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HMRC sees UK firms overpaying billions in corporation tax as complex system hits businesses

2025-09-29 12:25:04 By

UK businesses overpaid a staggering £14.2bn in corporation tax last year, a report by a prominent accountancy firm has revealed, highlighting the ongoing challenges posed by the nation's intricate financial system.

Chancellor Rachel Reeves has assured entrepreneurs and investors of her support for British business, despite economic pressures from President Trump's tariffs and tax increases announced at the Autumn Budget, as reported by City AM.

However, a complex tax regime is causing deep-seated issues, with many firms overpaying HMRC, as per findings by UHY Hacker Young.

The accountancy firm's research, derived from a Freedom of Information request, indicates that UK companies overcompensated the government by £14.2bn in corporation tax in the year ending April, affecting approximately 400,000 businesses.

The study notes that the overpayment for the fiscal year 2024 to 2025 was 21 per cent higher than the previous tax year.

Corporation tax, which deducts a portion from company profits, operates on a tiered system, with the principal rate set at 25 per cent for businesses earning profits above £250,000.

UHY Hacker Young's accountants argue that HMRC's approach often results in firms paying excessive corporation tax due to potential penalties if profits fall short of projections.

This situation can lead to "significant cash flow problems," the researchers warn, as it falls upon companies to reclaim any overpaid funds.

"Overpaying corporation tax is a double hit for struggling businesses," remarked Brian Carey, a partner at UHY Hacker Young.

"Not only do they suffer from lower-than-expected profits, but they also see vital cash locked up with HMRC."

This statement comes on the heels of a separate report by Thomson Reuters which highlighted that businesses now contribute to over a quarter of all UK tax receipts.

The surge in corporation tax receipts has been a significant factor, with the government now collecting over £200bn through this tax.

Concurrently, concerns are being raised about HMRC potentially underestimating the extent of tax evasion.

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The latest acquisitions and equity investments in Wales

Here we feature the latest equity funding raising and business acquisition deals in Wales. Game industry veterans Susan and Lee Cummings have secured a significant six-figure investment from Angels Invest Wales, PlayCap and the Games Angels for their new game development studio, 10six Games. The investment boost comes ahead of the upcoming first game release by 10six Games. The company has also announced the appointment of industry guru Nick Button-Brown as a company director. Led by lead investor Huw Bishop, the pre-seed round has been funded by a syndicate of 12 angel investors including members of PlayCap (a global angel network of women from the games industry who specialise in early-stage investments in studios, companies, and tech in games) and The Games Angels (a global angel network of Games Industry veterans). The Development Bank of Wales has provided match-funding from the Wales Angel Co-Investment Fund that is run by Angels Invest Wales. Susan and Lee Cummings previously set-up Tiny Rebel Games, the award-winning game production studio behind Doctor Who: Legacy and Infinity for mobile devices and computers. Susan also co-founded 2K Games, developing Bioshock, Borderlands, X-Com, 2K Sports, and Civilization. She is a visiting professor at the University of South Wales along with husband Lee who worked at Sony before moving to Rockstar Games’ Grand Theft Auto team where he was a producer on GTA: San Andreas and GTA 4, and where he was a key member of the redesign team on Bully. More recently, he has led the creative design for various award-winning games including Doctor Who, Star Trek, War of the Worlds, and Wallace & Gromit (under licence). Mr Button-Brown has worked across the tech and games industry for more than 20 years, including helping grow and scale Improbable, and helping take Sensible Object to a trade sale to Niantic. He is currently chair at Outright Games, Chair at Coherence and on the board at Adinmo. He founded The Games Angels in 2021, a community of games industry veterans investing and supporting start-ups. Nick is also on the board at UKIE (one of the UK’s games industry representative bodies) and OKRE (a charity promoting links between research and entertainment) as well as driving Funding Quest, a programme improving the investability of UK Games companies. Ms Cummings said: “Representation in video games is more important than ever, and technological limitations have long constrained the scale of customization developers could offer. With our proprietary technology and our upcoming game “You v Zoombies, we’re breaking those barriers—creating fully personalized, ever-evolving experiences for every player. This level of customisation was previously unattainable, but thanks to advancements in generative AI, we’re making it a reality right here in Wales.” Mr Cummings said:“Our technology enables autonomous AI-driven design decisions, from custom starting spells and upgrades to gameplay sequencing and story development. It’s an incredibly exciting breakthrough. “We’re also grateful for the support of gaming industry expert Nick Button-Brown and our funding partners, who share our vision for the future of personalized gaming.” Lead investor Mr Bishop said: “It was a pleasure to bring together a group of angels to support 10six Games, a new game development studio led by seasoned founders and gaming rockstars, Susan and Lee Cummings. They have a uniquely exciting vision for the next generation of player character and story customisation in games. Their track record is second to none and I look forward to supporting them in the future”. Tom Preene of Angels Invest Wales said: “This is a team surrounded by some of the top experts in the global games industry. They are working at the cutting edge of technology and are known for their innovation and creativity. Gaming is a growth industry, and it is exciting to think what it could mean for Wales as more developers start to recognise South Wales as a gaming hub.” The investment by the syndicate of angels was match funded by the Wales Angel Co-Investment Fund. With equity and loans from £25,000 to £250,000, the £8 million fund is available to syndicates of investors seeking to co-invest in Wales based SMEs. Syndicates are managed by Lead Investors who have been pre-approved by Angels Invest Wales. Cellar Drinks Powys-based Cellar Drinks has acquired Hurns Beer Company. The deal, the value of which hasn’t been disclosed, marks a significant milestone in Cellar Drinks’ ambitious growth plans. Hurns Beer Company will continue to operate from its existing depots in Swansea and Caerphilly and under its own name. The acquisition also brings opportunities for new and existing Hurns customers with an expanded product range, including new brewery partnerships, an extensive wine portfolio, premium spirits and soft drinks. Rhys Anstee, managing director of Crickhowell-based Cellar Drinks said: “I am thrilled to take on the stewardship of Hurns Beer Company and cannot wait to build upon its incredible legacy. Hurns has a rich history, and we are committed to honouring its past while also driving it forward into a new era. Our customers can look forward to unrivalled service levels as well as an expanded and diverse product offering, ensuring that we continue to be their trusted drinks supplier for years to come.” Connie Parry, from the Hurns family, said: “As a family, we are delighted to hand the keys over to Rhys. We have known each other for many years, and he is the ideal custodian to lead the business into its next chapter. The entire team is excited about the future and looks forward to working together to continue growing the business.” Chyrelle Anstee, director at Cellar Drinks Co, added:“Our new Hurns customers can look forward to a new online ordering facility, lots of engagement from key suppliers, and a new bi-monthly brochure that will allow them to focus on profitability in these uncertain times. We’re committed to offering innovative solutions that make doing business easier and more profitable for all of our customers.” The Hurns was originally established as the Hurns Mineral Water Company by Arthur A Hurn in the late 1800s. Burbank A Cardiff fintech start-up has raised £5m to support global expansion plans. It comes after Burbank earlier this month successfully demonstrated the world’s first certified online card-present transaction. Known as card-present over internet (CPoI) its tech platform redefines two-factor authentication so allowing shoppers online to simply tap their card to their mobile device and securely enter their PIN to complete a transaction, just like they do in-store. Until now, online payments were card-not-present (CNP) transactions, which have high and increasing levels of fraud. Currently, online merchants face over $40bn annually in fraud and charge backs, which is when a cardholder disputes a transaction and the merchant is obligated to provide a refund. The £5m seed funding round was led by Mouro Capital with participation from Anthemis (supported by Foxe Capital), Portfolio Ventures and others. These funds will accelerate the global roll out of Burbank’s platform. Justin Pike, the Newbridge-born founder and chief executive of Burbank, said, “We are extremely excited to bring this evolution in payments to the world. The payments experience should be the same for everyone, regardless of channel. “In-store we pay by tap and PIN, which is globally trusted and familiar, and now, for the first time ever, we’re enabling the same process in online channels. Simple, secure, and scalable. The way it should be.” Manuel Silva Martinez, general partner at Mouro Capital, said: “I’m thrilled to support Justin and his team of payments experts. Burbank offers a simple, seamless integration through a single while-label SDK (software development kit), which securely integrates into existing technology stacks, and supports multiple schemes on iOS and Android. It’s what the market needs.” Ruth Foxe Blader, general partner at Foxe Capital, added, “CPoI is the first protocol that legally shifts liability away from the merchant. It’s a massively scalable approach, with global demand.” Burbank’s advanced platform offers unparalleled convenience and robust security, empowering consumer-facing businesses to innovate in customer experience and unlock new revenue opportunities.” Burbank owns the intellectual property to its technology and said it will soon receive two global patents. Its revenue model will see it taking a percentage of the savings made for merchants on the cost of processing. Hugh James deal Cardiff headquartered legal firm Hugh James have advised the shareholders of Kent-based Highway Care Limited on its sale to Ramudden Global, a leading provider of infrastructure safety solutions. Kent-based Highway Care, a leading provider of innovative road safety solutions, offering a broad range of products, including permanent and temporary road barriers, mobile traffic products, automation systems, and security solutions. The acquisition by Ramudden Global ensures continued investment in the company’s product development, allowing it to expand its reach and enhance its service offering in the road safety sector. Huw James corporate and commercial partner Andrew Hoad led the deal, supported by solicitor Daniel Burke. Mr Hoad said: “It has been a great pleasure working with John and the Highway Care team throughout this sale. We congratulate Ramudden Global on their successful acquisition and look forward to seeing Highway Care continue to flourish under its new ownership.” Curtis Bowden & Thomas Acquisitive professional services firm Xeinadin has acquired south Wales accountancy firm Curtis Bowden & Thomas. The value of the deal for the firm, which has offices in Tonypandy and Bridgend, has not been disclosed. Established in 2003, Curtis Bowden & Thomas provides a range of general accounting and taxation services to local businesses. The 22-strong team will continue to operate from their offices with the support and resources of being part of Xeinadin’s network. The firm will continue to trade as Curtis Bowden & Thomas. Robert Lloyd, Stephen Smith, and Stephen Davies partners with Curtis Bowden & Thomas, said: “We’re excited to join Xeinadin and continue delivering the high-quality service our clients expect. South Wales faces distinctive challenges, from economic regeneration to skills shortages, and we’re confident that being part of Xeinadin will improve our ability to support local businesses. With access to a wider network of expertise and resources, we’ll be better equipped to help our clients navigate these challenges and drive sustainable growth.” Last year Xeinadin acquired Carmarthen-based accountancy firm Clay Shaw Butler and Bridgend-based Clay Shaw Thomas. Derry Crowley, chief executive at Xeinadin, said: “Curtis Bowden & Thomas has built a strong reputation in South Wales by providing businesses with the support they need to thrive, despite the unique economic challenges of the region. With a deep understanding of the local business environment, their expertise aligns well with Xeinadin’s commitment to supporting growth in Wales and we’re excited to welcome them to the team.”

Nikhil Rathi secures another five-year term as FCA chief amidst UK regulatory overhaul

Nikhil Rathi has been reappointed as the chief executive of the Financial Conduct Authority (FCA) for a further five years, tasked with the government's new mandate to cut back on unnecessary and repetitive regulation, as confirmed by the Chancellor. Rathi, who previously served as a Treasury official and the CEO of the London Stock Exchange, will continue his leadership at the FCA, the UK's principal financial regulator, as reported by City AM. Should he complete this term, Rathi's tenure at the helm of the FCA will reach a full decade. The Chancellor has chosen to maintain stability in the role, highlighting that Rathi's contributions have been "crucial" to the government's ambitious regulatory reform efforts aimed at streamlining the UK's regulatory framework to eliminate perceived impediments to economic expansion. On Christmas Eve, Rachel Reeves and Keir Starmer issued a directive to the heads of the UK's ten leading regulatory bodies, urging them to "tear down the regulatory barriers" they believe are constraining economic progress. This initiative to orientate the UK's regulatory bodies towards promoting growth has led to the departure or removal of several regulatory leaders, including those at the Competition and Markets Authority and the Solicitors Regulation Authority. The campaign has also triggered a significant reshuffle within the financial regulatory landscape, exemplified last month by the merger of the Payments Systems Regulator with the FCA, which aims to minimise redundant regulatory obstacles for businesses. Rathi will oversee the seamless integration of the merger. Upon hearing of his reappointment, he commented: "I am honoured to be reappointed by the Chancellor. The FCA does vital work to enable a fair and thriving financial services sector for the good of consumers and the economy." In the previous month, both the FCA and the Bank of England's Prudential Regulation Authority abandoned their initiatives to regulate firms' diversity, equity and inclusion (DEI) performance. Reflecting on these actions and other measures to reduce regulatory burden, Rathi stated: "I am proud of the reforms we have delivered to support growth, bolster operational effectiveness, set higher standards and to keep our markets clean and open." Reeves expressed her approval, saying: "Nikhil Rathi has been crucial in this government's efforts to reform regulation so it supports growth and boosts investment – I am delighted he will be continuing his leadership of the FCA."

Banks face turmoil as HSBC and Barclays shares plummet amid escalating global trade war

The 'Big Five' banks on the FTSE 100 were engulfed in losses on Wednesday as tensions escalated in the global trade war. China retaliated by hiking its tariff on US goods to 84 per cent, a response to President Donald Trump's 50 per cent levy that came into effect today, pushing China's total import tax to a staggering 104 per cent, as reported by City AM. HSBC shares took a hit of over four per cent due to Beijing's countermove. Barclays and Standard Chartered also felt the heat, with their shares dipping nearly five per cent. Stocks had already been under pressure in early trading as Trump showed no intention of retreating from his tariff strategy. Domestically-focused lenders Lloyds and Natwest saw their shares fall nearly three and four per cent respectively. Russ Mould, investment director at AJ Bell, commented: "Yesterday's fragile recovery in stocks has been shattered by renewed selling as reciprocal tariffs on what the Trump administration regards as the 'worst offenders' comes into effect." "Investors had initially taken some positives from a willingness in the White House to negotiate with Japan and Israel but an escalation with China triggered another sell-off on financial markets." Bloomberg calculations on Tuesday revealed that more than $700bn (£546bn) of global bank stocks' market value has evaporated since Trump's 'Liberation Day.' HSBC, with its Asia-centric operations driving losses, has alone seen almost $30bn (£23bn) wiped off its value. Britain's prime lending institutions are scheduled to unveil their half-year financial reports towards the end of July, a period that may bring unwelcome news to investors as they absorb the repercussions. Shore Capital's equity analyst Gary Greenwood commented on the anticipated content of the reports, indicating they are expected to mirror "volatility in capital markets". He elaborated: "IPO's that were going to happen, impact in market related activity, impact in wealth management areas – that's where you'll feel it first." Greenwood also predicted lenders' future guidance would likely suffer due to tariffs. He explained further, saying: "On an accounting basis, banks might start to add a bit to their provisions." "More uncertainty could make them more cautious about lending and risk appetite could change to not push as hard in terms of growth." Such developments pose additional challenges for Chancellor Rachel Reeves, who has been actively advocating for banking leaders to help bolster growth within the UK.

HSBC to shut UK investment banking arm as part of major global restructuring

HSBC is preparing to scale back sections of its investment banking operations across the UK, Europe and North America as part of a comprehensive global restructuring strategy under new CEO Georges Elhedery. This development follows the bank's announcement last year of plans to achieve $3bn (£2.4bn) in cost savings and restructure into four new divisions, divided between East and West, as reported by City AM. "We will retain more focused M&A and equity capital markets capabilities in Asia and the Middle East, and we will look to wind-down those activities in Europe, the UK and the Americas," an HSBC spokesperson informed City AM. The company aims to transition to a "Our intention is to move to a more competitive, scalable, financing-led model," according to a memo sent to staff and seen by Reuters. In the internal communication, management acknowledged that the changes would be disruptive for those involved in dealmaking and corporate capital raising in the affected regions. "As part of our ongoing efforts to simplify HSBC and increase leadership in our areas of strength, we are finalising a review of our Investment Banking business," the spokesperson further added. The news has led to a 0.7 per cent drop in HSBC’s share price. Elhedery’s streamlining plan for HSBC has already resulted in numerous senior bankers being laid off, with predictions that over 40 per cent of HSBC’s top 175 managers will be let go. HSBC has witnessed a series of departures from its senior executive team, including Annabel Spring, the head of global private banking and wealth; Celine Herweijer, the group sustainability officer; Stephen Moss, the Middle East chief; and European leaders Colin Bell and Nuno Matos. The bank's new CEO, Elhedery, who took over from Noel Quinn four months ago, has swiftly initiated significant changes at the banking behemoth with an aim to curb expenses and streamline operations.

Mastercard class action funder to sue Merricks after £10bn case settled for £200m

The litigation financier in the colossal class action lawsuit against Mastercard is preparing to take legal action against its own class representative after he settled a £10bn case for a mere £200m. The case, which centred around alleged overcharging of interchange fees on Mastercard debit and credit cards, concluded last month following a nine-year legal battle that reached the Supreme Court, as reported by City AM. This was the first case under the UK’s 2015 Consumer Rights Act, which permits collective proceedings in competition matters. It also followed the European Commission ruling that found Mastercard's interchange fees violated EU laws. Lawyer Walter Merricks led this class action, with Innsworth Capital providing funding up to £60.1m, plus an additional £15m to cover defendant costs if unsuccessful. The claim sought compensation of approximately £10bn, but it was disclosed in December that it settled for £200m. Documents unveiled on Thursday showed that half of the settlement sum, £100m, would be equally distributed to all who submitted a claim, estimated to be around 44 million people, equating to £2.27 each. The remaining £100m "will be used to pay the litigation funder." The funder indicated they would contest the settlement and claimed that Merricks would be violating his obligations under the litigation funding agreements. In his witness statement, Merricks expressed that "despite this stance taken by Innsworth, I remained of the view that the interests of the class were best served by agreeing the £200m settlement, so I indicated to Mastercard that I was minded to accept the offer." He also noted in his statement that due to this decision, Innsworth Capital is intending to initiate arbitration proceedings against him, which includes a claim for damages. He detailed how, upon informing Mastercard of the impending claim by Innsworth, Mastercard decided to make £10m available "in order to deal with the threatened arbitration against me." Seema Kennedy, executive director at Fair Civil Justice, remarked on the advancements: "this claim shows why reform is so badly needed, and we will continue to call on the Government to introduce measures to improve transparency and accountability of the funding sector."

Saga anticipates higher profits and strong travel growth, plans to refinance £325m debt

Saga, the over-50s financial services and travel provider, has announced that it anticipates reporting an underlying profit before tax higher than previous forecasts. In a recent trading update, the company predicted that the underlying profit before tax for the last six months of 2024 would be slightly higher than the previous year, as reported by City AM. Saga's travel division is expected to report an underlying profit before tax "in the high single-digit millions", compared to the £1.5m reported in the prior year, indicating revenue growth of 15 per cent and passenger growth of nine per cent. Over the past six months, Ocean Cruise achieved a load factor of 91 per cent, three per cent ahead of the previous year, while River Cruise reported a load factor of 89 per cent, with combined ticket prices and onboard revenue per passenger amounting to £327, a total increase of 15 per cent from last year. "We continued to generate strong demand for both our cruise and travel businesses," stated Saga CEO Mike Hazell. Last month, Saga announced a 20-year partnership with Belgian insurance giant Ageas for motor and home insurance, which will see Saga’s price-comparison website, pricing, claims and customer service activities taken over by the insurer. However, earlier this week, City broker Peel Hunt downgraded Saga’s stock rating, noting that the firm faced "a refinancing hurdle" this year. The funds from the partnership with Ageas will be utilised by the firm to refinance £325m of outstanding debt by spring this year. Following the deal, Peel Hunt reduced its price target for the stock to 120p. Since the beginning of 2025, Saga’s shares have declined by over nine per cent. Looking forward, Saga reported that both Ocean Cruise and River Cruise's booked load factors are surpassing last year's figures. The company's River Cruise division is scheduled to launch a new ship, the Spirit of the Moselle, in July 2025, which will boost capacity. Currently, the booked revenue for travel stands at £126m, marking a 10 per cent increase compared to the same period last year, with 39,000 passengers booked in, an 11 per cent rise from the previous year.

Triodos Bank appoints former HSBC boss as UK chief executive

Ethical bank Triodos has appointed a new chief executive in the UK. Mark Clayton joined the Bristol-headquartered company last year as its chief operating officer and is expected to take up the post in early summer. He will succeed Dr Bevis Watts, who announced last October that he would step down after nearly a decade at the helm. Mr Clayton, who was previously chief operating officer at Unity Trust Bank, had a 23-year career at HSBC, where he held various senior roles and led large teams within the retail banking division. Gary Page, chair of Triodos Bank UK, recently re-appointed as chair for a final term of three years, said: “It was crucial for us to find a new CEO with the right values and passion for ethical and sustainable banking, as well as a strong understanding of our customers and a rapidly changing banking landscape. "Mark has made a really positive impact since joining Triodos and we are confident he is the right person to lead the bank forward and deliver the impact we want to have. My thanks go to Bevis for his contribution over many years and for his commitment to assist in the smooth transition over the coming months. We wish him well for the future.” Mr Clayton said he was driven by a "strong desire to protect the world" and was "hugely honoured" to be given the top job at Triodos. "I am excited for the opportunities ahead at Triodos Bank UK," he said. "We have an excellent leadership team in place working to deliver on our mission of making money work for positive change in society." Triodos Bank UK, a certified B Corporation, has more 300 staff based in Bristol headquarters, as well as offices in London and Edinburgh. With a balance sheet of approximately £2bn, the bank is well known for financing UK pioneers in sustainability.

Investors pile into gold as Trump's tariff turmoil continues

The price of gold has soared to another record peak, fuelled by concern over President Donald Trump's tariff strategy and a weakening dollar, leading investors towards the traditional sanctuary of precious metals. Gold's value ascended 1.5% to surpass $3,200 (£2,451) per troy ounce on Friday – an unprecedented level – as Asian markets stumbled due to the ongoing repercussions of President Trump's deferred tariff measures, as reported by City AM. Despite its status as a refuge for capital during turbulent times, the precious metal had initially been swept up in a severe sell-off amid tariff-driven market chaos. Gold spot prices experienced a remarkable increase of over 30% since the beginning of 2024 but witnessed a downturn from $3,166/oz to $2,973/oz from April 2 to April 6. Market experts believe that investors were compelled to sell their gold assets to cover margin calls from creditors. Pepperstone analyst Michael Brown pointed to the removal of the "risk premium" associated with gold after its exclusion from the postponed tariffs Trump labeled ‘Liberation Day’ as the cause of the brief dip. Nevertheless, from April 6 onward, gold has bounced back robustly, registering its most significant bi-day surge since 2020 and reaching a new all-time high. Market strategists have attributed this latest rally to the faltering US dollar – which renders the metal more accessible to buyers using other currencies – and predictions that central banks might accelerate interest rate cuts more than previously presumed to prevent an economic deceleration. This week has seen the dollar descend to its lowest level against major global currencies in a decade. Dominic Schinder of UBS Global Wealth informed Bloomberg TV that further rate cuts from the Federal Reserve would provide another "leg up" for gold, as the yield on holding cash – a common refuge amid prevalent bearish sentiment – is lower. This rally boosted London-listed gold miners, leading the FTSE 100 higher on Friday morning. Fresnillo saw an increase of approximately 5.9 per cent, while Endeavour experienced a surge of over 4.5 per cent in early trades. Brokers at Peel Hunt upgraded precious-metal-miner Fresnillo from 'hold' to 'add' in a note, suggesting that sustained high gold and silver prices would generate more cash flow at the commodities giant. "[The first quarter] saw gold and silver prices well ahead of expectations on rising market uncertainty," they noted. "The extreme US tariff announcements simply added to this uncertainty.

Lloyds Banking Group to transform head office with £200m investment

Lloyds Banking Group is set to pour £200m into the revamp of the Scottish Widows headquarters, making it the financial giant's primary hub in Scotland. The renovation of the Port Hamilton building on Morrison Street, Edinburgh, executed in collaboration with Drum Property Group, pledges to bolster Lloyds' presence in the Scottish capital where approximately 10,000 staff are based, as reported by City AM. For nearly three decades, the building has served as the core office of Scottish Widows and is expected to retain its role post-upgrade in 2027, continuing to oversee pensions and investments. This eight-storey property, spanning 325,000 sq ft and known for its distinctive curved roof, stands out as an iconic edifice in Edinburgh’s financial district. According to Lloyds, this initiative is part of a broader commitment to cultivate a more sustainable and environmentally friendly office network across the UK, advancing towards their net zero ambitions. This endeavour aligns with the group's previous movements, including last year's full refurbishment of the Bristol office and relocation to Leeds’ most eco-efficient office space. However, earlier this month, City AM detailed Lloyds’ plans to shutter its Liverpool facility later this year, a decision affecting around 500 employees. This closure is seen as part of a wider strategy to maintain "fewer, better-equipped" offices and streamline operational costs. In a statement, Lloyds confirmed that no jobs have been cut as part of the closure plans. Instead, employees at the office will be asked to relocate to its Cawley House office in Chester. The bank added that 80 per cent of employees based in Speke are currently working remotely or will be doing so when the building closes. This news follows reports that senior staff at Lloyds Bank may face bonus cuts if they do not attend the office at least twice a week. Chira Barua, CEO of Scottish Widows, commented: "There’s a real buzz in the fintech scene in Scotland and we’re committed to staying right in the centre of it." He further stated: "We’ve made huge progress in connecting customers with their financial futures and we’re starting to see how powerful digital engagement and gamification will be in the future." He also noted the potential to make a significant difference for customers, saying: "There’s huge potential to help make a real difference for our customers’ lives and we’re right out in front building all the parts we need to innovate in a massive way." Sharon Doherty, chief people and places officer at Lloyds Banking Group, added: "We’re creating modern, inclusive, sustainable and fun workplaces where our people love to work." She also mentioned the improvements made to their offices across the UK, stating: "We’ve already made significant improvements to our offices across the UK, with more to come." "And our redesigned home in the centre of Edinburgh will help us connect, collaborate and spark the creativity to deliver great outcomes for our customers." Graeme Bone, group managing director at Drum Property Group, commented on the £200m redevelopment of Port Hamilton as "The £200m redevelopment of Port Hamilton presents an exceptional opportunity for Lloyds Banking Group to upgrade and enhance one of Edinburgh’s landmark buildings and deliver an exceptional working environment for Lloyds colleagues in an unrivalled location."

ECB and Fed rate decisions to underscore economic divergence between Europe and the US

Markets are gearing up for a busy week as they anticipate central bank announcements, with interest rate decisions due from both the US Federal Reserve and the European Central Bank (ECB). The upcoming decisions are set to underscore the divergent economic perspectives between the two regions, with the ECB likely to slash borrowing costs for the fifth consecutive time, while the Fed is expected to maintain rates, as reported by City AM. In December, the Federal Open Market Committee (FOMC) trimmed rates by 25 basis points and indicated that only two rate cuts would occur in 2025. However, investor expectations for further rate reductions in the US have moderated in recent weeks, despite ongoing progress on inflation. This shift in sentiment is attributed to concerns about the inflationary effects of Donald Trump's economic policies and the persistent robustness of the US economy. "We expect the strength of the economy and uncertainty over immigration and trade policy to prompt the Fed to pause its easing cycle," commented Bradley Saunders, North America economist at Capital Economics. Data released the day after the Fed's meeting is projected to reveal that the US economy expanded at an annualised rate of 2.7 percent in the fourth quarter. Considering these factors, most traders are now predicting just one rate cut, with some even speculating that the Fed might increase rates again in the near future. Chair Jerome Powell is expected to face numerous questions about the outlook for rates in his upcoming press conference, especially considering President Trump's insistence on lower interest rates. BNP Paribas analysts predict that Powell will also be questioned about the "tail risk of rate hikes." They anticipate a cautious response from him, suggesting rate hikes are less likely but could be considered if necessary to ensure a soft landing for inflation and growth. This contrasts sharply with the economic outlook for the ECB. ING's global head of macro, Carsten Brzeski, believes a rate cut is a "no-brainer" given the weak growth outlook. Despite the ECB cutting rates four times in 2024, bringing the benchmark interest rate down to three per cent, Brzeski argues this is still too high. He stated: "The deposit interest rate is still restrictive and too restrictive for the eurozone economy’s current weak state," Economic growth figures due on Thursday are predicted to show a mere 0.1 per cent increase in the fourth quarter, significantly weaker than the US. The IMF's latest forecasts suggest that the US will grow by 1.9 per cent next year, while the euro area will only grow by 1.0 per cent. Given such a weak growth outlook, traders are anticipating four or five rate cuts from the ECB this year, despite some signs of building inflationary pressures.