytelling.
Producers are expected to begin casting soon, with much speculation over who might portray the entrepreneur at various stages of his life. The series presents an opportunity to delve into significant moments, such as the founding of Amstrad, the challenges of scaling a business during economic fluctuations, and his foray into football club management.
The adaptation is anticipated to balance the depiction of his business acumen with insights into his character and personal motivations. Friends of Lord Sugar have indicated that he is keen to replicate the success of recent tech biopics, which have managed to make intricate business dealings accessible and entertaining to a broad audience.
The decision to adapt Lord Sugar’s life story comes at a time when there is a growing appetite for dramas centred around entrepreneurship and innovation. Such stories resonate with viewers who are interested in the human aspects behind corporate success and the societal impacts of technological advancements.
For the business community, the series could serve as both inspiration and a case study in entrepreneurship, highlighting the challenges and triumphs of building a business from the ground up. It may also prompt discussions on leadership styles, corporate ethics, and the evolving nature of the business landscape over the past few decades.
From an entertainment perspective, the series promises to add depth to the portrayal of business leaders on screen, moving beyond stereotypes to present a nuanced character study. It also reinforces the trend of high-profile figures participating actively in the production of their biographical adaptations, ensuring authenticity in the storytelling.
As the project moves forward, industry observers will be watching closely to see how Lord Sugar’s story is crafted for television audiences. The involvement of established writers and interest from major broadcasters suggest that the series has the potential to be a significant addition to the genre of business dramas.
The adaptation also reflects a broader cultural interest in understanding the personal journeys of those who have shaped industries and influenced public life. By sharing his story, Lord Sugar not only cements his legacy but also contributes to a dialogue on entrepreneurship, resilience, and the complexities of achieving success.
The upcoming television series on Lord Alan Sugar’s life is poised to be a compelling exploration of one of Britain’s most iconic business figures. With a narrative that spans humble beginnings, corporate triumphs, public controversies, and media stardom, the adaptation promises to offer valuable insights into the man behind the boardroom persona.
As audiences await further details, including casting announcements and release dates, there is palpable excitement about the potential of the series to inspire and engage viewers. Whether one is interested in business, personal development, or simply enjoys a well-told story, the portrayal of Lord Sugar’s journey is set to be a noteworthy addition to the television landscape.
Read more:
Lord Sugar’s life to be adapted into major television series