General

Chancellor Jeremy Hunt’s Spring Budget sought to balance fiscal prudence amid a persistent inflation battle with targeted spending to unblock labour market inactivity and promote investment after the largest corporation tax hike in almost half a century. Short-term boosts to business investment do not obscure the UK economy’s fragility, which has been heightened by recent global financial market instability risks.

Federal Reserve Chair Jerome Powell warned further hot inflation prints and employment data could prompt a reversion to bigger interest rate hikes to tame persistent price increases. The hawkish tilt signals the limited impact of the Fed’s monetary tightening cycle to date and raises the prospect of a future US recession.

The UK government struck a breakthrough deal with the European Commission on new post-Brexit trading arrangements for Northern Ireland (NI), repairing trade flows between Great Britain (GB), NI and the EU, the UK’s largest trading partner.

Insolvencies are expected to increase in the UK’s construction industry this year as higher
interest rates, inflation and an anticipated domestic recession dampen demand for housing
and new commercial projects.

Payroll umbrella companies that provide tens of thousands of temporary workers to the public and private sectors are defrauding the HMRC of hundreds of millions of pounds through evasion of income tax, National Insurance (NI) contributions and VAT.

The embattled global airline industry has been at the forefront of renewed economic optimism in the early weeks of the new year.