Month: December 2025

Britain remains stuck at the bottom of the G7 for overall investment, despite Labour’s pledge to inject billions of pounds into public spending over the next two years, according to international data.
Figures from the Organisation for Economic Co-operation and Development show that total investment, combining both public and private spending, stood at just 18.6 per cent of GDP in the third quarter of the year. That leaves the UK trailing all other G7 nations, including the United States, Germany, France and Japan.
The data underlines a long-running weakness in the British economy. The UK has recorded the lowest investment rate in the G7 in 23 of the past 31 years, a factor widely blamed for poor productivity growth and weak long-term economic performance.
By comparison, Japan recorded the highest investment rate among the G7 at 27 per cent, while Germany, despite being in a two-year recession, invested around 20 per cent of GDP over the same period.
Labour has made boosting investment a central plank of its economic strategy, pledging to increase public capital spending on infrastructure, transport and housebuilding. Economists at PwC estimate that public investment will rise by £13 billion in 2026–27, marking the largest two-year increase since the 2008 financial crisis.
However, there are growing concerns that this surge in government spending will not be matched by the private sector. PwC’s chief economist, Barret Kupelian, warned that private investment is expected to stagnate due to weaker business confidence and slower profit growth.
“There will be a much stronger focus on domestic growth levers from the government, particularly public investment picking up at a record pace,” Kupelian said. “But private investment is unlikely to respond as strongly in the near term.”
The scale of the challenge is stark. EY estimates that up to 1,000 major investment projects are planned to start or complete by 2040, with government-backed capital spending on track to reach £1.1 trillion. Yet even this would leave a significant funding gap.
According to EY-Parthenon, meeting Labour’s wider ambitions, including defence spending rising to 3 per cent of GDP by the end of the decade, would leave an investment shortfall of £583 billion. If defence spending increases to 5 per cent of GDP by 2035, the gap could widen to £817 billion, placing further strain on the public finances.
Mats Persson, global leader of EY-Parthenon, said the UK faces mounting pressure from overlapping investment demands. “The government has made progress in unlocking capital for infrastructure, but the long-term funding requirements across energy, defence, health and transport are rising rapidly,” he said.
Economists have long argued that Britain’s low investment levels are a major drag on productivity. Business investment drives innovation and technology adoption, while public investment provides the housing and transport networks needed to support growth.
Louise Haigh, the former Labour transport secretary, said the problem reflected decades of short-term policymaking. “Underinvestment has plagued the UK economy for half a century,” she said. “Our five-year political cycle doesn’t give businesses the long-term certainty they need to commit capital.”
Reform UK’s deputy leader, Richard Tice, accused the government of creating a hostile climate for investors. He said uncertainty and tax changes had pushed capital elsewhere and claimed his party would prioritise deregulation and incentives for wealth creation.
With private investment faltering and public spending under pressure, economists warn that closing Britain’s investment gap will require more than headline funding commitments — and a sustained effort to restore confidence across the business community.
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Britain stuck at bottom of G7 for investment as private spending stalls

American men have lost their work ethic and increasingly feel entitled to a comfortable life without applying themselves, according to Wilbur Ross, who served throughout Donald Trump’s first term.
Ross, the Wall Street investor once dubbed the “king of bankruptcy”, said younger generations have been “coddled” by growing up in a wealthy society, weakening the drive to work that underpinned previous generations and threatening long-term economic growth.
“It used to be that the mantra for any young person was work hard and you can make progress and do better than your parents did,” Ross said. “It never occurred to anyone to not work, at least not anyone I knew. There’s been a whole change in that.”
He argued that a combination of state benefits and parental prosperity had created a sense of entitlement. “I think all these [benefits] programmes, and also the relative prosperity of the current generation’s parents, have created a feeling that they’re entitled to a nice lifestyle, independently of whether they perform any kind of meaningful work,” he said.
“If you’re an able-bodied person who’s not willing to even seek a job, why should you prosper?”
Overall labour force participation among Americans aged 25 to 54, the so-called prime-age workforce, fell sharply during the pandemic but has since recovered to 83.8 per cent, one of the highest levels in nearly a quarter of a century. However, Ross and other economists say that headline figure masks a profound long-term shift among men.
Prime-age male participation has been in structural decline since the 1960s, even as female participation has surged to record levels. The divergence is especially pronounced among younger workers.
Analysis by the Brookings Institution shows that labour force participation among 25-year-old men has fallen in every successive generation since 1969. For men born in the late 1990s, participation at that age stands at about 84 per cent, down from 93 per cent for those born roughly 45 years earlier.
By contrast, participation among women of the same age has climbed steadily, rising from 66.3 per cent to 76.6 per cent over the same period.
Ross said the trend among men was particularly damaging for economic prospects. “I think there are a lot of men who just don’t want to work that hard,” he said.
Workforce participation, he added, was one of the three critical drivers of economic growth. “One is growth in the population of working-age people — that’s something you have no control over in the near term. The other two are productivity and workforce participation. And of the two, for the moment, workforce participation is probably the more important.”
Economists have pointed to several factors behind the decline in male participation, including the loss of industrial jobs, the rise of service-sector roles traditionally dominated by women, higher incarceration rates leaving many men with criminal records, the expansion of disability benefits, and persistent weaknesses in education and skills training.
Together, they warn, these forces risk leaving a growing cohort of men disengaged from work — with long-term consequences for productivity, public finances and social cohesion.
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Men have lost their work ethic, says Trump’s former commerce secretary

A third of British businesses are planning to invest in artificial intelligence in 2026 as firms sharpen their focus on productivity, skills and technology in an increasingly competitive market.
Research from Lloyds Bank shows that AI is becoming a central pillar of growth strategies, with companies looking to automate processes, improve efficiency and strengthen long-term competitiveness.
The Lloyds Business Barometer, based on a survey of 1,200 firms, found that productivity improvement is the top priority for businesses heading into the next year. Alongside AI investment, 35 per cent of companies said they plan to invest in team training in 2026, recognising that new technologies require new skills to deliver real value.
Paul Kempster, managing director for commercial banking coverage at Lloyds Business & Commercial Banking, said the findings highlighted a shift towards more strategic, future-focused investment.
“These are priorities that will support businesses’ long-term growth,” he said. “They help firms not only capitalise on opportunities in the year ahead, but also build strong foundations well beyond 2026.”
Earlier research from Lloyds underlines why AI is attracting growing attention. In a study published in June, 82 per cent of businesses using AI said it had boosted productivity, while 76 per cent reported an improvement in profitability. Retailers reported the strongest productivity gains, while manufacturers were most likely to see a positive impact on profits.
Despite the momentum, barriers remain. Businesses cited the cost of AI tools, shortages of specialist skills, data privacy concerns and energy usage as factors slowing adoption. Even so, 56 per cent of firms said they intend to make new AI investments over the next year, while a quarter of those yet to adopt the technology said they plan to do so.
The barometer also points to a modest improvement in sentiment. Overall business confidence rose by five points in December to 47 per cent, up ten points over the course of 2025. Optimism about the wider UK economy climbed to a four-month high, with many firms expecting price pressures to continue easing.
However, caution remains evident on the consumer side. Early indicators suggest weaker high-street performance ahead of Christmas, with in-store footfall on the final Saturday before Christmas down almost 7 per cent year on year.
Taken together, the data paints a picture of businesses looking inward, investing in technology and people to drive efficiency, while remaining alert to fragile consumer demand and ongoing economic uncertainty.
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A third of UK businesses plan AI investment in 2026 as confidence ticks up

A new government scheme aimed at tackling long-term workplace sickness has been dismissed by business leaders and advisers as woefully inadequate, with critics warning it amounts to “emptying the ocean with a teaspoon”.
The initiative, announced this morning by the Department for Work and Pensions, will fund occupational health training for 5,000 line managers working in small and medium-sized enterprises across England. The free training, delivered by the Institution of Occupational Safety and Health, will run between January and March next year and is designed to help managers spot early signs of health-related issues and intervene before employees fall out of work altogether.
Ministers say the scheme will help address what they describe as an inherited crisis, with more than 2.8 million people currently signed off as long-term sick — one of the highest rates in the G7. Government-commissioned analysis has found that around 800,000 more working-age adults are now out of work due to sickness than in 2019.
The financial cost to small businesses is significant. Replacing an employee lost to ill health costs more than £11,000 on average, while each day of sickness absence is estimated to cost firms about £120 in lost profit. The training will focus on equipping line managers to recognise warning signs such as persistent fatigue, changes in behaviour and rising absence levels, and to have more supportive conversations about workplace adjustments.
The Minister for Employment, Dame Diana Johnson, said the scheme would give small businesses tools they often lack. “Too often, small businesses lose skilled staff to health issues without the tools to support them, and that doesn’t help anyone,” she said. “This free training gives line managers the confidence to have the right conversations and make adjustments that could help keep people in work.”
However, experts across data, HR, finance and advisory sectors questioned both the ambition and impact of the programme.
Rohit Parmar-Mistry, founder of Burton-on-Trent-based Pattrn Data, said the numbers simply did not add up. He argued that training 5,000 managers would make little difference to a problem affecting millions. “This feels like outsourcing the problem to already overworked SME managers,” he said, warning that spotting health issues earlier does nothing to fix chronic illness, long NHS waiting lists or wider systemic failures. “A manager can recognise fatigue, but they can’t fix public healthcare or broken work environments.”
Kate Underwood, founder of Kate Underwood HR and Training, said the initiative addressed only part of the problem. While she welcomed efforts to improve managers’ confidence in having difficult conversations, she warned that the real pressure on small firms came from the cost of sickness absence, the complexity of reasonable adjustments and delays in accessing occupational health advice. “Training helps, but it doesn’t remove the financial and legal strain that sinks small teams,” she said.
From a wellbeing perspective, Sarah Gatford, founder of Sarah Gatford Ltd, said the success of the scheme would depend on whether it went beyond compliance. She argued that genuine progress required managers to build trust and psychological safety, not simply follow checklists. “If this helps managers ask ‘How can I help?’ instead of ‘When will you be back?’, it’s a start, but 5,000 managers across the entire SME sector is still a drop in the ocean,” she said.
Others were more blunt. Riz Malik, director of R3 Wealth, described the initiative as disconnected from the real priorities of small businesses. “This probably isn’t on the top 100 list of things SMEs want from government going into 2026,” he said, calling it another example of policymaking divorced from commercial reality.
Scott Gallacher, director at Rowley Turton, said the funding level exposed the gap between political messaging and operational reality. He noted that almost 80% of SMEs provide no occupational health training at all, across an economy with roughly 5.7 million small businesses. “When you break the numbers down, this equates to pennies per person off work,” he said. “That suggests this is more about optics than impact.”
While ministers insist the scheme is a first step towards keeping more people in work, critics argue that without deeper investment in healthcare, workplace flexibility and sustainable job design, the initiative risks becoming another well-intentioned policy that fails to shift the underlying problem.
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Workplace sickness scheme branded ‘teaspoon solution’ as experts warn government plan lacks scale

The manufacturing trade body Made in Britain has raised concerns over the alleged unauthorised use of a logo closely resembling its own by Reform UK.
In a statement, Made in Britain said it had become aware that Reform UK was using a logo it believes to be “substantially similar” to its registered mark across marketing materials and merchandise. The organisation stressed that no authorisation, licence or consent had been granted for such use.
Made in Britain said it maintains a strictly neutral political stance and does not endorse, support or affiliate with any political party or movement. It added that the use of its logo, or any similar insignia, by political organisations is expressly prohibited under its rules.
The body, which represents and promotes British manufacturers at home and overseas, said its branding exists solely to support its members and advance British commerce. As a result, it does not permit its brand identity to be associated with political campaigns or messaging.
The statement underlines the growing sensitivity around branding, intellectual property and perceived political alignment as political parties increasingly use merchandise and visual identity as part of their campaigning efforts.
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‘Made in Britain’ body challenges Reform UK over alleged unauthorised logo use

Thousands of taxpayers chose to spend part of their Christmas break tackling their tax affairs, with more than 4,600 people filing their Self Assessment returns on Christmas Day alone, new figures show.
Data released by HM Revenue and Customs reveals that 37,435 people submitted their returns between Christmas Eve and Boxing Day, suggesting that for a growing number of taxpayers, festive filing is becoming a seasonal habit.
Christmas Eve proved the busiest of the three days, with 22,350 returns filed. The peak hour was between 11am and noon, when 3,159 customers hit submit. On Christmas Day itself, 4,606 people completed their returns, with the busiest hour falling between 1pm and 2pm. Boxing Day saw a further 10,479 returns filed, peaking mid-afternoon.
While many opted to deal with tax rather than turkey, HMRC found attitudes were mixed when it spoke to shoppers at Manchester’s Christmas markets, where most said they would rather focus on festive food than finances.
With just one month to go until the 31 January filing deadline, HMRC is urging those who have yet to complete their return to get started as soon as possible.
Myrtle Lloyd, HMRC’s chief customer officer, said millions of people had already filed and could start the new year with “one less thing to worry about”.
“For anyone yet to file, don’t leave it until the last minute,” she said. “Filing now means you know exactly what you owe and have time to arrange payment.”
Taxpayers who submit their return by 30 December may be able to pay any tax owed through their PAYE tax code, while filing early also gives more time to explore payment plans if needed.
HMRC highlighted the use of its app and online support tools, including step-by-step guidance, webinars and YouTube videos, to help customers complete their returns and pay what they owe. The department also pointed to a new digital PAYE service for the High Income Child Benefit Charge, allowing some claimants to leave Self Assessment altogether and settle the charge through their tax code instead.
HMRC also reminded customers that Winter Fuel Payments received in autumn 2025 do not need to be included on returns for the 2024-25 tax year, as these will be recovered in the following year’s return.
With the deadline fast approaching, the message from HMRC is clear: filing early can reduce stress, provide clarity on liabilities and make the start of 2026 a little easier.
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Festive filers sleigh their Self Assessment returns as thousands log on over Christmas

There’s a particular sound that stays with you once you’ve lived in the English countryside. Not birdsong, that’s too obvious, but the deeper rhythm of things: the tractor coughing into life at dawn, Chameau boots crunching on gravel, the hooves of the horses going out for a hack, the soft murmur of a village pub where everyone knows exactly why you’re there even if they’ve never seen you before.
I had a house in rural Northamptonshire once. Not a fantasy “weekend retreat”, but a place where life actually happened. One evening, over a pint of ‘landlord’ and slightly judgemental, the village gamekeeper offered to teach me how to shoot. “You get good enough,” he said, “and maybe you can join us on a day at the estate.”
A few sessions at the clays with a beautiful Purdey side-by-side and I was hooked, not just on hitting the target – which I am told my hit rate was very impressive – but on the world around it. The quiet discipline. The sense of responsibility. The unspoken understanding that this was not about bloodlust or bravado, but stewardship. About knowing the land, respecting it, and earning your place within it.
Which is why, as 2025 limps to a close, I find myself deeply uneasy about the future of Britain’s rural economy, and the way of life bound up in it.
We’ve been told, repeatedly, that concerns about farming, shooting, gamekeeping and rural business are either nostalgic indulgences or political dog whistles. Watch a few episodes of Clarkson’s Farm and tell me that again with a straight face. Strip away the jokes and celebrity sheen and what you’re left with is a documentary about a sector living permanently on the brink,  one failed harvest, one policy tweak, one cost spike away from collapse.
That brinkmanship became painfully clear this year when the government set its sights on agricultural inheritance tax relief. What began as a plan to end long-standing protections for family farms triggered outrage across rural Britain. As reported by the Financial Times, the subsequent retreat, raising thresholds and softening the blow, was presented as a compromise. But uncertainty, once introduced, doesn’t politely leave again. It lingers. It freezes investment. It accelerates exits.
Family farms are not tax shelters. They are capital-intensive, low-margin, generational businesses whose value is tied up in land rather than liquidity. Treating them like dormant wealth piles rather than working enterprises is how you dismantle a sector quietly, without ever admitting you meant to.
And it’s not just farmers feeling the squeeze. Gamekeeping, shooting and countryside management support tens of thousands of jobs and underpin rural tourism, hospitality and supply chains. A stark warning was sounded recently in The Telegraph’s analysis of the decline of gamekeeping, which laid bare how rising costs, regulation and political hostility are pushing skilled rural workers out altogether.
This isn’t culture war fluff. It’s economics.
Add to that the sense, increasingly hard to shake, that rural Britain is culturally misunderstood by those writing policy. Labour’s proposals around animal welfare and trail hunting have reignited fears that legislation is being shaped through an urban moral lens, with The Guardian reporting warnings from countryside groups that rural voices are being marginalised rather than engaged.
Meanwhile, the data tells its own grim story. Farm closures continue to outpace new starts, with thousands of holdings disappearing under the weight of rising costs, labour shortages and unpredictable returns, as highlighted by FarmingUK. When a farm goes, it rarely goes alone. The contractor loses work. The feed supplier closes. The pub shortens its hours. The village hollows out.
What worries me most is that this erosion is happening quietly, politely, without the drama that usually forces political reckoning. There’s no single villain. No obvious cliff edge. Just a steady draining away of viability until one day we look around and wonder where everyone went.
The countryside isn’t a theme park or a television backdrop. It’s an economic ecosystem that feeds us, employs us and anchors communities. Once it’s gone, you don’t rebuild it with grants and slogans.
I learnt to shoot because a gamekeeper trusted me with his craft. That trust, between land and people, tradition and modernity, economy and culture, is what’s really under threat. If policymakers keep treating rural Britain as a sentimental inconvenience rather than a strategic asset, they may wake up one day to find the countryside still looks beautiful… but no longer works. And that, unlike a missed clay, is a mistake you don’t get to take another shot at.
Read more:
I worry for our rural economy – and yes, it’s personal

Hospitals across England are increasingly turning to artificial intelligence to ease pressure on accident and emergency departments, as a new AI-powered forecasting tool is deployed to help predict when demand will be at its highest.
The system, now in use across 50 NHS organisations and available to all trusts, is designed to identify likely surges in A&E attendances days and weeks in advance. By analysing a wide range of data, from historical hospital admissions and seasonal illness trends to Met Office temperature forecasts and day-of-week patterns, the tool helps managers plan staffing levels, bed capacity and resources more effectively.
Ministers say the technology will enable patients to be seen and treated more quickly during peak periods, while reducing last-minute pressure on frontline staff. The rollout comes as emergency departments face heightened winter demand, driven by record flu cases, cold weather injuries and seasonal illness. More than 18 million flu vaccines have already been delivered this autumn, with the AI system continuing to learn from evolving seasonal health data.
For NHS staff, the forecasting tool offers clearer long-term planning and earlier warnings of potential bottlenecks, helping trusts put the right people in the right place before pressures escalate. For patients, the aim is shorter waits and smoother journeys through emergency care during the busiest times of year.
The initiative forms part of the Prime Minister’s AI Exemplars programme, which is applying artificial intelligence across public services, including health, education, justice, tax and planning, to modernise systems and improve outcomes.
Technology Secretary Liz Kendall said AI was already transforming healthcare and that demand forecasting marked the next step in that journey. She said the tool would help hospitals predict pressure points, get patients treated faster and support NHS staff during the most challenging months of the year.
Health Innovation Minister Dr Zubir Ahmed said the technology would help hospitals manage winter pressures more effectively, particularly as flu cases rise. He described the rollout as part of a broader ambition to move the NHS from analogue systems to a digital future under the government’s 10-year health plan.
Early feedback from NHS managers has been positive, with local leaders reporting improved decision-making around staffing and capacity. Integrated care boards in areas including Coventry and Warwickshire, and Bedfordshire, Luton and Milton Keynes, are already using the tool to support operational planning.
The forecasting system is one of several AI initiatives being rolled out under the Exemplars programme. Other projects include AI-assisted diagnostics to help clinicians identify conditions such as lung cancer more quickly, automated discharge summaries to speed up patient flow from wards, and the GOV.UK chatbot, which provides instant, plain-English answers to public queries using official government information.
Ministers say the growing use of AI in healthcare is central to building an NHS that is more resilient, efficient and capable of meeting rising demand — particularly during winter — while improving both patient experience and staff wellbeing.
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AI helps hospitals tackle A&E bottlenecks as NHS rolls out demand-forecasting technology

The government is facing renewed political pressure to disclose whether Jeffrey Epstein played any role in discussions surrounding the sale of a taxpayer-backed commodities business during Labour’s last period in office.
Senior Conservatives have tabled a series of parliamentary questions demanding clarity on the $1.7bn (£1.35bn) sale of parts of Royal Bank of Scotland’s Sempra joint venture to JP Morgan in 2010, when Lord Mandelson was business secretary.
The intervention follows disclosures contained in an internal JP Morgan report from 2019, which was later filed in a New York court. The document included emails in which Epstein claimed to have facilitated meetings between Mandelson and Jes Staley, then chief executive of JP Morgan’s investment banking arm, at a time when the bank was exploring the acquisition of RBS’s commodities assets.
The exchanges took place months after Epstein had been released from prison in the United States following a conviction for soliciting a minor, a fact that has intensified scrutiny of his continued access to senior political and financial figures.
In a written parliamentary question, Kevin Hollinrake, the Conservative Party chairman and former business minister, asked what records the Department for Business and Trade held relating to correspondence involving Mandelson, Epstein and the Sempra transaction. Responding on behalf of the department, business minister Kate Dearden said that “any such information is not readily available and could only be obtained at disproportionate cost”.
That response has been challenged by further answers to parliamentary questions tabled by Mike Wood, a shadow Cabinet Office minister, which confirmed that records from the period are held electronically and can be searched by keyword.
Commenting on the discrepancy, Hollinrake said the government needed to “come clean” about Mandelson’s role in the deal. “It is simply not credible to claim it is too costly to retrieve records when the government admits they are electronic and searchable,” he said, adding that the position “only fuels concerns that Labour ministers have something to hide”.
The Treasury, responding separately to questions on the matter, said it had carried out a “proportionate search” of its archives and found no evidence of correspondence or meetings between Epstein and Treasury ministers or officials in relation to the sale. It stressed that oversight of RBS following its bailout was a Treasury responsibility.
A source close to Mandelson dismissed the allegations, describing them as “nonsense” and insisting that there were no meetings involving Epstein and that the business department had no role in the transaction. “It was a Treasury matter and he had absolutely no involvement whatsoever,” the source said.
RBS, which was bailed out by the government during the 2008 financial crisis, was required to divest a number of assets under EU competition rules, including its stake in the Sempra commodities venture.
Mandelson was dismissed as UK ambassador to the United States by Sir Keir Starmer earlier this year following revelations about his association with Epstein. Meanwhile, Jes Staley was banned by the Financial Conduct Authority in July from holding senior roles in UK financial services due to his links to Epstein.
Epstein died in a New York jail in 2019 while awaiting trial on further charges of sex trafficking minors. Recent releases of documents by the US Department of Justice detailing his network of associates have reignited scrutiny of his relationships with politicians and financiers on both sides of the Atlantic.
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Tories press Labour over Jeffrey Epstein’s alleged role in RBS commodities sale