Author: AbellMoney

Britain’s biggest supermarkets are pumping hundreds of millions of pounds into promotional deals as competition in the grocery sector heats up amid ongoing cost of living pressures.
Almost 30 per cent of supermarket spending was on special offers and discounts in the four weeks to 20 April, according to figures from market research group Kantar. The surge in promotional activity equates to £347 million spent on price cuts, many linked to loyalty card schemes.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocers have been offering big price cuts to stay competitive. They’ve invested in price cuts which were the main driver of promotional growth.” At Tesco and Sainsbury’s, nearly 20 per cent of items sold are part of a price match scheme, featuring in almost two-thirds of customer baskets.
The aggressive push on discounts comes as supermarkets grapple with thin profit margins and intensifying competition. Last month, Asda warned of significantly lower profits this year as it pledged to invest more heavily in lower prices—a move that triggered a £4 billion slump in the combined market value of listed rivals Tesco, Sainsbury’s and Marks & Spencer.
Asda has since cut prices on 1,500 products, including popular items like Cathedral City cheddar cheese and Head & Shoulders shampoo. Since January, Asda said it had slashed prices across nearly 10,000 products. Yet despite these efforts, Asda was the only major supermarket to see a decline in sales over the past three months compared with the same period last year.
While promotional activity is increasing, grocery price inflation remains a challenge for shoppers. Inflation rose to 3.8 per cent in the four weeks to 20 April, its highest level in over a year and well above the recent low of 1.4 per cent in October 2024.
The Easter period helped boost overall spending, with supermarket sales up 11 per cent compared with last year’s Easter run-up, despite a 17.4 per cent jump in chocolate confectionery prices. McKevitt noted that chocolate egg volumes still rose slightly by 0.4 per cent year-on-year, and sunny weather also led to a 31 per cent surge in burger sales as shoppers fired up their barbecues.
In terms of market share, Tesco remains the UK’s largest supermarket with 27.8 per cent, followed by Sainsbury’s at 15.3 per cent and Asda at 12.3 per cent. Aldi holds fourth place with an 11 per cent share, having overtaken Morrisons in 2022. Ocado continues to be the fastest-growing grocer, with sales up 11.8 per cent over the past year, although its overall share remains modest at 1.9 per cent.
With inflation still pressuring household budgets and competition intensifying, supermarkets are likely to keep up the battle for shoppers’ loyalty well into the rest of the year.
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UK supermarkets spend hundreds of millions on promotions as grocery price war intensifies

The sugar tax currently applied to fizzy drinks could soon be extended to milkshakes and similar products under new government proposals revealed on Monday.
The Treasury launched a consultation on plans to remove the exemption for dairy-based drinks—and their non-dairy alternatives such as oat and rice milk—bringing them under the scope of the soft drinks industry levy (SDIL). The government is also considering tightening the sugar threshold that triggers the levy, lowering it from 5g to 4g per 100ml.
Chancellor Rachel Reeves first indicated last year that the government would consider broadening the scope of the levy. The Treasury has now confirmed its intention to move ahead with the changes, citing health concerns over the high sugar content of many milk-based drinks.
According to government analysis, about 203 pre-packed milk-based drinks currently on the market—accounting for 93 per cent of the category’s sales—could be affected unless manufacturers reduce their sugar levels.
The SDIL was introduced in 2018 by the Conservative government as part of a broader anti-obesity drive. Milk-based drinks were originally exempted due to concerns over the importance of calcium intake, particularly for children. However, the Treasury now says that such drinks contribute only 3.5 per cent of young people’s calcium intake, suggesting that the potential health benefits of their consumption are outweighed by the risks posed by excess sugar.
“By bringing milk-based drinks and milk substitute drinks into the SDIL, the government would introduce a tax incentive for manufacturers to build on existing progress and further reduce sugar in their recipes,” a Treasury spokesperson said.
Following the introduction of the SDIL, 89 per cent of fizzy drinks sold in the UK were reformulated to avoid the tax, significantly reducing their sugar content.
However, the proposal has drawn criticism from some quarters. Christopher Snowdon, head of lifestyle economics at the free-market thinktank the Institute of Economic Affairs, said: “The sugar tax has been such a dramatic failure that it should be repealed, not expanded. Sugar taxes have never worked anywhere. What happened to Starmer’s promise to not raise taxes on working people?”
The government’s consultation on the proposed changes is open and will run until 21 July, inviting views from industry stakeholders, public health groups and the wider public.
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Milkshakes could face sugar tax under Treasury plans to expand levy

Keir Starmer’s Labour government has been warned that its tough stance on benefits risks costing the UK economy more than £38 billion a year while pushing more people into poverty and increasing pressure on public services.
The anti-poverty charity the Trussell Trust said that, despite Labour’s repeated promises of no return to austerity, attempts to curb welfare spending could have severe economic and human consequences. In a report commissioned from WPI Economics, the charity argued that Britain’s elevated poverty levels are already sapping potential output and damaging the nation’s finances.
The intervention comes as the government prepares to publish its child poverty strategy in June, amid growing unrest among Labour MPs over the £5 billion in benefit cuts announced by Chancellor Rachel Reeves in her spring statement. Ministers are reportedly ruling out scrapping the controversial two-child benefit limit introduced by the Conservatives, a policy campaigners warn could drive child poverty to record highs.
The Trussell Trust’s report highlights that as many as 9.3 million people, including 3 million children, faced hunger and hardship in the financial year ending March 2023. Defined as living more than 25 per cent below the poverty line set by the Social Metrics Commission, these households struggle with day-to-day essentials.
The economic toll is significant. Lower employment rates and weakened productivity among people in deep poverty mean the UK economy is missing out on £38.2 billion in annual output. This, in turn, deprives the Treasury of £18.4 billion in tax revenues and forces £5.3 billion of extra spending on social security support. Additional demands on services such as the NHS, social care and education are estimated to cost the exchequer another £13.7 billion annually.
Helen Barnard, director of policy, research and impact at the Trussell Trust, urged ministers to urgently rethink their welfare policies, particularly cuts to disability benefits and the maintenance of the two-child limit. “Slashing support for disabled people who most need our collective protection from hunger is cruel, irresponsible, and out of touch with what the public wants,” she said. “Turning this tide would have huge benefits, not just to individuals, but for us all.”
The charity argued that abolishing the two-child limit alone would lift 670,000 people—including 470,000 children—out of hardship, reducing costs to the economy and public services by more than £3 billion.
It also called for the introduction of an “essentials guarantee” within universal credit to ensure that basic living costs are met, a measure that could lift more than two million people out of deep poverty.
A spokesperson for the Department for Work and Pensions defended the government’s approach, saying: “We have set out a sweeping package of reforms to health and disability benefits that genuinely supports people back into work and lifts people out of poverty, while putting the welfare system on a more sustainable footing.”
As Labour prepares its next phase of economic reforms, the warning from the Trussell Trust highlights the political and fiscal risks of pursuing further cuts in a country still grappling with the legacy of years of squeezed living standards.
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Labour’s benefit cuts could cost UK economy billions, warns Trussell Trust

More than a quarter of UK workers are worried that artificial intelligence could lead to job losses, according to new research that has prompted calls for businesses to adopt clear policies on AI use and maintain open communication with staff.
A survey conducted by Acas—the public body advising on workplace relations—found that 26 per cent feared AI would cause job cuts. Meanwhile, 17 per cent expressed concerns about AI making errors, and 15 per cent were worried about the consequences of weak regulation.
In response, Acas urged employers to have “open conversations” with employees about how AI will be deployed within their organisations. It also advised businesses to develop clear workplace policies and consult staff on any changes, particularly if the adoption of AI could lead to alterations in job roles or employment terms.
“If there is an expectation that certain roles begin using AI, that could mean a change of terms and conditions,” Acas said. It also emphasised that employers investing in AI should “highlight how it can improve employees’ roles and reassure staff that human involvement will still be needed”.
The findings come amid mounting public debate over AI’s potential to reshape the workforce. Predictions vary widely: the Institute for Public Policy Research warned last year that nearly eight million UK jobs could be lost in a “jobs apocalypse”, with younger and lower-paid workers particularly vulnerable. Meanwhile, the Tony Blair Institute for Global Change suggested that while up to three million private sector jobs could be displaced, the impact would be gradual and largely offset by the creation of new roles.
Neil Carberry, chief executive of the Recruitment and Employment Confederation, responded to the Acas report by urging employers and policymakers to focus on skills development rather than fear. “AI will transform the job market, but history shows technology creates new opportunities even as it disrupts existing roles. Instead of fearing change, we must focus on new skills for workers and preparing for the jobs of tomorrow,” he said.
Carberry also highlighted the importance of Skills England, a new government initiative tasked with identifying and addressing digital skills gaps, in helping workers adapt to the evolving employment landscape.
As AI technology advances, Acas said, proactive communication and careful workforce planning would be crucial in managing the transition and maintaining employee trust.
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One in four workers fear AI could cost them their jobs, Acas warns

Small businesses in the North East of England are preparing to showcase their products and services to buyers from across the globe, as the government’s “Made in the UK, Sold to the World” export roadshow kicks off this week in Blyth, Northumberland.
The event, the first of eight planned across the UK, will see nearly 100 buyers from 19 overseas markets—including South Korea, Mexico, India, Poland and Germany—meet with British exporters, with a particular focus on clean energy firms. The roadshow series will also visit Belfast, Edinburgh, Birmingham and Cardiff, and aims to connect small businesses with international markets more quickly and effectively.
Gareth Thomas, minister for services, small businesses and exports, said: “Through these roadshows, the government is focusing on supporting key growth sectors, making it quicker and easier for smaller businesses to connect with markets, grasp export opportunities and expand.”
Each roadshow will focus on a different sector, with upcoming events dedicated to advanced manufacturing, life sciences, and financial services. In Blyth, alongside the international buyers, 30 commercial officers from UK embassies and consulates will be on hand to offer advice and facilitate connections free of charge.
Among those attending is Alex Marshall, group business development director at Clarke Energy, a manufacturer of gas-powered power generators. Marshall, who also serves as an export champion for the government, welcomed the initiative: “The event is an excellent place to discuss the latest international trends and export opportunities for UK businesses in the clean energy sector.”
In addition to direct meetings, the roadshows will include workshops and seminars led by the government-backed UK Export Academy, offering practical guidance on areas such as market research and routes to market.
Despite strong government support, recent figures suggest that small businesses still face challenges when it comes to exporting. A 2024 study by the Department for Business & Trade found that only 18 per cent of businesses with revenues over £500,000 considered themselves experts in exporting last year, down from 24 per cent the previous year.
Exporters interested in participating in upcoming roadshows can register their interest through the Department for Business & Trade’s official website.
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Overseas buyers line up to hear pitches from small UK exporters at new government roadshow

Better Society Capital (BSC), the UK’s leading social impact investor, has reached a major milestone, passing £1 billion in investments aimed at tackling the country’s most pressing social challenges.
Originally launched in 2011 as Big Society Capital, the fund was established with £400 million from dormant bank accounts and £200 million from four of Britain’s biggest high street banks. Over the past 13 years, it has invested in 3,750 charities and social enterprises, making sufficient returns to reinvest and grow its impact. To date, BSC has helped attract almost £3 billion in additional funding from private and philanthropic sources for projects across housing, youth services and healthcare.
Stephen Muers, chief executive of BSC, said the £1 billion figure reflected the success of a model built on recycling capital sustainably: “It shows the value of recycling capital and being sustainable. It is testament to the model. And the reason we have been able to get to that milestone is because the whole market has been growing. There are more investors seeing the potential to realise social impact alongside financial returns.”
Muers pointed to the increasing investment in housing for those at risk of homelessness as a standout example. BSC-backed initiatives like Resonance, a social impact investor managing £325 million in assets, are now providing stable homes for 3,600 people across Greater Manchester, Merseyside, Bristol and Oxford.
“The number of people in precarious housing situations continues to grow — with around 100,000 families currently in temporary accommodation,” Muers said. “We started small in 2014, proving the model by leasing properties to charities. Now, larger investors like local government pension schemes are stepping in, helping scale the solution.”
BSC targets a modest 1 per cent net annual return across its deployed capital over five years, with a 3 per cent return from its investment portfolio to cover operational costs. Although inflation has eroded some of its capital’s real value, BSC views its performance as proof that sustainable, outcomes-focused investment can supplement traditional public spending.
Despite the success, BSC has not received any new dormant account allocations in the past year. The previous government had committed to directing an additional £350 million from dormant accounts to organisations like BSC by 2028.
Meanwhile, the new Labour government has signalled strong interest in using outcome-based investment to “rewire the state”, setting up a social impact investment advisory group to help direct funding. A decision on future allocations is expected in the second phase of the chancellor’s spending review, due later this spring.
Muers said he hoped to see future investments prioritise support for young people and disadvantaged families — especially where traditional public services struggle. “Particularly where there are complex issues that people face, where traditional public services don’t always deal with them very well, where people are passed around between the NHS, schools, local authorities; we have examples of where investment-backed models have been good ways to deliver those services.”
With a growing appetite among investors to achieve social as well as financial returns, Muers said the sector was poised to play a bigger role in helping government meet its long-term social goals. “There is a big prize here, potentially, in bringing to bear investors who want impact on issues that the government cares about and can collaborate well.”
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Better Society Capital surpasses £1bn in investments tackling UK social challenges

Bank of England governor Andrew Bailey has acknowledged that the United States “has a point” in criticising global trade imbalances, lending support to concerns raised by the Trump administration as the UK grapples with the economic fallout of rising tariffs and geopolitical uncertainty.
Speaking at an event hosted by the Institute of International Finance in Washington, Bailey said the central bank was “working through” the potential economic implications of President Trump’s sweeping tariff measures ahead of the Bank’s next interest rate decision in May.
The governor’s comments came during a week of high-stakes meetings hosted by the International Monetary Fund (IMF), and marked his most conciliatory tone yet towards Trump-era grievances about global trade. Bailey said long-standing surpluses among major manufacturing exporters — particularly China — pose structural risks to the global economy.
“Scott Bessent [the US Treasury secretary] has a point,” Bailey said. “There are issues with the way the system is working which pose harder questions about how the system operates.”
He criticised China’s reliance on weak domestic demand and export-led manufacturing, arguing the model was “not sustainable forever”. Bailey, an economic historian by background, said that today’s global imbalances mirror the very problems the Bretton Woods institutions were designed to address in the aftermath of the Second World War.
“The original Bretton Woods design put the emphasis on adjustment on deficit countries,” he explained. “The US was at that point the world’s surplus country and now that has turned around. We have to get back to the point of symmetrical adjustment and responsibilities.”
His remarks follow an intervention by US Treasury Secretary Scott Bessent, who called on the IMF and World Bank to abandon their focus on climate change and diversity and return to “core macroeconomic work”. In a sharp critique, Bessent accused the IMF of being “Polyanna-ish” in its latest external sector report and said the institution was failing to confront China’s “globally distortive policies”.
While Bailey defended the multilateral system as essential to global stability, he agreed the IMF should focus on its primary mission. “It is important that there is a commitment to the multilateral institutions,” he said, adding, however, that “it is not the job of the IMF to police trade imbalances”.
The UK government has also signalled alignment with Washington on some trade issues. Chancellor Rachel Reeves, who is also in Washington for the IMF and World Bank spring meetings, said global imbalances “should be reduced” and expressed support for removing both tariff and non-tariff barriers in order to boost trade with the US.
“The world has changed, and we are in a new era of global trade,” Reeves said, adding that the UK will not lower domestic standards on food or vehicles in response to American demands, but remains open to broader cooperation on economic and security partnerships.
IMF managing director Kristalina Georgieva has attempted to strike a conciliatory tone in the face of mounting US pressure, urging surplus economies to adjust their policies and pledging to sharpen the IMF’s focus on addressing global economic imbalances.
However, fears remain that the Trump administration’s renewed scrutiny of multilateral institutions could lead to staff cuts or a downgrading of programmes focused on net-zero goals and gender equity—areas now in the White House’s firing line.
While Bailey welcomed the US’s continued membership in the IMF and World Bank, he said the current moment required serious reflection on how international financial institutions are structured and the role they play in preventing economic divergence. “Eighty years on from Bretton Woods, the system still works,” he said. “But there are challenges that need addressing to ensure it remains fit for purpose.”
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Bank of England’s Andrew Bailey backs need for global trade reform amid Trump tariff threats

Inheritance tax (IHT) receipts have hit a record high of £8.2 billion in the 2024-25 tax year, as rising asset values and long-frozen thresholds continue to draw more families into the tax net—even before major upcoming changes that will extend liability to pensions and farmland.
New figures from HM Revenue & Customs show a significant increase from £7.5 billion the previous year and more than double the £3.8 billion collected a decade ago. Financial advisers say the surge reflects a growing number of estates becoming liable for IHT due to soaring property prices and stagnant tax-free allowances.
The current £325,000 nil-rate band—above which estates are taxed at 40 per cent—has remained unchanged since 2009, while the additional £175,000 residence nil-rate band, introduced in 2017 for those passing on the family home to children or grandchildren, has also been frozen. These allowances will remain fixed until at least 2030 under current government plans.
With house prices, stock portfolios and savings rising over the years, many estates that would once have fallen below the threshold are now exposed. According to Savills, property now makes up 38 per cent of the average taxpaying estate, with stocks and shares accounting for 29 per cent and cash around 18 per cent.
Although only around 4 per cent of UK deaths currently result in an IHT bill, the tax is expected to become an increasingly significant revenue source. The Office for Budget Responsibility forecasts that receipts could reach £13.9 billion a year by the end of the decade.
Jonathan Halberda, a financial adviser at Wesleyan Financial Services, said the trend is no surprise. “With an increasing number of families being pulled into the scope of inheritance tax, the latest rise in receipts comes as little surprise. Each month we’re seeing the impact of frozen thresholds that no longer reflect current asset values, alongside an increasingly complex system,” he said.
“Many who wouldn’t have faced a tax bill just a few years ago are now being caught out, while others don’t realise their estate is at risk until it’s too late.”
The tax take is expected to rise further following policy reforms announced by the Treasury. From April 2026, relief on agricultural and business property will be capped at £1 million, with assets above this threshold subject to a 20 per cent tax. The move, intended to close perceived loopholes and prevent wealthier individuals from buying farmland to sidestep tax, is expected to raise an additional £520 million annually by 2029-30.
From 2027, pension pots will also fall within the scope of IHT—ending their current exemption. According to Treasury projections, this change could generate £1.46 billion annually, while consultancy Lane Clark and Peacock estimate that over the next two decades it could bring in up to £65.4 billion. By 2047, receipts from IHT on inherited pensions alone could rise to £6.2 billion per year.
The changes have sparked concern across the financial sector and among farming communities. While the government argues the reforms will make the system fairer and help fund public services, farmers have warned the cap on farmland relief may force the sale of family businesses to cover tax bills.
Halberda said including pensions in taxable estates would only add further complexity. “Instead of simplifying the process, bringing pensions under the IHT umbrella in 2027 adds further complexity. It’s a major change that we’re still waiting for more detail on. People need clarity, but in the absence of clear direction many are unsure where to turn.”
With the tax set to impact a growing number of middle-income households, calls are mounting for the government to review IHT policy in light of changing asset values and the increasingly blurred line between ordinary estates and so-called wealth.
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Inheritance tax hits record £8.2bn as frozen thresholds drag more families into net

US Treasury Secretary Scott Bessent has launched a scathing attack on the International Monetary Fund (IMF), accusing the institution of turning a blind eye to China’s export-led economic dominance and neglecting its core responsibilities in favour of climate and social policy work.
In a high-profile speech at the Institute of International Finance in Washington, Bessent criticised the IMF’s latest External Sector Report, which claimed that global imbalances were easing. Describing the report as “Polyanna-ish”, he warned that the IMF had become more concerned with “buzzword-centric marketing” than addressing structural economic threats.
“This outlook is symptomatic of an institution more dedicated to preserving the status quo than answering the hard questions,” Bessent said. “The IMF must be a brutal truthteller and not just to some members.”
The comments mark the Trump administration’s first formal intervention in how it intends to reshape the IMF and World Bank. The White House, Bessent said, would not seek to withdraw from either institution—despite calls from some allies to do so—but instead push for sweeping reforms to refocus the IMF on its original macroeconomic mission.
The Treasury Secretary argued that the fund’s increasing emphasis on climate change, gender equality and social issues is “crowding out” work on financial stability and trade surveillance. “These are not the IMF’s mission,” he declared.
Bessent’s remarks follow weeks of rising tensions between the White House and multilateral institutions, and come amid fears among IMF and World Bank staff of potential cuts to funding, employee benefits, and key programmes—particularly those supporting environmental and diversity goals in developing nations.
The sharpest criticism was reserved for the IMF’s treatment of China. Bessent called it “absurd” that China continues to be classified as a developing economy eligible for aid, despite posting record trade surpluses and pursuing aggressive export-driven growth. “We will not abide the IMF failing to critique the countries that most need it—principally, surplus countries,” he said. “The IMF needs to call out countries like China that have pursued globally distortive policies and opaque currency practices for many decades.”
The Trump administration has accused China of distorting global markets through suppressed domestic demand, overcapacity in manufacturing, and artificial currency management—accusations that have driven recent moves to impose 145 per cent tariffs on Chinese goods in the US.
Bessent’s speech coincided with a wider debate at this week’s IMF and World Bank spring meetings about the future of global trade, and whether the post-war economic order built around multilateralism can still serve modern needs. IMF Managing Director Kristalina Georgieva has attempted to bridge the gap, calling for surplus economies to adjust and urging greater trade cooperation.
Bank of England governor Andrew Bailey, also speaking in Washington this week, appeared to endorse parts of the US analysis, saying China’s export-reliant economic model was “not sustainable forever” and calling for more balanced adjustment in the global economy.
While Bessent affirmed the US would remain within the Bretton Woods institutions, he made clear that Washington expects major changes—and intends to install its own candidates into senior leadership roles to ensure reform takes root. The administration is reportedly preparing nominations for key positions, including that of deputy managing director at the IMF.
The criticism from Bessent reflects broader White House concerns that global economic governance is drifting away from its founding principles, and reinforces Trump’s broader push to reassert American priorities on the world stage.
As the largest single shareholder in the IMF and World Bank, the US holds significant influence over their strategic direction—leverage the Trump administration now appears ready to use.
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Scott Bessent attacks ‘Polyanna-ish’ IMF and demands clampdown on China’s export dominance