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UK Confidence Wanes Amid Concerns Over Labour’s Tax-Raising Budget

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Consumer and business confidence in the UK has declined following Labour’s recent budget, which includes significant tax hikes that have sparked concerns about rising costs, hiring prospects, and the country’s long-term economic growth.

Recent surveys show growing pessimism among British households and the services sector, undermining the government’s goal to boost economic growth to the highest levels in the G7 over the next five years. The British Retail Consortium (BRC) reported that, in the wake of the budget announcement, consumer confidence dropped, with more households expressing concern about the economy than in previous months. This has led to little change in household spending, despite the upcoming holiday season, with many consumers maintaining a cautious approach to their finances.

The BRC’s survey found that households were only marginally more optimistic about their personal financial situations between October and November. The overall sentiment regarding the economy fell by two points, reaching -19, while savings intentions and spending plans remained largely unchanged.

In a separate survey, the Confederation of British Industry (CBI) noted a sharp drop in confidence among businesses in the service sector, which accounts for about three-quarters of the UK economy. This marks the steepest decline in business optimism in two years, reversing a nine-month period of improving sentiment. Service-sector companies are particularly concerned about rising wage costs, which are expected to increase further with the government’s planned hike in employer national insurance contributions from April 2024.

Alpesh Paleja, interim deputy chief economist at the CBI, described the outlook as “not a pretty picture,” citing weaker hiring intentions and growing cost pressures as key concerns. The national insurance increase, which is expected to generate between £16 billion and £20 billion annually for the government, is seen as a major factor contributing to the negative sentiment.

Meanwhile, the Recruitment and Employment Confederation (REC) warned that the national insurance rise could slow the recovery in hiring, which had shown signs of improvement earlier this year. The REC’s latest survey found that hiring confidence surged in the months leading up to October, but the impending tax increase—particularly the rise in contributions for lower earners—could dampen business optimism going forward.

Helen Dickinson, chief executive of the BRC, also highlighted the impact of the tax hikes on the retail sector, estimating that national insurance increases could add £7 billion in costs. She urged the government to address the issue by ensuring the upcoming changes to business rates, set for 2026, provide meaningful relief for retailers.

As the UK grapples with these economic challenges, experts are calling for targeted government support to ensure that businesses can weather the rising costs and that hiring continues to recover.

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Amazon MGM Takes Creative Reins of James Bond Franchise Amid Casting Buzz

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In a landmark shift for the James Bond franchise, Amazon MGM has partnered with long-time producers Michael G. Wilson and Barbara Broccoli to oversee the future of 007. While all three entities retain co-ownership of the Bond intellectual property, Amazon MGM will now lead creative decisions, marking a significant departure from its previously limited role.

The move follows Amazon’s $8.5 billion acquisition of MGM in 2021, which granted it partial ownership but little say in the franchise’s artistic direction. With Daniel Craig’s departure after 2021’s No Time to Die, speculation about the next James Bond has intensified. Jeff Bezos, Amazon’s founder and executive chairman, fueled the debate by asking his followers on social media platform X, “Who’d you pick as the next Bond?” The overwhelming response highlighted British actor Henry Cavill as a fan favorite. Known for roles in Superman, The Witcher, and Mission: Impossible – Fallout, Cavill previously auditioned for the role in 2006’s Casino Royale but lost to Daniel Craig. Director Martin Campbell praised Cavill’s audition but deemed him too young at the time. Now in his early forties, Cavill’s age could be a factor if long-term commitments are considered.

Daniel Craig acknowledged Wilson and Broccoli’s contributions, telling Variety, “My respect, admiration, and love for Barbara and Michael remain constant and undiminished.” With Wilson stepping back and Broccoli expected to reduce her involvement, Amazon MGM gains greater creative control, raising questions about the franchise’s future direction.

Fan speculation continues to swirl around Cavill, alongside other contenders like Taron Egerton, Tom Hardy, and Idris Elba. While Amazon MGM has yet to announce a timeline or reveal casting decisions, industry watchers anticipate a new era that may extend beyond traditional films, potentially including spin-offs, series, and streaming exclusives. As the studio reshapes Bond’s future, audiences worldwide eagerly await the next chapter in the iconic spy saga.

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Global Hiring Slump Marks Longest Downturn in Decades, Says Hays CEO

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The global job market is experiencing its longest downturn in over 20 years, according to Dirk Hahn, CEO of Hays, Britain’s largest listed recruitment firm. Hahn attributes the slump to ongoing macroeconomic uncertainty, which is deterring both employers and job seekers from making moves.

Hays, which employs nearly 7,000 consultants worldwide, reported weaker demand for temporary workers in early 2025, while demand for permanent roles—particularly in Europe—remains sluggish following a pre-Christmas dip. Countries such as France, the UK, Ireland, and Germany, Hays’s largest market, are feeling the pressure most acutely.

In the six months leading up to December, Hays reported a 15% drop in group net fees, falling to £496 million from £583.3 million the previous year. Pre-tax profits fell sharply by 67% to £9.1 million, compared to £27.6 million during the same period the prior year. Hays’s share price, already down 25% over the past year, dipped a further 1.8% on Thursday, closing at 71¾p and placing the company’s market value just below £1.2 billion. Despite declining profits, the company will maintain its interim dividend at 0.95p per share.

While the broader UK labor market has shown resilience with limited mass layoffs, businesses remain cautious about expanding their workforce. “Most companies have enough work to retain their current staff, but they’re not looking to increase headcount,” said James Hilton, Hays’s chief financial officer. “Many employees who received pay increases in recent years are not seeking new roles, creating a stalemate. However, over time, people will seek promotions or fresh challenges.”

Recruiters had anticipated a market recovery earlier this year, but Hahn now warns that the rebound may not materialize until 2026. In the meantime, Hays is focusing on its technology recruitment division—its most profitable segment—as it navigates the prolonged global hiring slowdown.

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UK Government Reports Lower-Than-Expected Budget Surplus in January

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The UK government reported a budget surplus of £15.4 billion in January, falling short of economists’ forecasts of £21 billion and the £19 billion predicted by the Office for Budget Responsibility (OBR). Despite January typically seeing a boost from self-assessment tax payments, the lower-than-expected figure has increased total borrowing for the financial year to £118.2 billion—over £11 billion more than the previous year.

The government’s debt-to-GDP ratio now stands at 95.3 per cent, a level last observed in the 1960s. With the OBR set to release updated forecasts on March 26, there are concerns that the government may struggle to meet its goal of reducing the debt ratio by 2029. This could lead to potential spending cuts or tax hikes in the autumn budget.

Reduced debt-servicing costs helped boost January’s surplus, dropping from £9 billion in December to £6.5 billion. However, this was partially offset by a £6 billion one-off expense related to the government’s repurchase of military housing from private firm Annington.

Darren Jones, chief secretary to the Treasury, emphasized the government’s commitment to “economic stability and meeting our non-negotiable fiscal rules.” He also noted that a comprehensive spending review—the first of its kind in 17 years—is underway to ensure that public funds are used efficiently and aligned with national priorities.

 

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