UK Industry Fast Facts

IBISWorld presents a collection of fast facts for the different sectors of the UK economy.

Agriculture, Forestry & Fishing

• In the Autumn Budget 2024, the government introduced a £1 million limit on the inheritance tax relief for farms from April 2026, after that there would be a 50% relief, at an effective rate of 20%. The National Farmers’ Union (NFU) of England and Wales has labelled the Budget as “a blow to British farmers and could lead to food price rises.” Farmers warn that these measures might force them to sell their farms, while there are also worries that the tax could discourage investment in green farming technology.  

• Following the recent budget announcements, the ADHB warned that from April 2026, the average farm, valued at £2.2 million, would face an inheritance tax of £240,000. In response, two protest rallies have already been held in central London in November and December 2024, organised by the NFU, Save British Farming and Kent Fairness for Farmers. On 3 February 2025, a tractor rally featuring a slow-moving convoy of over 100 tractors took place on the A14, demonstrating solidarity with Suffolk farmers.

• Major supermarkets Tesco and Lidl have voiced their support for UK farmers. Tesco's Chief Commercial Officer emphasised the need to pause policy implementation, warning that "the UK’s future food security is at stake". Meanwhile, Lidl expressed concerns that changes to the inheritance tax could hinder the development of a resilient, productive and sustainable British food system.

• Labour also announced an accelerated reduction in the Rural Payments Agency’s delinked payments, which support production on many farms. The government plans to cut base payments by at least 76% in 2025, which will harm farmers' livelihoods and negatively impact output.

• Defra reports that farming contributes about 12% of the UK's total greenhouse gas emissions. The NFU warns that achieving net-zero farming by 2040 is unlikely without increased investment in climate-friendly measures. The current government has kept the 2025-26 climate-friendly farming budget at £2.4 billion, unchanged from the previous level.

• The UK government launched a new Land Use Framework consultation, requiring the conversion of 760,000 hectares (about 9% of England's farmland) to low-carbon uses like woodland and heath by 2050 to meet climate targets. The NFU warns this could increase dependence on imported foods. However, the government claims that advancements in technology and sustainable farming will offset any impact on food production by boosting crop yields.

• A recent report from Scottish Parliament Members highlights urgent concerns about the salmon farming industry's long-term sustainability in Scotland. The Committee calls for swift action, citing slow progress on environmental improvements and unaddressed recommendations from 2018.

Mining

• The Office for National Statistics reports that the mining and quarrying sector output declined by 1.5% in November 2024, continuing its longer-term downward trend. The fall was mainly driven by a 1.8% contraction in the extraction of crude petroleum and natural gas.

• World Bank Commodities Price Data released in January 2025 shows that the annual average prices for coal and crude oil fell in the period January to December 2024 compared with the same period in 2023. Metals and minerals annual average prices have been mixed, with aluminium, copper, tin and zinc prices climbing, while iron ore, lead and nickel prices falling. Within precious metals, gold and silver recorded a hike in prices, while platinum dipped slightly over the year.

• A report by thinktank Common Wealth states that oil and gas in the North Sea must be brought under greater public control “to avoid a cliff-edge collapse of the industry and secure a sustainable future for workers and communities” as reported by The Guardian.

• Following a case by environmental group campaigners, including Greenpeace, a court has ruled that the approval for the Rosebank and Jackdaw oil and gas fields was unlawful and the owners, including Shell and Equinor, must seek fresh approval to extract oil and gas.

• According to BDO’s Annual Mining Report 2025, demand for critical minerals from clean energy technologies is forecast to triple by 2030 and quadruple by 2040.

• The director of the UK Critical Minerals Intelligence Centre, Gavin Mudd, has said that new mines and stockpiling are needed to avoid supply shortages of critical minerals.

• The government will sign a critical minerals partnership with Saudi Arabia to attract investment into the UK and strengthen the supply chains of minerals like copper, lithium and nickel, which are crucial in various industries like electric cars, smartphones and data centres.

• The National Wealth Fund has announced a £28.6 million investment in the reopening of the South Crofty tin mine in Cornwall. BBC reports the scheme is expected to create over 300 jobs.

• The Financial Times reports that the total cost of the Sizewell C nuclear power station is estimated to reach £40 billion, double the £20 billion projected in 2020 by developer EDF and the UK government.

Manufacturing

• In January 2025, the S&P Global UK manufacturing PMI edged up to 48.3 from December’s 11-month low of 47. However, the manufacturing sector continued to contract for the third consecutive month. New orders declined, reflecting sluggish demand from both domestic and overseas markets amid low investor sentiment. Employment levels remained uncertain as job losses accelerated at the fastest rate in nearly a year. Meanwhile, input and output prices surged, with purchase price inflation hitting a two-year high due to ongoing supply chain disruptions and regulatory challenges.

• AstraZeneca pulled the plug on its £450 million investment to expand a vaccine manufacturing plant in Merseyside on 31 January 2025, citing insufficient government support. This move came just two days after Chancellor Rachel Reeves outlined Labour's plan to accelerate economic growth.

• Car manufacturers must meet a government mandate requiring 28% of sales to be electric vehicles (EVs) by the end of 2025, with a £15,000 fine per non-compliant car. In 2024, EV sales increased to 19.6% (381,970 cars), up from 16.5% in 2023, but fell short of the 22% target for that year. No fines were imposed. DriveElectric estimates that UK EV sales will reach 440,000 in 2025, still below the target, sparking calls to relax the mandate.

• Overall car production in 2024 plummeted to its lowest level since 1954, with only 780,000 cars manufactured, as reported by the Society of Motor Manufacturers and Traders. This sharp decline was driven by the transition to electric vehicle production, causing factory slowdowns, along with weak global demand that stifled sales.

• On 16 January 2025, a £50 million investment deal was secured between the car manufacturers Japan Automatic Transmission Company (JATCO), Nissan and the UK government to build a new manufacturing site in Sunderland, which is set to create hundreds of jobs in the North East.

• At the end of January 2025, UK car parts company Dowlais agreed to a £1.2 billion acquisition by American Axle & Manufacturing, driven by both companies seeking to expand and adapt to the electric vehicle revolution.

• UK manufacturers are urging the government to implement an effective industrial strategy in response to rising labour costs from Chancellor Rachel Reeves' tax hikes in the Autumn Budget. According to a Financial Times survey, 90% of senior manufacturing executives reported that employment costs would be their largest expense in 2025-26.

• According to the ONS, monthly production output was estimated to have dropped by 0.4% in November 2024, following a decrease of 0.6% in October. This marks the lowest output level since May 2020. Seven out of 13 subsectors contributed to this decline, with other manufacturing and repair, basic pharmaceutical products and transport equipment making the largest negative impact.

Utilities

• From 1 November 2024, the energy profit levy will rise from 35% to 38% – bringing the headline tax rate to 78% – to ensure oil and gas companies contribute more to make the UK a clean energy superpower. The levy will apply until 31 March 2030.
• Starting January 2025, the energy price cap will climb by 1.2%, reaching £1,738 annually for a typical household, as announced by Ofgem. This hike intensifies the financial strain on households. Analysts from the energy consultancy, Cornwall Insight, forecast an additional rise of nearly 3% in April 2025.
• In 2025, household water bills in England and Wales are set to surge by an average of 26% to £603, the largest annual increase since privatisation 36 years ago. This hike surpasses the £86 rise anticipated by the regulator Ofwat in December 2024. Notably, Southern Water customers will experience the steepest increase among the 11 water companies, with bills expected to climb by 47%, as reported by Water UK.
• According to Cornwall Insights, the UK government is set to miss its targets for developing new solar and wind power by a total of 32 gigawatts. Market reforms and investment barriers are creating uncertainty, potentially stalling the expansion of renewable energy capacity.
• EDF Energy announced an extension for four ageing UK nuclear power stations to enhance energy security. Hartlepool and Heysham 1, originally set to close in March 2026, will now operate until March 2027, while Heysham 2 and Torness, planned for closure in 2028, will remain open until 2030. These extensions aim to compensate for delays in the Hinkley Point C power plant, now expected to be operational in 2029, at the earliest.
• Thames Water is under fire as it seeks High Court approval in February 2025 for a £3 billion emergency loan to manage debt and avoid renationalisation, aiming to secure funds until October 2025. With a 9.75% interest rate and extra fees, critics warn this ‘liquidity extension’ could hike customer bills by £250 annually.
• Octopus Energy has surpassed British Gas as the UK's largest residential energy supplier by meters on supply, managing 12.9 million domestic electricity and gas accounts and capturing a 24% market share, according to the Financial Times.

Construction

• The latest S&P Global release reveals that the UK Construction PMI dropped to 53.3 in December 2024, down from 55.2 in November, indicating a slowdown in growth. The commercial sector saw the fastest growth, followed by civil engineering. Construction in the residential sector saw a slump in output, amid high borrowing costs and weak consumer confidence. Despite ongoing supply chain challenges and rising costs, optimism for 2025 has improved.
• The updated National Planning Policy Framework (NPPF) sets a clear target of building 370,000 homes annually and reinstates mandatory goals for local authorities. The Green Belt has also been revised to include a ‘grey belt’, encouraging development on low-grade greenbelt land. However, BBC’s housing tracker reports a 10% decline in new homes in England during the first six months of Labour's parliament, with approximately 107,000 new homes built since July's election.
• Housing associations have been forced to cut their new-build plans due to gaps in the Building Safety Fund (BSF) coverage, which excludes social tenants. This has resulted in a setback for social housing targets, particularly in London.
• On 20 January 2025, the government announced that the New Hospital Programme’s plan to fit out 40 hospitals in England would be delayed by at least a decade. Health Secretary Wes Streeting stated that construction would occur in four phases, securing a "firm footing with sustainable funding" for successful delivery.
• With rising building costs and high mortgage rates impacting construction output, the construction sector leads the latest UK insolvencies list, according to the Insolvency Service.
• Data from the Department for Business and Trade showed that material price inflation stayed at the same level in November 2024 compared to the same month in 2023. Despite this, material prices for New Housing registered a 1.3% increase, Repair and Maintenance edged up by 0.7% and Other New Work decreased by 1.2% in the 12 months to November 2024. Precast concrete, including blocks, bricks, tiles and flagstones, saw the largest annual increase at 6.3%.

Wholesale Trade

• According to the Office for National Statistics, output in the wholesale and retail trade; repair of motor vehicles and motorcycles grew by 0.5% in November 2024, driven by a 1% climb in output in wholesale trade, except of motor vehicles and motorcycles. In the three months to November 2024, wholesale and retail trade; repair of motor vehicles and motorcycle output grew by 1.7%, making it the largest positive contributor to consumer-facing services output.
• Confex and Fairway have merged to create a new wholesale buying group, The Wholesale Group. The group will launch in January 2025 and aim to support independent wholesalers. According to The Grocer, the group will represent 12% of UK wholesale, with a joint annual turnover of about £4.5 billion, 253 members and about 350,000 customers.
• Love British Food has called on wholesalers to promote domestic produce by launching ‘Buy British’ categories in a bid to boost demand.
• The Federation of Wholesale Distributors has coordinated a letter to the Prime Minister, signed by its member wholesalers. The letter highlights budget concerns about the National Living Wage increase and the rise in employer National Insurance, which together will add an additional estimated £141 million per year in costs to an already struggling sector.
• At the end of January 2025, JJ Foodservice reported it is to expand its scope and strengthen its offering for caterers through new acquisitions in the foodservice sectors. It seeks to expand into new categories and cuisines to meet evolving customer needs.

Retail Trade

• Shop price deflation was 0.7% in January 2025, above deflation of 1% in the previous month, according to the British Retail Consortium (BRC). Extensive January sales were good news for bargain hunters, with non-food products showing significant discounts with deflation at 1.8%, particularly for furniture and fashion, but less good news for retailers needing to shift excess stock. Prices aren’t expected to trend downward much longer with higher employer National Insurance costs, rising National Living Wage and a new packaging levy.

• Retailers anticipate a spending squeeze as consumer confidence remains glum. According to BRC-Opinium data, consumer expectations over the next three months of their personal financial situation fell to -4 in January 2025 from -3 in December 2024, while the state of the economy worsened to -34 in January 2025, down from -27 in December 2024 and -19 in November. The public’s spending intentions dropped six points, with expectations of spending in nearly every retail category falling.

• Retail crime – particularly retail losses from theft – remains rampant. Retail crime is at its highest level on record, according to new figures released today from the British Retail Consortium’s Annual Crime Survey. Theft also reached an all-time high with over 20 million incidents (over 55,000 per day) costing retailers £2.2 billion in 2023-24 (up from £1.8 billion the previous year).

• BRC and ONS data shows retail picked up in December 2024 which sales up by 3.5% in value and 2.9% by volume compared to the previous month. Electricals, beauty and books made for popular presents, while more expensive items like furniture took a hit.

• Retailers voiced concerns over the £7 billion new costs introduced by the Budget. Two-thirds of Chief Financial Officers (CFOs) reported they are left with little choice but to increase prices (67%) and reduce investment in jobs and shops thanks to higher employer national insurance contributions, National Living Wage and new packaging levy. Additionally, 31% of respondents from the BRC survey noted rising expenses would lead to further automation.

• A survey of CFOs at 52 retailers has revealed significant concern about trading conditions over the next 12 months, according to BRC. 70% of respondents “pessimistic” or “very pessimistic” about trading conditions over the coming 12 months, while just 13% said they were “optimistic” or very “optimistic” (17% were neither optimistic nor pessimistic). The top three concerns are falling demand for goods and services, inflation and the mounting regulatory and tax burden.

• According to new research by the Retail Technology Show, Millennials now make more purchases than Gen Z across social media platforms, including TikTok, Instagram and Facebook at 21 purchases over the past year vs 14. As shoppers’ seemingly insatiable appetite for content-led commerce continues to grow, this has given rise to a new cohort of ‘TikTok made me buy it’ consumers, an increasingly valuable shopper segment that retailers want to tap into.

Transportation & Warehousing

• From January 2025, the cap on most single bus fares in England will increase from £2 to £3 and will remain in effect until the end of the year. This change is part of an investment exceeding £1 billion in the bus sector, as announced in the Autumn Budget 2024.

• The Air Passenger Duty to go up in 2026-27, by £2 for short-haul economy flights and £12 for long-haul ones, while rates for private jets are set to go up by 50%.

• The Secretary of State for Transport has launched the JetZero Taskforce to tackle aviation emissions. Its focus includes promoting sustainable aviation fuels, advancing zero-emission flights and enhancing aviation systems for greater efficiency. In January 2025, the Sustainable Aviation Fuel (SAF) Mandate became law, mandating that 2% of this year's aviation fuel comes from sustainable sources. Targets are set to rise to 10% by 2030 and 22% by 2040. To support this shift, the Department of Transport announced a £63 million investment for 2025-26 in the Advanced Fuels Fund, aligning aviation expansion with environmental goals.

• The UK government ramps up road repairs with a £1.6 billion investment for 2025-26, fixing potholes and restoring roads in England — a nearly 50% funding boost from the previous year.

• HS2's latest report reveals that the estimated cost to construct the London to Birmingham line could surpass £80 billion at current prices, reflecting a 15% increase within a year due to rising expenses.

• Following Labour’s pledge to nationalise the railway network, the government plans to take South Western Railway into public ownership. In May 2025, the contract held by FirstGroup and MTR will transfer to the DfT’s Operator of Last Resort.

• The government is poised to approve Gatwick Airport's expansion by 27 February 2025, as part of an economic growth initiative, reports the Financial Times. A decision on Luton Airport's expansion is expected by 3 April 2025. In a January 2025 interview with the BBC, Rachel Reeves announced that Heathrow's third runway is expected to open by 2035 and could create 100,000 jobs, as well as stimulate growth.

• Following the Israel-Hamas ceasefire on 19 January 2025, Houthi militants announced plans to limit attacks on commercial ships, potentially easing maritime trade disruptions and benefitting UK shipping companies. However, threats remain elevated on Red Sea routes for the near future.

• Logicor, a top logistics developer, has completed its biggest UK project in Daventry, Northamptonshire, featuring three warehouses totalling 800,000 sq. ft, which is projected to generate 1,000 jobs.

• The Department for Transport announced that 47 train stations across London and the South East will introduce tap-in and tap-out ticketing, making key commuter routes, like London Bridge, fully contactless starting February 2025. This technology will be introduced at 49 more stations through 2025 to streamline travel.

Accommodation & Food Services

• ONS data reports that output in accommodation and food service activities expanded by 2% in November 2024, the largest positive contribution in the services sector. Both food and beverage service activities and accommodation grew in November 2024, by 1.6% and 3%, respectively. Food and beverage service output decreased by 0.7% in the three months to November 2024.
• The hospitality industry trade body, UKHospitality, warns that the industry faces an extra £1 billion in costs amid 774,000 hospitality workers becoming newly eligible for employer national insurance contributions from April 2025. The trade body has called for the government to delay or alter the tax changes announced in the Autumn Budget to help protect jobs in the hospitality industry. The £1 billion cost hike will be on top of £2.4 billion of other costs, like rising wages, due to hit the hospitality sector in April 2025, as reported by The Guardian.
• The GfK consumer confidence index dropped sharply in January 2025, to the lowest level since the end of 2023, due to higher government borrowing costs and fears of job cuts. Lower confidence among consumers may take a toll on spending on accommodation and food service activities.
• A survey of 5,000 businesses by the British Chambers of Commerce has warned that more businesses are looking to hike prices in response to the UK Budget and changes in tax and wage costs. Among the hospitality sector, rising labour costs were the top reason for businesses looking to increase prices. Meanwhile, hospitality businesses also reported one of the lowest levels of confidence relating to expectations of sales increasing over the next 12 months.
• A December 2024 report by The Caterer highlights that hospitality company insolvencies have reached a two-year low. Government data indicates that in October 2024, there were 253 insolvencies in the accommodation and food services sector, marking a 24% decrease from the 332 insolvencies in October 2023.
• The Scottish Budget has revealed the government will provide 40% business rates relief for hospitality venues with a rateable value of up to £51,000. Under the measures, UKHospitality warns that more than 2,500 businesses remain ineligible, leaving them with much higher bills than businesses located in England.
• The UK Tourism Minister has announced a new ambition for the UK to welcome 50 million international visitors per year by 2030. This is part of the government’s plan to remain one of the most visited globally and help drive economic growth. The tourism industry is worth £74 billion to the economy and represents 4% of GVA.
• Hotel chain OYO has revealed plans to invest £50 million in the UK over the next three years, opening 40 new hotels and supporting 1,000 jobs. The chain has over 200 hotels in the UK, mainly in the budget segment, but it seeks to expand its focus on the premium segment in the UK, as reported by City AM.
• Savills reports that hotel transaction volumes in Scotland reached £431 million in 2024, a 38% hike from 2023. Scotland accounted for the largest share of UK hotel deals outside of London, at around 7.5%.
• The government has announced that the price of travel permits for EU and US citizens to enter the UK is rising from £10 to £16, raising an additional £269 million annually. However, there is criticism of the hike, warning it risks damaging tourism.

Information

• ONS data reports that output in the information and communication subsector climbed by 0.9% in November 2024, the second-largest positive contribution in the services sector during the month. This growth was driven by computer programming and related activities (up 1%) and telecommunications (up 1.2%).
• The boss of TV broadcaster Channel 4, Alex Mahon, has warned that social media platforms operating in the UK should be forced to promote news content from trusted sources. More people in the UK receive most of their information and news from social media platforms than traditional sources, potentially leaving them exposed to disinformation.
• The Financial Times reports that the UK is considering a higher cap of up to 10% on foreign state ownership of British media, with the aim of encouraging investment from sovereign funds.
• The Civil Aviation Authority has granted German start-up Rocket Factory Augsburg permission to launch satellites from British soil, with Britain trying to get ahead in the race to launch satellites into space from European soil. Norway’s Andøya spaceport is one of the main competitors to the UK when it comes to launching satellites into space.
• The government is set to invest £20 million into Anglo-Danish rocket maker Orbex, as per the Financial Times. This will be in the form of a loan to fund “the company’s small launcher through to lift-off in Scotland” in 2025. The investment would make the government a shareholder in the company.
• Project Kuiper, Amazon’s satellite operation, is to go ahead with its plans to launch a broadband service in the UK, with Ofcom still considering whether to approve the company to provide this service. The satellite constellation is to be deployed in early 2025, with plans to roll out the broadband service later in the same year.
• Research by Enders Analysis has found that altnets recorded collective losses of about £1.3 billion in 2023 and this figure likely worsened in 2024 amid rising interest costs.
• The Competition and Markets Authority (CMA) has launched an investigation into tech giant Google’s position in search and advertising activities in the UK to determine whether its services “are delivering good outcomes for people and businesses in the UK”.
• The CMA has ruled that Microsoft has used its software dominance to stifle competition in the cloud services market in the UK. The regulator states that the lack of competition in cloud services was “likely to be leading to higher costs, less choice, less innovation and lower quality of service for businesses and organisations”, reports The Financial Times.
• In a survey by Boston Consulting Group and reported by the Financial Times, 51% of UK businesses plan to prioritise investment in AI over staff hiring as a result of the employers’ NI contributions hike in the Autumn Budget.

Finance & Insurance

• The Economic Crime and Corporate Transparency Act 2023, effective 1 September 2025, introduces a ‘failure to prevent fraud’ offence, creating new legal risks for firms. This strict liability offence targets 'large organisations' with at least two of these criteria: over 250 employees, more than £36 million turnover, or over £18 million in assets. Firms outside this scope should still reassess fraud prevention measures, anticipating possible regulatory expansion. The Financial Conduct Authority is expected to urge supervised firms to strengthen fraud controls in line with this legislation.
• The Prudential Regulation Authority released Policy Statement SS11/24 on solvent exit planning, requiring firms to align with its guidelines by 30 June 2026. The objective is to ensure insurance firms have clear plans for an orderly solvent exit, protecting policyholders and financial stability. Firms must establish robust exit strategies, considering capital, governance and operational risks. Compliance is required by 30 June 2026, reducing market disruption risks.
• Figures from GlobalData reveal British consumers are increasingly embracing buy now, pay later (BNPL) plans amid increasing government scrutiny, with activity in the sector climbing to around £25 billion in 2024, an almost 20% increase on the previous year. The BNPL market in the UK has increased tenfold since 2019, driven by a cost-of-living crisis, higher interest rates from other forms of credit and the disappearance of alternative payday loans.
• The FCA considers loosening mortgage rules as it comes under government pressure to increase economic growth and home ownership across the UK. Regulators could end up reviewing how much first-time buyers are allowed to borrow and issue more loans to customers with smaller deposits.
• A survey by insurance company, Ecclesiastical, reveals 10% of UK insurance brokers and agents believe there is a talent crisis and retention is the largest threat to their businesses. Top threats cited by brokers include Financial Conduct Authority (FCA), regulation or compliance (18%); competition from other brokers (16.8%); and a hard market or reduced risk appetite from insurers (15.2%).
• Data from the Bank of England shows British consumer lending grew at the weakest pace at 6.6% in November 2024 since mid-2022. The data shows households remain cautious with borrowing and savings. Britain's economy stagnated in the three months to September and the BoE estimated in December 2024 that it was continuing to flatline in the fourth quarter.
• Net mortgage approvals dropped by 2,400 to 65,700 in November 2024, data from the Bank of England shows – a figure well below the 68,500 expected from Reuters’ economists. However, mortgage providers prove optimistic as the temporary first-time buyer stamp duty holiday comes to an end in March and from April, first-time buyers will start paying the levy for properties worth £300,000 or more, instead of £425,000 currently.
• Card payments grow in popularity, but cash remains king. A 2024 Payments Survey by the British Retail Consortium (BRC) shows an uptick in the use of cash for the second year in a row to 19.9% of transactions in 2023 (from 18.8% in 2022). Debit cards remained far and away the most common method of payment, increasing to 62% of transactions (66.7% by spending). Taken together with credit cards, card payments accounted for over 75% of transactions and 85% of spending.

Real Estate and Rental and Leasing

• According to Nationwide, annual house price growth increased by 4.1% in January 2025 compared with January 2024. Prices inched upward by 0.1% month on month and the average house price stood at £268,213. The housing market has remained resilient despite ongoing affordability pressures.

• Zoopla states that new housing sales agreed were up 12% year-on-year in January 2025, highlighting a solid start to the year for the housing market, bolstered by buyers trying to avoid paying higher stamp duty from April 2025.

• A survey by the Royal Institution of Chartered Surveyors reveals that estate agents’ outlook was very positive, with expectations of house prices and property sales to climb in 2025.

• Private renters are facing a tough market, especially in the capital. ONS statistics show private rents in the UK climbed by 9% in December 2024, to an average of £1,327 per month. Rents in London surged by 11.5% over the month.

• The Resolution Foundation states that the right to buy has resulted in higher housing costs through private rents for low-income families rather than increasing home ownership. New Economics Foundation figures reveal that 41% of council homes sold under the right-to-buy scheme are now being rented out by private landlords.

• On the commercial side, businesses are re-examining their approach to hybrid working and asking staff to return to the office. The legal sector has driven a significant rise for prime office space and regional cities like Manchester, Birmingham and Leeds are growing, capitalising on lower operational costs and access to skilled talent.

• In a positive sign for the commercial property market, British Land and GIC have agreed to sell half of Citadel’s new City of London office tower to Abu Dhabi’s Modon Holding. The tower at Broadgate is currently under construction. The deal is seen as a sign of “growing international investor confidence in the top end of London’s office market” according to the Financial Times.

• The Duke of Westminster’s property company Grosvenor has sold a £306 million stake in its London Mayfair estate to the Norwegian sovereign fund. This marks the first significant investment by the Norweigan oil fund in the capital since 2018.

Professional, Scientific & Technical Services

• ONS data reports that output in professional, scientific and technical services dropped by 0.5% in November 2024, mainly down to a 2.6% dip in accounting, bookkeeping and auditing activities; tax consultancy and a fall of 1.8% in scientific research and development. The subsector recorded a 0.6% growth in output in the three months to November 2024.
• The Financial Reporting Council has launched an investigation into Big Four accounting firm KPMG over its audit of Ladbrokes owner Entain.
• The Financial Times reports that the government is “exploring scrapping promised stricter audit rules for private companies” as it seeks to lessen the burden on companies in an attempt to boost economic growth.
• The Financial Reporting Council’s annual Audit Market and Competition Update for 2024 reveals that the challenger audit firms’ share of FTSE350 audit engagements grew from 11% in 2022 to 13% in 2023. However, the Big Four audit firms (Deloitte, EY, KPMG, and PwC) continue to dominate the market, earning 98% of FTSE350 audit fees and 90% of all Public Interest Entity (PIE) audit fees in 2023. Meanwhile, the number of FTSE350 audits supplied by challenger firms has climbed from 4% in 2019 to 13% in 2023.
• A quality inspection on Tier 2 and Tier 3 audit firms released by the FRC in December 2024 has found that 57% of audits were assessed as requiring significant improvements, compared to the average of 33% over the previous four years, which is a cause for concern.
• A UK Accountancy Sector Outlook Report 2024-25 by AccountancyAge and HSBC states that “A significant rise in mergers and private equity activity is expected, driven by the need to scale and diversify”.
• In December 2024, seven regional accounting firms in the East and South East of England have merged to create Affinia (LB Group), a new challenger firm. The merger has been backed by private equity firms Sovereign Capital Partners and brings LB Group together with six other firms – RE Group, Dyer & Co., Giess Wallis Crisp, NSO Associates, Baxter & Co., and Clarkson Hyde. The new group has over 400 employees, 7,000 clients and 9 offices in East and South East of England.
• AccountancyAge has revealed the Top 50+50 Accountancy Firms 2024. According to its rankings, Evelyn Partners has overtaken Grant Thornton’s sixth spot in terms of revenue (£701 million vs £654 million), with much of this growth down to significant acquisition activity. Sumer is also making waves, becoming a challenger in the market as it reports fee income of about £140 million, representing a staggering 605% rise since 2023 thanks to substantial acquisition activity. Highlighting the shift to advisory services, the survey has found that fees from consultancy services have continued to climb across the top 100. In 2024, fee income from consultancy averaged £77.2 million, up from £75.9 million the year before.
• Two of the Big Four accounting firms, EY and PwC, are set to fall short of their 2025 targets for female partner representation in the UK. While Deloitte and KPMG have already met their UK targets, the two firms are on track to miss their global partnership targets. The Big Four have all set targets to increase their proportions of female partners, which would help in reducing their gender pay gaps.
• According to data from Savills, since 2019, “London’s legal sector has driven a significant rise in demand for prime office space, with the industry accounting for 20% of the London office market”. Following the COVID-19 pandemic, legal firms have invested in high-quality workspaces that support hybrid work models in an attempt to attract and retain top talent amid the ongoing war for talent in the industry.
• Data from the EU Industrial R&D Investment Scoreboard shows that the number of British companies listed in the global top 2,000 R&D spenders has nearly halved in the decade to 2023, from 118 in 2013 to just 63 in 2023. This points to the difficulties faced by the UK to win the global AI race, as reported by the Financial Times.

Education

• Since 2017, English universities have faced income decline due to frozen £9,250 fees amid inflation. About 90 universities are restructuring, implementing redundancies to reduce wage bills. Nearly a quarter of top UK universities are cutting staff and budgets, risking 10,000 job losses, raising concerns about harming the sector's international reputation.
• The UK government will invest £20 million in new regional improvement teams to address struggling schools. Currently, over 600 'stuck' schools in England have repeatedly poor Ofsted reports, affecting 300,000 students. These students typically achieve worse results by 14 percentage points in primary and a grade lower per subject in secondary school. RISE teams will create tailored improvement plans, with up to £100,000 in funding available for specialist support per school, compared to the previous £6,000 grant. The initiative seeks to strengthen the school accountability system and deliver better outcomes for pupils and parents.
• A legal challenge against the UK policy taxing private school fees is set for a hearing. This controversial policy, vital to Labour’s 2024 election manifesto, imposes VAT on private school fees. Lord Pannick successfully argued for an expedited hearing, citing parent uncertainty due to the policy's impact. Experts predict most schools will hike fees by 10-15% to cover potential revenue losses, though some may absorb the costs.
• Most graduates can expect to earn more than non-graduates although studies show the extra money earned after a university education has dropped. According to HESA’s survey of 2020-21 graduates, the average salary reported 15 months after gaining a degree was £29,699. The disparity in earnings differs significantly between subjects, with little or no difference in earnings for those studying creative subjects or artistic degrees, while rising to £250,000-£500,000 more over a lifetime in subjects like law or economics.
• Following the introduction of VAT on private school fees, interest from Chinese buyers has grown amid concerns may schools will struggle to keep doors open, according to Chinese consultancy, Venture Education. The Learning and Work Institute warns of unequal growth thanks to skills chasm and huge regional disparities in qualifications. The ThinkTank notes the proportion of people with higher education qualifications is twice as high in some parts of the UK than others, varying from two-thirds in London to one-third in Greater Lincolnshire. If trends continue, 71% of Londoners and 65% of adults in Scotland will have a degree by 2035, compared with 29% in Hull and East Yorkshire and 39% in Norfolk.
• The government has been urged to provide clarity to universities and students by confirming future tuition fee caps increases across England. In November, ministers said the tuition fee cap in England would go up for only the second time since 2012. In 2025-26, the cap will rise from £9,250 to £9,535. Any further inflation-linked increases to the cap will be contingent on universities implementing a “sustained efficiency and reform programme”.
• Since 1 January 2025, private schools are no longer exempt from VAT and have faced a 20% rise in fees. The government estimates the additional tax income will amount to £460 million extra to spend on state schools. A series of independent private schools announced plans to close due to financial challenges, including the introduction of VAT on school fees and rises in the national minimum. The list includes Loughborough Amherst School and Earl Spencer’s prep school, Maidwell Hall.
• Introduced into Parliament in December 2024, The Children’s Wellbeing and Schools Bill introduces a wide variety of measures to help children and families, from school reform and home education to safeguarding. Core focus areas include teacher training and ensuring all schools have qualified teacher status. The Bill sets out that all teachers will be part of the same core pay and conditions framework – whether they work in a maintained school or an academy, while also mandating the curriculum and assessment system undergo review.

Healthcare & Social Assistance

• A World-leading AI trial to tackle breast cancer has launched. Nearly 700,000 women will participate in a UK trial to test AI tools for earlier breast cancer detection, the Department of Health and Social Care announced on 4 February 2025. Currently, two specialists review each mammogram, but this AI technology allows one specialist to handle screenings safely and efficiently. If successful, the trial could free up hundreds of radiologists, enabling them to see more patients, address rising cancer rates, save lives and reduce waiting lists. The EDITH trial, funded by an £11 million grant from the National Institute for Health and Care Research, aims to revolutionise cancer screening.
• NHS England will halt plans to advance cancer diagnosis, women's health and childhood vaccinations to prioritise reducing waiting times. The health service will also abandon commitments to expand dental access, stroke prevention drugs and care for those with learning disabilities. Plans to increase dementia diagnoses, patient choice in treatment locations and talking therapies for mental health will be scrapped. Health Secretary Wes Streeting has directed the NHS to focus on shortening A&E, cancer care and hospital treatment waiting times. This shift aims to benefit hundreds of thousands with faster access and diagnosis as surveys highlight public concern over extended NHS waiting periods.
• Following a review of the New Hospital Programme (NHP), it was found that the previous government's commitment to deliver '40 new hospitals' by 2030 was behind schedule, unfunded and undeliverable, according to an assessment by the Infrastructure Projects Authority. The current government is committed to rebuilding the NHS and restoring trust in government. The new plan, which is both affordable and honest, will be backed with £15 billion of new investment over consecutive five-year waves, averaging £3 billion a year.
• With the over-65 population now at 13 million, the demand for adult care has surged, leading to over two million requests in 2022-23 and £23.7 billion in expenditures. Key issues include a workforce shortage of 131,000 vacancies and 430,000 individuals awaiting assessments or care, underscoring the need for substantial investment and reform to address these systemic problems effectively.
• The government’s reform plan pledges to meet the NHS standard that 92% of patients should wait no longer than 18 weeks for treatment by March 2026. This compares with the current performance of just 59%. To do so, the Health Foundation estimates an additional 2.6 million more treatments will be needed per year to meet the 18 week standard.
• In January 2025, Keir Starmer launched a new partnership between the National Health Service and the private sector in England to tackle the growing waiting list, which stands at 7.5 million. The government also outlined plans to introduce local diagnostic centres offering an extra 450,000 appointments for tests.
• New funding and reforms are set to help the social care sector. Health and Social Care Secretary Wes Streeting will confirm an £86 million boost to the Disabled Facilities Grant for the 2025-26 fiscal year - on top of the £86 million announced for the next financial year at the Budget, taking the annual total to £711 million - to allow 7,800 more disabled and elderly people to make vital improvements to their home, allowing them to live more independent lives and reducing hospitalisations. Care workers will be better supported to take on further duties to deliver health interventions, such as blood pressure checks, meaning people can receive more routine checks and care at home. As part of the long-term plan to overhaul social care, the government will launch an independent commission into adult social care to be chaired by The Baroness Casey of Blackstock DBE CB, to inform the work needed to deliver in January 2025.

Arts, Entertainment & Recreation

• Gambling companies in Britain might need to revise their advertising strategies following a ruling against a betting firm for unlawfully targeting a problem gambler with over 1,300 marketing emails. The judge noted that although the man hadn't opted out of marketing, he was deeply entrenched in gambling addiction and unaware of how his data was utilised. The Gambling Commission has introduced measures to protect consumers better. However, campaigners argue the industry often fails to identify high-risk gamblers. According to the Office for Health Improvement and Disparities, around 1.6 million adults in England who gamble could benefit from treatment or support for harmful gambling.
• ONS data shows Arts activity shrinks by 15% between July and October 2024. The drop in the category – which includes the performing arts, support activities, artistic creation and arts facilities – is contributing to reduced output in the wider category of arts, entertainment and recreation. This fell by a cumulative 4.1% over the same period.
• The Department for Culture, Media and Sport is set to introduce a statutory levy on gambling companies to help fund addiction treatment. New online gambling limits to be set – £5 per spin limit will apply to all adults aged 25 and over with a £2 per spin limit for 18 to 24-year-olds.
• According to the Entertainment Retailers Association (ERA), UK music sales hit record high as Taylor Swift tops album sellers. ERA data reveals that consumption of music in the UK – based on sales and streams – grew by 9.7% in 2024 to 200.5 million album equivalents. The volume of audio streams grew by 11% to 199.6 billion.
• BBC has commissioned new art and culture programmes as part of its commitment to Art & Culture. New Arts TV programmes unpack contemporary culture, celebrate British creativity and explore landmarks in the global story of art including Renaissance: The Blood and The Beauty, Simon Schama’s History of Us and the return of epic series Civilisations.

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