Business News Round Up (24/03/2026)
Tax shoots up list of key concerns for business
Tax rates are becoming an increasing burden for businesses and are threatening their long-term future, according to new research. The growing impact of tax is a key finding in the latest State of the Nation Directors survey conducted by the Institute of Directors (IoD) Scotland. Five years ago, only 28% of businesses identified business tax as a concern. That has increased to 65%. It has moved from fifth priority in 2024 to top of the list. Scotland’s income tax rates are putting additional pressure on businesses, with 71% of respondents saying they are too high. Meanwhile, 41% said changes to employer National Insurance Contributions have significantly impacted their organisation. Tax divergence remains a worry for 74.8% of those surveyed, with respondents saying the disparity between taxation in Scotland compared to the rest of the UK will seriously impact their abilities to attract investment and hire the necessary skilled workers.
UK economy faces renewed headwinds from higher energy prices as inflation outlook worsens
UK GDP growth is expected to slow to 0.7% in 2026, down from 1.3% in 2025, as pressures from a fresh energy price shock push up inflation, weigh on spending and delay interest rate cuts, according to KPMG UK’s latest Economic Outlook. Disruptions to energy supplies stemming from conflict in the Middle East are also expected to drive an increase in headline inflation. Households are likely to see energy bills increase in the third quarter of 2026 once the April Ofgem price cap period ends. Headline inflation is now expected to rise in the second half of the year, potentially peaking at 3.6% in September 2026, due to higher wholesale energy prices, keeping inflation above the Bank of England’s 2% target over the coming year. Businesses are likely to face more immediate cost pressures, increasing the risk of second-round effects as higher energy costs are passed on to consumers.
https://kpmg.com/uk/en/media/press-releases/2026/03/uk-economy-faces-renewed-headwinds.html
Treasury warned to tighten controls for £203bn public investments
HM Treasury needs to tighten its controls and provide clear guidance on how the government manages hundreds of billions in private sector loans and business investments, or risk destabilising public finances and increasing national debt, according to a new report from the National Audit Office. When the government makes loans to the private sector or takes equity stakes in businesses, these are called financial transactions. The portfolio stood at £203 billion in 2024, with Labour planning to spend a further £23.8 billion on them between 2025-26 and 2029-30. While the government intends to use this huge portfolio of FTs to support growth and boost the national coffers, the NAO warned that the Financial Transaction Control Framework, essentially the rulebook for ensuring these investments are handled safely, remains a “work in progress”.
https://www.digit.fyi/treasury-public-investments
UK business bank lending increased by 9% in 2025
Shoppers of finance and founders alike are noticing change: UK SME bank lending rose 9% to £68bn in 2025, as credit conditions eased and a wider mix of lenders and products made borrowing more visible and flexible, here’s what that means for smaller firms. The UK’s start-up engine didn’t stall. Some 314,000 new businesses formed in 2025, edging up on 2024 and nudging the overall business population into positive territory. That quiet growth suggests entrepreneurs are adapting to tougher conditions rather than retreating. For founders, this means more peers, more niche service providers, and potentially more competition for local customers and talent. It also means lenders have a steady pipeline of potential clients, which encourages product innovation aimed at early-stage needs, think fast decisioning and simplified credit processes.
https://www.creditstrategy.co.uk/knowledge-hub/uk-business-bank-lending-increased-by-9-in-2025