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The Bank of England has warned that the global race to build artificial intelligence infrastructure is increasingly being fuelled by debt, creating a growing risk to financial stability if the current AI boom turns into a market correction.
Governor Andrew Bailey said valuations of AI-driven technology companies were now approaching levels last seen during the dotcom bubble in the US, and levels not seen since the financial crisis in the UK and EU. The Bank’s latest Financial Stability Report goes further, highlighting a new risk: the deepening reliance on credit markets to finance an estimated $5 trillion of AI infrastructure over the next five years.
While the tech giants dominating the sector, the so-called “hyperscalers”, will fund part of this investment through their own cash flow, the Bank estimates around half will be financed through external borrowing, much of it debt. That, it warns, is a vulnerability hiding in plain sight.
“The AI sector is a particular hotspot,” Bailey said. “The role of debt financing is increasing quickly as firms seek large-scale infrastructure investment.”
If sentiment towards AI shifts and valuations fall sharply, the Bank cautions that the sector’s growing ties with the credit markets could amplify losses and trigger wider instability. A sell-off in America’s AI-heavy stock market, where AI companies now account for 44% of the S&P 500’s market value and have driven 67% of its gains this year, would inevitably spill over into the UK despite the FTSE 100’s relatively limited exposure.
Nvidia, the chipmaker at the centre of the AI boom, recently became the first company to hit a $5 trillion valuation, though its shares have since slipped back.
Even so, Bailey insisted the Bank’s planned loosening of capital rules for UK lenders remains the right step, citing strong results from its latest stress tests and the increased resilience of the banking sector since 2008.
But the message for business leaders and investors is clear: the AI gold rush is increasingly being underwritten by borrowed money. If high-growth earnings forecasts do not materialise, the correction could be sharp — and this time, the shockwaves could travel through the credit markets as well as the stock exchanges.
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AI investment boom built on debt poses growing risk to financial stability, Bank of England warns

Labour has suspended one of its own MPs after he broke ranks to vote against the party’s contentious inheritance tax changes for farmers, deepening internal divisions over the reforms and fuelling anger in rural communities.
Markus Campbell-Savours, the MP for Penrith and Solway, was the only Labour member to oppose the measure in the Commons on Tuesday night. The proposal – part of the Budget resolutions – passed comfortably by 327 votes to 182, but more than 80 Labour MPs abstained, reflecting widespread discomfort within the party.
Campbell-Savours, who represents one of England’s most rural constituencies, said he could not support changes to agricultural property relief (APR) that he believes will devastate family farms. The reforms introduce a 20 per cent tax on agricultural land and businesses worth more than £1 million, despite earlier assurances from Labour figures that APR would be left untouched.
Speaking during the Budget debate, he warned that many elderly farmers still making arrangements to transfer assets now faced “devastating” consequences.
“I was one of those Labour candidates who reassured farmers that APR would not be touched,” he told MPs. “I want to be able to walk around my community knowing I did all I could for them. I cannot break my word.”
On Wednesday, the Chief Whip Jonathan Reynolds informed him that he had lost the Labour whip, effectively expelling him from the parliamentary party.
Labour sources confirmed the decision, making Campbell-Savours the latest MP to be sidelined for refusing to back the government’s economic programme.
The reforms have sparked furious criticism from farming organisations and rural MPs across the political spectrum. Opponents argue that the majority of farms affected are small, family-run operations – not “wealthy land barons” – and that the reforms do little to curb tax avoidance by celebrities and billionaires buying farmland to shelter wealth.
Senior Conservative MP Victoria Atkins, the shadow environment secretary, accused Labour of waging an “assault on farmers and family businesses”.
“Suspending their only MP who dared to vote against their vindictive Family Farm and Business Taxes proves how out of touch they are,” she said. “Only the Conservatives will stand up for rural and agricultural communities.”
In the Budget, the Chancellor sought to soften the blow by allowing unused portions of the £1 million APR and business property relief allowance to be transferred between spouses and civil partners. But the concession has done little to calm farming groups, many of whom had believed the previous shadow Defra team’s public commitment that APR would remain intact.
The reforms were first proposed in last year’s Budget, prompting months of lobbying from the agricultural sector. Despite this, Labour pressed ahead, insisting the changes target wealthy estates while protecting the majority of working farms.
Campbell-Savours’ suspension now places Labour under fresh scrutiny over its relationship with rural voters – a constituency the party has publicly vowed to rebuild trust with since winning the General Election.
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Labour suspends MP Markus Campbell-Savours for defying party over inheritance tax raid on farmers

An aerospace engineer who challenged her employer’s transgender toilet policy has lost her discrimination case, after an employment tribunal ruled that Leonardo UK’s approach was lawful and proportionate.
Maria Kelly, a people and capability lead at the defence giant, claimed she experienced harassment, direct sex discrimination and indirect sex discrimination after the company allowed transgender women to use female toilets. Her grievance centred on an incident in March 2023, when she said she encountered a transgender colleague in a women’s bathroom. She told the tribunal she subsequently began using a “secret” toilet due to discomfort and concerns over privacy.
The claims were dismissed in full by employment judge Michelle Sutherland in a written judgment published on Wednesday following a hearing in Edinburgh in October.
Leonardo UK employs around 9,500 people. Judge Sutherland noted that Kelly was the only employee to raise concerns about the policy, despite multiple channels being available to do so.
She found that Kelly had not been put at a legal disadvantage, writing: “Any fear or privacy impact could be addressed by affected female staff making recourse to the single-occupancy facilities.”
The tribunal also rejected arguments that safety risks increased, ruling that the possibility of 0.5% of male staff using the women’s toilets “would not have changed the overall risk profile”.
The judgment concluded that Leonardo’s toilet access policy was “a proportionate means of achieving a legitimate aim”.
The ruling comes in the wake of the UK Supreme Court’s decision in April, which held that “woman” and “sex” in the Equality Act 2010 refer to biological sex — a landmark judgment invoked heavily by Kelly’s legal team.
Kelly said the tribunal “fundamentally misunderstands both the law and my case”, adding she intends to appeal urgently to the Employment Appeal Tribunal.
Sex Matters chief executive Maya Forstater claimed the judgment was “incompatible” with the Supreme Court’s ruling in For Women Scotland, criticising what she called the tribunal’s “gender identity–based” interpretation.
Leonardo UK acknowledged the tribunal outcome, saying in a statement: “Our focus now is to ensure workplace conduct remains respectful and our facilities’ policies continue to meet legal standards. We will review forthcoming Equality and Human Rights Commission guidance when published.”
Employment lawyer Hina Belitz of Excello Law said the ruling illustrates the “complicated picture” facing courts and employers following the Supreme Court’s clarification of biological sex in equality law.
“This is particularly the case when determining whether individuals have rights to protected single-sex spaces,” she said.
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Engineer loses discrimination case against Leonardo UK over transgender toilet access policy

Jaguar Land Rover has parted ways with Gerry McGovern, the veteran design chief responsible for the company’s highly polarising pink-themed rebrand — a marketing campaign criticised for featuring high-fashion models, avant-garde slogans and not a single Jaguar car.
Industry publication Autocar reported that McGovern, 69, was asked to leave the business on Monday and was “escorted out of the office,” bringing an abrupt end to his 21-year tenure as one of the most influential figures at the carmaker. JLR declined to comment on the departure.
McGovern’s exit comes just weeks after PB Balaji, previously chief financial officer at parent company Tata Motors, took over as JLR’s new chief executive. The leadership reshuffle follows a turbulent year marked by falling demand for premium cars in China, semiconductor supply concerns and a major cyberattack that halted production for five weeks.
Jaguar’s December 2024 relaunch — revealed at Miami Art Week — was widely ridiculed for ditching the brand’s famous “growler” emblem in favour of a high-fashion aesthetic. The glossy campaign featured models with angular haircuts walking through a pink, sci-fi landscape, accompanied by slogans such as “delete ordinary,” “copy nothing,” and “live vivid.”
There were no cars in the campaign video, a decision the company defended at the time as “bold and imaginative.”
The controversy deepened when Jaguar unveiled a concept model in neon “Barbie pink,” prompting comparisons to Lady Penelope’s car from Thunderbirds. Critics on social media labelled the campaign “woke” and out of touch.

Former US President Donald Trump accused JLR of being in “absolute turmoil,” branding the rebrand “stupid.” Tesla chief executive Elon Musk mocked the campaign, asking: “Do you sell cars?”
Despite the uproar, McGovern remains widely respected for reshaping some of JLR’s most iconic models. He led the reinvention of the Defender, elevated Range Rover as a luxury sub-brand and oversaw Jaguar’s transition towards an all-electric lineup, including the “neo-brutalist” Type 00 concept.
Raised in Coventry, McGovern studied at the Royal College of Art before embarking on a career that included roles at Chrysler, Peugeot, Austin Rover and Ford’s Lincoln division. He joined Land Rover as director of advanced design in 2004 and later became JLR’s chief creative officer, also joining the company board.
McGovern’s departure comes as JLR battles production volatility and macroeconomic strain. Dutch semiconductor firm Nexperia has warned it can no longer guarantee deliveries due to political tensions with China, while October’s phased restart of production followed a cyber incident that forced Tata Motors to take a $228.5 million charge.
The pink rebrand had come to symbolise, for some critics, a period of misjudged corporate experimentation — a trend analysts say is now reversing, aided by a shareholder push for more commercially grounded marketing. Retailers such as American Eagle have recently enjoyed strong stock performance after returning to more mainstream, celebrity-driven campaigns.
With Jaguar’s first new electric model due next summer, McGovern’s departure raises fresh questions about how much of his creative vision will survive under JLR’s new leadership.
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Jaguar ‘dumps designer’ behind pink rebrand after backlash over ‘car-free’ campaign

The UK’s private sector spent much of the autumn effectively “in limbo”, delaying investment and hiring decisions amid weeks of swirling Budget speculation that business leaders say left them bruised and uncertain about the government’s intentions.
The latest monthly survey from the Confederation of British Industry (CBI) reveals that firms sharply downgraded expectations for activity in the months ahead. The composite measure for anticipated private-sector activity fell to –27 in November, down from –20 in each of the previous two months, pointing to a widespread pullback in decision-making as rumours of tax rises intensified.
That cautious mood followed a significant drop in output, with the CBI reporting that private-sector activity fell at its fastest pace since August 2020. Every major sub-sector registered a decline, suggesting the impact of pre-Budget nerves was broad and deep.
CBI deputy chief economist Alpesh Paleja said the deterioration in confidence was closely linked to weeks of speculation about the Chancellor’s plans. “Growth expectations weakened in November, some of which may be down to jitters ahead of last week’s Budget,” he said. “Businesses tell us that much of the month passed in limbo, with big discretionary spending and investment on hold.”
Paleja added that while last week’s Budget introduced further costs for employers, including new National Insurance requirements for salary sacrifice pension contributions, the government’s creation of £21.7 billion of fiscal headroom could offer some stability going forward.
A separate poll suggests business sentiment remained fragile even after the Budget. Research by WPI Strategy found more than half of business leaders now expect to scale back hiring plans because of the measures announced, while a significant share believe their organisation will suffer under the new fiscal environment. Many respondents cited concerns about rising payroll costs and the cumulative burden of recent tax changes.
The period leading up to the Budget has itself become a focal point of criticism, with business groups pointing to the Treasury’s heavy reliance on anonymous briefings that repeatedly suggested a £30 billion shortfall in public finances. Those warnings fuelled fears of sweeping tax increases.  Fears later undermined by the Office for Budget Responsibility (OBR), whose chair, Richard Hughes, confirmed that a productivity downgrade had not wiped out the Chancellor’s fiscal headroom after forecasts were submitted on 20 October.
Both Rachel Reeves and Keir Starmer have denied misleading the public, despite increasing scrutiny of the government’s early-November rhetoric. The row has raised questions about how the Treasury manages expectations in the run-up to fiscal events and whether pre-Budget communication has become destabilising in its own right.
The Bank of England has also noted the consequences of the prolonged uncertainty. It said tax rumours contributed to slower growth in the third quarter, while new figures show a marked cooling in the housing market. Net mortgage borrowing dropped to £4.3 billion in October, and mortgage approvals fell to 65,000, the lowest level since February 2025. Analysts say the decline reflects a pause in activity as households waited to see whether income taxes or thresholds would change.
According to Anthony Codling of RBC Capital Markets, the fall in approvals “confirms that the long period of Budget speculation negatively impacted housing market activity,” contributing to the broader sense of economic hesitation.
As business leaders absorb the Budget’s measures, many argue the government must now prioritise restoring stability and rebuilding confidence after a turbulent pre-Budget period that slowed investment, unsettled bosses and left the private sector on edge.
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Businesses left ‘in limbo’ during Budget speculation as confidence slumps

Unilever is selling the healthy snacks brand Graze to Candy Kittens, the vegan confectionery company co-founded by Made in Chelsea star Jamie Laing, in a deal understood to be worth £36 million.
The transaction will see the FTSE 100 consumer goods giant hand over the struggling brand to Katjes International, which holds a majority stake in Candy Kittens. The sale is part of a wider restructuring at Unilever as chief executive Fernando Fernández seeks to refocus the group on higher-performing beauty and personal care divisions and offload weaker assets.
Graze, founded in 2005 as one of the UK’s earliest snack-box subscription services, gained prominence for its portion-controlled punnets of nuts, seeds and cereal bars sold in supermarkets nationwide. Unilever acquired the business from private equity firm Carlyle in 2019, in a deal reported at the time to be worth up to £150 million, amid growing enthusiasm for direct-to-consumer brands.
However, the momentum faded. Graze has not turned a profit under Unilever’s ownership and recorded losses of £8.7 million last year as revenue fell nearly 10 per cent to £35.6 million. Direct-to-consumer sales — once the brand’s core growth engine — have slumped in a more cautious post-pandemic consumer environment.
The sale price represents a steep discount on the 2019 valuation, underlining the challenges facing Unilever’s food portfolio.
It comes as the company reportedly considers disposing of further heritage British brands — including Marmite, Colman’s and Bovril — and prepares to spin off its entire ice-cream division, home to Magnum and Ben & Jerry’s, in an IPO expected later this month.
Unilever said Graze would benefit from more specialised stewardship outside the group.
Georgina Bradford, its general food manager for the UK and Ireland, said the brand was “well positioned for its next phase of growth”, adding that a dedicated owner focused on healthy snacking would be better placed to unlock its potential.
For Laing and Candy Kittens co-founder Ed Williams, the acquisition fulfils a long-held ambition. The pair have previously described Graze as an inspiration for their own business, which launched in 2012 and has grown into one of the UK’s fastest-growing confectionery brands.
“Bringing Graze into the Candy Kittens Group marks a full-circle moment,” the company said.
Laing added: “I’ve always loved Graze — they changed the way the UK thinks about healthier snacking, and I think we can take that even further. I’m excited about this transaction and grateful for the opportunity to continue building the Graze brand.”
Candy Kittens, known for its vegan sweets and colourful branding, first opened a store on Chelsea’s King’s Road in 2014, leveraging Laing’s TV profile to reach younger, health-conscious consumers. The takeover of Graze marks its biggest move to date and will significantly expand its footprint in the £3bn healthy snacking market.
The sale is expected to complete in the first half of 2026, subject to approvals.
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Unilever sells Graze to Candy Kittens in £36m deal led by Jamie Laing

Javvy Coffee launched in 2020 with a clear goal: to make energy simpler, cleaner, and easier to use. In a market full of sugar-loaded drinks, stimulant-heavy powders, and complicated routines, they saw a better way.
The company introduced a straightforward product—protein coffee with just enough caffeine and no added sugar—that could be used anywhere, anytime.
From the start, Javvy positioned itself not as a trendy wellness brand, but as a routine builder. The team listened closely to everyday consumers, from cold plunge enthusiasts and personal trainers to students, teachers, and shift workers. What they learned helped shape every decision—formulation, format, and even how the brand grew.
Javvy Coffee offers products that fit seamlessly into busy lives. The powder format and shelf-stable design make it ideal for people who don’t have time to meal prep or hit the drive-thru. It’s become a staple in car cup holders, gym bags, office drawers, and even post-workout routines.
The company continues to grow by focusing on what works. Not by chasing viral trends, but by staying close to the people using their product every day. In a crowded market, Javvy has built its leadership not by shouting, but by showing up—quietly reshaping how we think about energy and routine.
You can learn more about Javvy Coffee and their approach to functional energy at their website.
Q&A with Javvy Coffee on Energy, Routines, and Staying Focused
How did the idea for Javvy Coffee first come about?
It started with noticing the way people were using caffeine. So many were either skipping breakfast or pairing sugary coffee with nothing else. That led to crashes, fatigue, and frustration. We thought—what if there was something simpler? Something with caffeine and fuel that actually fit into a busy routine?
What was the first version of the product like?
The original Coffee Concentrate came first. It was clean and flexible, but we kept hearing people say they wanted something ready-to-go. So we worked on a shelf-stable protein coffee with 80mg of caffeine and 10g of protein. It’s light, it travels well, and it’s built for real routines—not ideal ones.
How important was customer feedback in shaping your direction?
It’s everything. One runner in Denver told us they used to drink a big shake before runs but felt too heavy. Our product let them get out the door faster without the bloat. A cold plunge user in Austin said they drank it right after getting out of the tub to warm up without the espresso shakes. These weren’t edge cases—they became the map.
How do you define success now?
It’s when we see our product show up in someone’s real routine. In their gym bag, in the car, or tucked into a backpack between classes. If someone reaches for it without having to think, we’ve done our job.
What’s changed about how people approach caffeine?
People are more intentional. They want balance, not just a boost. Many are moving away from high-stim pre-workouts and sugary drinks. They want energy that supports focus, movement, and recovery—not something that spikes and crashes.
How do you see Javvy Coffee fitting into that shift?
We’re not asking people to overhaul their lives. We’re just helping them swap one better decision into the routine they already have. We like to say: we’re not loud, but we’re consistent.
What advice would you give to other founders in the functional beverage space?
Don’t chase trends. Build around real habits. Watch how people actually use your product—not how they say they want to use it. There’s gold in the quiet details.
What’s one routine you personally stick to that keeps you grounded?
Cold plunge, Javvy, and 30 minutes of deep work. That sets the tone for everything else. It’s not fancy, but it’s effective.
What’s next for the brand?
We’re still focused on learning and listening. We don’t want to grow just for the sake of it. Every decision has to come from how people are using us, and what helps them move better through their day.
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What Powers Progress: A Conversation with Javvy Coffee

Entrepreneur and Dragons’ Den star Steven Bartlett is preparing to launch a new tech news website later this month, as he expands his fast-growing media and business empire.
The publication, reportedly called Founded, will cover the technology and start-up landscape across the UK and US, according to City AM. Bartlett is understood to be hiring around 10 journalists alongside an editor-in-chief as he builds out a full newsroom.
A holding page on Founded.com has replaced the earlier preview content, but cached versions hint at the publication’s mission: “FOUNDED is a culturally fluent business publisher built for the founders of today… trusted by entrepreneurs, operators, and builders around the world.”
The move comes shortly after Bartlett unveiled a new parent company, Steven.com, and secured an eight-figure investment valuing the business at about £320 million. The firm, incorporated in the US, now houses Bartlett’s creator-led ventures including FlightStory, FlightCast, and FlightFund, with Bartlett retaining more than 90% ownership.
Bartlett has become one of the UK’s most influential business personalities, hosting The Diary of a CEO podcast since 2017 and investing in more than 60 companies, among them matcha drink Perfect Ted and hydration brand Cadence.
Speaking during a recent visit to FlightStory’s London headquarters, he said he saw his current ventures as merely the starting point. “I’m less than 1% of the way on my journey,” he said. “If we do a good job in laying good foundations, I think the business will exist long after I’m gone.”
Drawing a comparison to Disney’s 102-year legacy, Bartlett said he aims to build a generational media company that helps define the future of the creator economy.
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Steven Bartlett to launch new tech news website as media ambitions grow

Prime Minister Keir Starmer has denied accusations that Chancellor Rachel Reeves misled the cabinet or the public over the state of the public finances ahead of last week’s Budget, after a fresh row erupted between the Treasury and the Office for Budget Responsibility (OBR).
Speaking at a nursery in London, Starmer defended Reeves’ tax rises and her decision to scrap the two-child benefit cap, despite weeks of speculation over possible income tax hikes. He insisted that revenue-raising measures were unavoidable and dismissed allegations that the government exaggerated the scale of its fiscal challenges.
“There was no misleading,” he said. “It was inevitable we would always have to raise revenue. I was clear we needed more headroom.”
His comments follow criticism of the Treasury’s pre-Budget handling after Reeves repeatedly signalled that income tax rates might be raised — a position later abandoned. Reports suggested the Treasury believed there was a £30bn shortfall in fiscal headroom, a figure now disputed by the OBR.
In a letter to the Treasury Select Committee, OBR chair Richard Hughes confirmed that there was no significant deterioration in the public finances after 20 October, aside from the government’s decision to ditch planned welfare cuts. That assessment contradicts claims circulating in early November that the UK faced a much deeper fiscal hole.
Further questions have arisen about the timing of Reeves’ statements. On 5 November, she implied Labour was prepared to break its manifesto pledge on income tax. By 13 November, media briefings claimed tax rises had been shelved due to improved forecasts. The OBR has since confirmed no such improvement occurred in that period.
The BBC’s political editor, Chris Mason, said on Monday that the Treasury had “misled the public” by allowing speculation to build on inaccurate or incomplete information.
Starmer rejected the accusation, pointing instead to the OBR’s productivity review, which downgraded trend growth forecasts and forced the government to raise additional revenue. He said he was “bemused” that the OBR had not revised these figures before the General Election.
“I’m not angry at the productivity review,” he said. “It’s a good thing to do them from time to time.”
He added that the OBR remained “vital and integral” to maintaining financial stability.
Hughes is due to appear before MPs on Tuesday in what is expected to be a tense hearing between the OBR and the Treasury.
Starmer’s remarks came during a speech outlining the government’s next phase of its economic growth agenda. He identified three priorities — deregulation, welfare reform, and boosting trade ties — as central to raising living standards.
He also appeared to confirm that the government will back all recommendations from economist John Fingleton’s review of the nuclear sector. The review found that a planning system dominated by “process over outcomes” had made the UK the costliest place in the world to build nuclear power plants.
“I am accepting the Fingleton recommendations,” Starmer said, with business secretary Peter Kyle instructed to extend reforms across other sectors.
“Today represents the biggest, most radical change to nuclear regulation in our country’s history,” said Lawrence Newport of Looking for Growth. “These reforms will transform our energy sector, allowing us to make more energy here and reduce bills for households and businesses.”
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Starmer rejects claims government misled public as tensions with OBR escalate