UK Industry Fast Facts

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

Agriculture, Forestry & Fishing

• The government released the 2025 Farming Equipment and Technology Fund (FETF), allocating £46 million to assist farmers in investing in modern equipment to boost farming productivity and support sustainability. This funding provides grants that cover between 40% and 50% of equipment costs, ranging from £1,000 to £25,000 per category of funding. The categories include improving productivity, enhancing slurry management and boosting animal health and welfare.

• On 28 May 2025, DEFRA announced a £30 million uplift in payment rates under the Higher Level Stewardship scheme. This boost will enhance payments across 157 options, rewarding farmers who are actively contributing to environmental conservation in 2025. The focus is particularly on upland areas and other sensitive regions where farmers play a crucial role in protecting rare species, restoring habitats and maintaining traditional countryside features.

• The UK agriculture sector faces mounting challenges due to prolonged drought conditions, policy shifts and financial pressures. Spring 2025 has been the driest in nearly 70 years, leading to crop failures and early irrigation efforts, particularly affecting wheat yields in regions like East Anglia and Yorkshire. Compounding these issues, the government's abrupt halt of the Sustainable Farming Incentive scheme left approximately 3,000 farmers without expected subsidies. Additionally, proposed inheritance tax reforms have sparked widespread protests, with farmers concerned about the viability of passing farms to the next generation. These factors collectively threaten the stability and sustainability of UK farming.

• With confidence in the agricultural sector at an all-time low, the National Trust and the Royal Society for the Protection of Birds (RSPB) have partnered with farmers to caution the government against reducing the agricultural budget in the upcoming spending review in June 2025. Reports suggest that the Treasury is considering scaling back support for the post-Brexit Environmental Land Management (ELM) schemes. The National Farmers Union (NFU) asserts that if the government doesn’t address the funding gap, it should reconsider its environmental targets.

• According to DEFRA’s farmer income figures, released in June 2025, overall UK farm income increased from £6.1 billion to £7.7 billion between 2023 and 2024. However, income from major arable crops declined by £1.2 million due to the third-worst harvest on record in 2024, which was affected by wet weather and ongoing declines in cereal and oilseed prices following their 2022 peaks. Farmers face the risk of another poor harvest year due to record-high spring temperatures and the driest conditions in decades.

• The May 2025 UK-US trade agreement introduces significant changes affecting British agriculture. Notably, it removes a 19% tariff on 1.4 billion litres of US ethanol, potentially undermining the UK's bioethanol industry and threatening hundreds of jobs in northeast England and Yorkshire. This move may disrupt local markets for non-bread-quality wheat, forcing farmers to seek less profitable export options. Additionally, the deal allows 13,000 metric tonnes of US hormone-free beef into the UK tariff-free, raising concerns among British farmers about greater competition from US producers with lower costs and differing regulatory standards. While the agreement aims to bolster trade, these provisions could challenge the sustainability and competitiveness of the UK farming sectors.

• The National Audit Office (NAO) warns that the UK may struggle to handle major animal disease outbreaks, like bird flu and foot-and-mouth disease, due to a lack of long-term strategy and significant funding gaps. Following the introduction of the post-Brexit border regime, known as the border target operating model, only about 5% of live animals receive physical checks, well below the 100% target. This shortcoming increases the risk to the UK's biosecurity amid rising threats of animal disease outbreaks.

Mining

• The Office for National Statistics reports that the mining and quarrying sector output declined by 1.2% in March 2025. Output from the sector dipped by 0.5% in the three months to March 2025.
• World Bank Commodities Price Data released in June 2025 shows that Brent crude oil and WTI crude oil prices contracted further month-on-month in May 2025 amid OPEC+ production hikes despite slowing fossil fuels demand due to tariffs. Meanwhile, in May 2025, most metals and minerals (aluminium, copper, lead, nickel and zinc) posted a climb, while others (iron ore and tin) dropped slightly. This follows on from a month-on-month price decline of all metals in April 2025 amid economic uncertainty. Precious metals have continued to climb month-on-month, particularly gold, amid heightened global uncertainty and US tariff concerns.
• The UK’s offshore energy industry association, Offshore Energies UK, has called for the government to remove the oil and gas windfall tax and replace it with a long-term mechanism, which could boost investment and strengthen the UK’s energy sector. The association states that recent ONS data shows profit for those investing in the oil and gas sector has turned negative.
• Published in June 2025, a study by Robert Gordon University titled ‘Striking the Balance: Building a Sustainable UK Offshore Energy Workforce’ states that the oil and gas workforce declined by about 5,000 jobs between 2023 and 2024, from 120,000 to 115,000 and if the current trend continues, this figure could plunge to between 57,000 and 71,000 by the early 2030s. Meanwhile, the workforce in the renewables segment will thrive and could climb from 39,000 to between 84,000 and 153,000 by 2035.
• Norway’s energy minister has urged the UK not to give up on North Sea oil, as it will leave the country dependent on imports, reports The Telegraph. The UK has banned all new oil and gas drilling in the North Sea amid the pledge of net zero by 2050.
• North Sea oil and gas company EnQuest has slammed the current windfall tax regime, but has stated a willingness to make a big acquisition or agree to a merger deal in the region.
• The UK’s largest oil and gas producer, Harbour Energy, announced plans in May 2025 to cut 250 jobs. This has prompted Unite, the trade union, to slam the unfavourable government policy in the North Sea. Harbour Energy had previously axed 350 onshore jobs in 2023.
• At the start of June 2025, Unite the Union warned that the Scottish oil and gas industry is facing hundreds of job losses at Grangemouth and Mossmorran.
• Metal investment company Cobalt Holdings has pulled out of its move to list on the London Stock Exchange, dealing a further blow to the weak London IPO market, as reported by the Financial Times.
• Equinor has signed a long-term gas sales agreement of 55 TWh of natural gas per year for a decade starting October 2025, with a contract value of around £20 billion (at current prices), in a bid to strengthen the UK’s energy security.

Manufacturing

• The Purchasing Managers’ Index (PMI) stood at 46.4 in May 2025, marking the eighth consecutive month of contraction, influenced by economic uncertainties, turbulent trading conditions and rising operational costs. Client confidence remains low due to uncertainty around tariffs, which, combined with reduced wage-related tax burdens, resulted in decreased levels of output, new orders, exports and employment. Although input price inflation has slowed to its lowest in five months, overall business activity remains subdued.

• The output of the UK's energy-intensive industries has shrunk by a third since 2021, reaching a 35-year low, highlighting their vulnerability to fluctuating electricity prices, which have inflated production costs. According to the ONS, the production levels for paper, petrochemicals, basic metals and inorganic products like cement and ceramics in 2024 were the lowest recorded since the 1990s. These challenges in the manufacturing sector, exacerbated by high energy costs and intensifying competition from the US and China, are likely to be a focal point in the government's industrial strategy to be unveiled in June 2025.

• The UK-US Economic Prosperity Deal, announced on 8 May 2025, reduces tariffs on British manufacturing exports, notably lowering car tariffs from 27.5% to 10% for up to 100,000 vehicles annually and eliminating duties on steel and aluminium. These changes have led to immediate positive market reactions, with Aston Martin and Rolls-Royce experiencing notable share price increases. Industry leaders, including the Society of Motor Manufacturers and Traders, have welcomed the tariff reductions, highlighting the relief they bring to exporters and the potential to safeguard jobs. However, while the agreement offers substantial benefits to key manufacturing sectors, it maintains a 10% baseline tariff on other UK exports, indicating that broader trade challenges persist.

• Following the UK-US Economic Prosperity Deal, the UK's only two bioethanol production plants, including the Vivergo Fuels site at Saltend, are at risk of closure due to the UK's agreement to eliminate tariffs on US ethanol imports. Trade associations caution that closing these plants could lead to CO2 shortages and send negative signals to investors regarding the development of the sustainable aviation fuel industry. The Associated British Foods trade association has urged the government to intervene with support packages for the industry to prevent these potential issues.

• Toyota has announced plans to ramp up car production in the UK in 2026 to enhance flexibility following the disruptions caused by US tariffs. The company intends to shift some production of its GR Corolla high-performance hatchback from Japan to its Burnaston plant in Derbyshire. This move will help Toyota maintain its manufacturing presence in the UK as the government prepares to unveil its new industrial strategy.

• 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 May 2025, electric car sales saw a 25.8% lift annually, with 32,738 new battery electric vehicles (BEVs) registered, representing a 21.8% market share, as reported by the Society of Motor Manufacturers and Traders.

• The government hasn’t yet made a decision regarding the long-term future of British Steel. According to the Secretary of State for Business and Trade, the objective isn’t to nationalise British Steel, despite the Secretary having powers to issue directions or take control of steel operations in England at risk of closure. This authority allowed the government to assume control of British Steel’s operations temporarily. The removal of the 25% tariff on UK steel exports, following UK-US trade negotiations, has provided relief for British Steel’s production and helped safeguard jobs.

• The government has committed £14.2 billion to support the construction of the Sizewell C nuclear power station in Suffolk. This investment, announced ahead of the government's spending review in June 2025, is expected to create 10,000 direct jobs and generate enough electricity to power six million homes.

Utilities

• The energy price cap set by Ofgem will climb by 6.4% for the period from April to June 2025, raising the annual cost to £1,849 for a typical household. While this hike will intensify the financial strain on households, four million households have already switched to fixed tariffs, shielding them from the change in the price cap.  

• Ofgem has announced a new price cap for the period from July to September 2025, reducing it by 7%. This aligns with UK Prime Minister Keir Starmer’s initiative to address the high cost of living. The average household will see its annual energy bill decrease from the current £1,849 to £1,720. This reduction follows a decline in wholesale gas prices and aims to provide financial relief to households.Faced with £20 billion in debt and urgent infrastructure needs, Thames Water has chosen the US investment firm KKR as its preferred bidder to take control of its operations and help avoid renationalisation. KKR is anticipated to invest £4 billion for a stake in the company by the end of June. The severity of the company's financial crisis was underscored by the sudden resignation of Finance Director Alastair Cochran, with Steve Buck stepping in as the newly appointed Chief Financial Officer.

• Thames Water is one of six water companies facing a ban on executives receiving bonuses due to poor performance. This decision is part of Ofwat's initiative to address unfair compensation practices within the industry. Thames Water is under additional scrutiny after it emerged that certain executives received substantial retention payments for securing an emergency £3 billion loan earlier this year.

• Centrica plc, one of the UK's largest energy groups, has secured a £20 billion agreement to purchase 5 billion cubic meters of gas annually from Norway's state-owned Equinor. This agreement will commence in October 2025 and continue until 2035, bolstering the UK's energy supply and price stability. Additionally, the contract includes a provision for transitioning from natural gas to hydrogen sales in the future, supporting the growth of the UK's hydrogen economy.

• 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.

• According to the Financial Times, Ministers are considering offering energy bill discounts to UK homeowners who install heat pumps. This initiative aims to encourage more household installations as part of the country's efforts to reduce carbon emissions.

• Thinktank Common Wealth has called for the government to nationalise Britain’s gas power stations to ensure energy security and prevent sky-high fees by private gas-fired stations.

Construction

• The latest S&P Global release reveals that the UK Construction PMI rose to 47.9 in May 2025, up from 46.6 in April, signalling the slowest decline in output levels since January. House building was the weakest performing segment in May due to ongoing weak demand conditions. Despite the sector's continued downturn, business confidence reached its highest level since December, suggesting some optimism for future projects. However, employment in the sector remained weak, with an acceleration in job losses. Although cost pressures stayed high, they eased compared to the peak in March.

• According to a CoStar analysis, the amount of office space under construction in the UK dropped to approximately 23 million square feet in Q1 2025, marking its lowest level since early 2015. This decline is primarily attributed to ongoing economic uncertainty and persistently high costs, which have dampened investor confidence.

• The construction sector is grappling with a significant shortage of both bricks and labour. The Home Builders Federation estimates that 240,000 new recruits are needed to meet upcoming housing commitments, with a particularly dire need for 20,000 bricklayers. This scarcity threatens to stall housebuilding efforts in the UK. In response, major housebuilders in England are increasingly turning to timber as an alternative to bricks to address these challenges, as reported by the Financial Times.

• The government faces an urgent challenge in meeting its ambitious goal of constructing 1.5 million homes during its term. Achieving this target necessitates a more than 50% increase in annual planning permissions in England. In response, the government introduced a new Planning and Infrastructure Bill to accelerate the process of housebuilding and the development of essential infrastructure. Also, in May 2025, the government announced a streamlining of planning regulations concerning land use, regulatory processes and financial frameworks. This initiative is supported by increased funding aimed at assisting SME housebuilders, with the goal of accelerating housing construction and achieving the established ambitious targets.

• The Department for Education has introduced the Construction Framework 25 (CF25), a new initiative valued at up to £15.4 billion. This framework aims to support the construction and refurbishment of educational facilities across England. Beginning in January 2026 and lasting six years, CF25 will encompass new builds and renovation projects for schools, colleges and universities.

• NHS Scotland has extended its construction framework, Frameworks Scotland 3. Initially awarded in 2020 with a value of £650 million and set to conclude in November 2025, the framework will now continue until November 2027. This extension aims to address ongoing uncertainties in public capital funding and will support the delivery of future projects.

• As revealed by ONS data, total construction output is estimated to have shown no growth in Q1 2025 compared to Q4 2024, whereby over the period, new work grew by 0.9%, while repair and maintenance fell by 1.2%. Monthly output is estimated to have increased by 0.5% in March 2025, following a 0.2% hike in February 2025.

• Laing O'Rourke and BAM Nuttall have been chosen as Tier One contractors for the Rolls-Royce Small Modular Reactors (SMR) joint venture, tasked with delivering the UK's first fleet of small modular nuclear reactors. This initiative is spearheaded by the publicly-owned Great British Energy - Nuclear. Backed by more than £2.5 billion in public investment, the project is expected to create up to 3,000 jobs, as announced by the government on 10 June 2025.

Wholesale Trade

• According to the Office for National Statistics, output in the wholesale and retail trade; repair of motor vehicles and motorcycles climbed by 0.9% in March 2025, marking the largest positive contribution in the services sector. The wholesale trade, except for the motor vehicles and motorcycles industry, clocked in the largest positive growth, at 1.5%.

• Co-op Wholesale has reported a 5.5% drop in revenue in the 12 months to 4 January 2025 to £1.4 billion, with a loss of £1 million compared to a profit of £14 million in the previous year. The company has invested in lowering the prices of its brand lines for wholesale customers, contributing to the drop in sales. Recently, Co-op Wholesale secured a multi-year agreement with UK motorway service operator Roadchef to expand its presence in the segment. The move aligns with the wholesale operator’s strategy to expand its presence in the B2B sector.

• According to the Fresho UK Fruit and Veg Report 2025 by the wholesale order management platform, the “UK’s fruit and veg wholesale industry has remained resilient over the past three years, despite ongoing rising business costs”. It reveals that the average number of lines per order has dropped consistently from 10.31 lines in 2021 to 9.69 lines in 2024, suggesting customers are streamlining purchases amid cost pressures. Fresho also highlighted an emerging trend of climbing orders containing prepared items (rising by 29.9% in 2024) as customers grapple with labour shortages and rising wages.

• Leading Scottish wholesaler United Wholesale Scotland has expanded by acquiring London-based Time Wholesale Services, making it its first cash and carry in England and fourth overall. 
  The Grocer reports that wholesale platform Platter, which is a B2B platform allowing suppliers to manage buyers and oversee the product journey, has raised £350,000 in a pre-seed funding round.

Retail Trade

• ONS data shows the retail sector has lost more than 364,000 jobs since 2015. Full-time positions have fallen by 117,000 since 2015, with part-time roles dropping by 246,000 over the same period. The cost of employing people for full-time entry-level roles has risen by 10%, while the cost for part-time roles has increased by 13%, BRC reports. The BRC has warned that a further 160,000 roles could be at risk over the next three years if the Government fails to act.

• Consumers are pumping the brakes on discretionary purchases. In May, UK retail growth slowed to its weakest so far in 2025. Total sales rose just 1% year on year, buoyed mainly by food (+3.6%), while non‑food dropped 1.1%. In-store non‑food fell 0.9%, online slumped 1.5% and overall online’s share stayed flat at 35.9%, the BRC, KPMG and IGD report. Retailers are under pressure, facing an extra £5 billion hit from rising National Insurance and labour costs, with a further £2 billion expected from upcoming packaging taxes. Companies are navigating this by reducing in-store non-food markdowns and cutting promotions in some areas, while banking on upbeat trends in food and drink, travel-related goods and gaming to stabilise revenue.

• In early May 2025, UK shop price deflation remained at – 0.1% year‑on‑year, yet food inflation climbed to 2.8% (up from 2.6%), driven by fresh food (+2.4%) – the sharpest increase in a year. Non-food deflation is easing too, as retailers reduce heavy discounting.

• Budget and high-street retailers aren’t the only ones using promotions and loyalty schemes to attract customers. Fortnum & Mason has launched its first annual membership programme, “Friends of Fortnum’s”, priced at £100. Members receive curated gifts, complimentary next-day UK delivery and priority access to exclusive events. This move signals a shift in luxury retail towards paid loyalty schemes that prioritise experience over discounts. It reflects a broader trend in the sector, with retailers seeking to build emotional connections, drive repeat spend and offset rising operational costs. The initiative also raises customer expectations for speed, service and exclusivity, prompting other premium and mainstream retailers to reassess their own loyalty and fulfilment strategies.

• Food inflation in the UK has climbed for the fourth month running, reaching 2.8% in May, with fresh food prices up 2.4% year-on-year, the BRC reports. Beef is a key culprit, as wholesale prices surge due to supply issues and global demand. Retailers are also grappling with a £5 billion hit from higher National Insurance and wage costs, plus a looming £2 billion packaging tax. While non-food prices remain in deflation, the pace is slowing and retailers warn that rising statutory costs could push prices higher still. Shoppers may need to brace for a pricier summer basket.

• Oxford Street is back in business. Vacancy rates have plummeted to just 0.5% - the lowest since pre-pandemic days, Savills reports - thanks to a surge of international retailers and big-name openings like IKEA and Nike’s RunTown pop-up. With £118 million poured into store revamps, prime rents are climbing, up 3.3% last quarter alone. This revival signals renewed confidence in UK retail, especially for flagship locations. But with limited space and rising rents, smaller brands may struggle to keep up.

• President Trump has delayed a hefty 50% tariff on EU goods until 9 July 2025, following a cordial chat with European Commission President Ursula von der Leyen. While this buys time for negotiations, UK retailers remain on edge. Brands like Nike and Shein are already upping prices, anticipating increased costs. For UK retailers, this means potential price rises and supply disruptions, especially for those sourcing from or selling to the US. With the clock ticking, the sector braces for possible turbulence ahead.

Transportation & Warehousing

• Transport for London has put forward a proposal to increase the congestion charge by 20%, raising it from the current £15 per day to £18 per day, effective from 2 January 2026. This proposal is currently open for public consultation. TfL also plans to remove the 90% discount currently available to residents living within the congestion charge zone, unless they own a pure electric vehicle. These measures are expected to generate an additional £30 million in revenue for TfL in 2026, helping to restore its financial stability.

• 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 Sustainable Aviation Fuel (SAF) Mandate became law in 2025, 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

• On 25 May 2025, South Western Railway became the first train company to be nationalised under the Labour government, which aims to bring nearly all rail services in England back under public ownership by 2027. During the launch of SWR's renationalisation, Transport Secretary Heidi Alexander stated that she could not guarantee that nationalisation would lead to lower fares.

• Chancellor Rachel Reeves has announced a significant investment in transport infrastructure, focusing on the Midlands, the North and the West Country, in anticipation of the government's upcoming spending review. This ambitious plan includes a £2.5 billion investment to expand Greater Manchester's tram network, extending it to Stockport and adding new stops in Bury, Manchester and Oldham. The West Midlands will receive £2.4 billion to enhance tram services, extending them from Birmingham city centre to the newly developed sports quarters. Additionally, £2.1 billion will be allocated to initiate construction of the West Yorkshire Mass Transit programme, aimed to begin by 2028.

• The government has announced plans to simplify the installation process for EV charging points by eliminating the need for drivers to submit planning applications. This change is expected to save EV drivers up to £1,100 annually and reduce barriers to increasing the number of EVs on UK roads.

• The Department for Transport warns that black cabs could disappear from London within 20 years unless action is taken. With the Plug-in Taxi Grant being reduced from £6,000 to £4,000 per vehicle for 2025-26, suggested measures include boosting loans for new electric vehicles and reforming the Knowledge test to lower entry barriers.

• Heathrow Airport’s CEO, Thomas Woldbye, has announced the airport’s largest private investment programme to date, which includes the development of a third runway, with plans to be submitted to the government by Summer 2025. The investment aims to enhance existing infrastructure and support the construction of the new runway, ultimately boosting the UK economy. Airport officials are confident that by upgrading current facilities, they can accommodate up to 100 million passengers annually.

• The government has approved the expansion project for London Luton Airport, but the decision regarding Gatwick Airport's second runway is still pending. Although the Transport Secretary has indicated a ‘minded to approve’ stance, further engagement with Gatwick is required to address specific concerns. These include setting stronger targets for public transport access and expediting the implementation of a noise mitigation scheme. The final decision on Gatwick's second runway is anticipated by October 2025.

• On 10 June 2025, the government announced that self-driving cars, operated without a safety driver, could be available for public booking through an app starting in Spring 2026 as part of new trials. This initiative is expected to attract significant investment to the UK, potentially creating 38,000 jobs and contributing £42 billion to the UK economy by 2035.

Accommodation & Food Services

• ONS data reports that output in accommodation and food service activities climbed by 0.04 percentage points in March 2025. Output in the food and beverage service activities expanded by 1.3% in the month. Meanwhile, accommodation activities output contracted by 2.2% in the three months to March 2025, the largest negative contribution over the period.
• A May 2025 survey by hospitality associations, including UKHospitality, The British Institute of Innkeeping, the British Beer & Pub Association and Hospitality Ulster, has found that about a third of hospitality venues were operating at a loss amid the tax hikes (minimum wage and NICs) from April. The survey found that about 60% have been forced to cut jobs, while 63% lowered staffing hours to reduce costs. Further, over half of the members surveyed cancelled investment and 76% were forced to hike prices.
• As part of the government’s Plan for Change, the Department for Energy Security and Net Zero is trialling an initiative to provide over 600 SMEs in the hospitality sector with free energy and carbon reduction assessments, saving the hospitality sector £3 million on bills.
• US fried chicken chain Popeyes, which has over 80 UK restaurants, has secured a £43 million loan from Barclays Corporate Banking to accelerate its expansion and open 45 more stores across the UK this year.
• Hotel chain Premier Inn’s owner, Whitbread, announced a 1% dip in revenue to £2.9 billion in 2023-24 and a 2% drop in revenue per available room in the UK. Total revenue decline was driven by a fall in food and beverage sales, while UK accommodation sales remaining flat as lower occupancy rates were offset by room openings. It also reported a 14% contraction in adjusted pre-tax profit to £483 million, though it also announced a £250 million buyback. Whitbread reported weaker business and leisure bookings in the UK, particularly in the capital.
• BWH Hotels has recently acquired seven independent hotels, as part of its target to add 100 hotels over the next five years and reach 20,000 rooms across the UK by 2029.
• Spanish-based Libere Hospitality Group has entered the UK market by opening a site in Paddington, London. The hospitality group has a strategy of expanding into high-demand UK and European cities.
• UK staycations stand to receive a boost as the government plans to cut red tape as part of its Plan for Change, making it easier for businesses to offer package deals, giving consumers better value and supporting growth across the tourism sector. Potential measures include removing barriers preventing small businesses, including B&Bs and restaurants, from working together to create tailored UK holiday experiences. It would make it easier for businesses (like hotels, attractions and restaurants) to bundle offers together, giving travellers “more affordable, flexible and convenient options for their staycations”.

Information

• ONS data reports that output in the information and communication subsector climbed by 1.2% in March 2025, making it the second-largest positive contributor to growth in the services sector. This was mainly driven by the computer programming, consultancy and related activities subsector (up 3.7%) and the motion picture, video and TV programme production, sound recording and music publishing activities industry (up 5.3%). The sector recorded a 1.9% rise in output in the three months to March 2025.
• Vodafone has completed its merger with Three UK, creating a £16.5 billion company named VodafoneThree, which is the largest mobile network in the UK with over 27 million subscribers. This is the biggest shake-up in the UK telecoms sector recently, meaning there are now only three main mobile network operators. Vodafone has committed to investing over £1 billion in expanding its network coverage in the next year, with the new company to invest over £11 billion in its coverage over the next 10 years. According to The Guardian, Vodafone owns 51% of the new company, while CK Hutchison (Three UK’s parent) owns 49%.
• BT-owned Openreach is warning to block TalkTalk from putting new customers on its broadband network, with the latter missing “several monthly payment deadlines” to its biggest supplier amid cash flow issues, as reported by the Financial Times.
• TalkTalk has reported a drop in broadband customers to 3.2 million in February 2025, from 3.6 million in the prior year, amid intensifying competition from alternative providers. Research by Enders Analysis reveals TalkTalk’s share of the UK broadband market has dipped to 11% from 14% in 2022, while altnets have expanded their market presence to 7% (up from 3% in 2022). TalkTalk has also announced it plans to cut more jobs this year, following the 350 jobs slashed last year (20% of the total workforce), as reported by The Financial Times.
• Altnet Community Fibre, which is backed by private equity firm Warburg Pincus and serves 1.3 million homes in London, has posted its first profit, at £8 million in 2024, though it still recorded a large pre-tax loss of £118.5 million amid significant network investments. In terms of a customer base, Community Fibre ranks third among altnets with 336,000 in 2024, only behind CityFibre and Hypertonic.
• Mobile operator Three has launched the UK’s first urban Open RAN network in Glasgow, with 5G speeds topping 520 Mbps, reports telecoms.com.  
• Nvidia’s chief, Jensen Huang, has stated that the UK lacks its own established digital infrastructure, despite Prime Minister Keir Starmer committing another £1 billion for AI.

Finance & Insurance

• The UK 100% mortgage is back, for renters with a proven history of paying on time. Two years ago, Skipton Building Society launched a 100% deal, called Track Record, aimed at people who are now renting, or were until very recently. Applicants must show proof of having paid rent for at least 12 months in a row on a UK property (with no arrears) in the last 18 months and haven’t owned a UK property in the last three years. The maximum amount that can be borrowed is 4.49 times the applicant’s annual income (for single and joint applicants), rising to 4.75 times if that income is more than £50,000.

• UK insurance distribution M&A activity slowed markedly in May, with just seven transactions announced, leaving 2025 deal volumes 30% below the same period in 2024 at 42 YTD, MarshBerry reports. While April’s brief uptick – driven by the tax-year end and changes to Business Asset Disposal Relief – failed to continue, smaller deals dominate: 69% involve targets valued under £5 million, compared to a long-term average of 59%. Supply constraints, rather than waning demand, are cited as the primary cause, with fewer privately owned brokers available and limited new-entrant scale-up. Despite this, large transactions persist, in May the fourth deal above £100 million, including JMG Group’s investment from GTCR and Synova, occurred and private equity continued to lead in deal value, even as its share of deal count fell to its lowest since before 2016.

• On 19 May 2025, HM Treasury published its response to the Buy-Now, Pay-Later consultation and launched Phase 1 of its Consumer Credit Act reform consultation. The government will bring third-party BNPL lenders into the regulated activity of credit broking while largely exempting merchants, with draft legislation due before Parliament and new rules expected mid-2026. Consumers stand to gain stronger, more consistent protections as BNPL providers will need to adhere to regulated credit-broking rules, aligning their transparency, affordability checks and redress mechanisms with traditional lenders. The repeal of “small agreements” exemptions means that even lower-value credit products must meet FCA standards, reducing the risk of unfair terms and promoting clearer disclosures. For credit-card issuers, the reforms level the competitive playing field by closing regulatory gaps that favoured unregulated BNPL schemes, but they also bring new compliance costs and reporting requirements. Issuers may face pressure to enhance their own digital instalment offerings and reassess pricing and product design to retain market share.

• UK mortgage rates are rising again. The average two-year fixed mortgage rate now stands at 4.90%, with five-year deals averaging 5.24%. This uptick follows an unexpected inflation increase to 3.5% in April, leading lenders like Halifax, Nationwide, NatWest and Santander to raise rates, particularly affecting borrowers with substantial equity. Approximately 500,000 homeowners with five-year fixed-rate mortgages from 2020 face significant payment hikes as their deals expire, potentially increasing monthly payments by £510 if they revert to standard variable rates averaging 7.13%. This scenario may lead to higher default risks, impacting insurers and financial institutions managing mortgage-backed assets.

• Revolut is developing a rewards-based credit card for UK customers, building upon its existing RevPoints loyalty programme. The planned credit card will be tailored to Revolut's various subscription tiers, allowing users to earn points on spending, which can be redeemed for travel perks, gift cards and airline miles. This move positions Revolut to compete with established companies like American Express in the UK's rewards credit card market. For the UK's insurance and finance sector, Revolut's entry could intensify competition, prompting traditional banks and insurers to reassess their credit card offerings and loyalty schemes. Additionally, as Revolut expands its financial services, including plans for mortgages and private banking, it may influence consumer expectations and drive innovation across the sector.

Real Estate and Rental and Leasing

• According to Nationwide, annual house price growth increased by 3.5% in May 2025 compared with April 2024. Prices climbed by 0.5% month on month and the average house price stood at £273,427. Despite economic uncertainty, Nationwide reports that underlying conditions for potential home buyers in the UK remain supportive, with unemployment remaining low and earnings rising. The report highlights that house prices in rural areas have hiked by 23% over the last five years, while prices in urban areas climbed by 18%.

• According to Zoopla, improved mortgage affordability and high supply mean the UK housing market is recording its most active May since the pandemic boom in 2021. However, despite strong buyer interest, sellers are forced to settle for lower prices, with the average home being sold for £16,000 below the asking price.

• Halifax reports that house prices contracted by 0.4% in May 2025 following the changes to the stamp duty and due to prolonged economic uncertainty, though buyer confidence remains supported by lower mortgage rates and steady wage growth.

• One of the largest London landlords, British Land, reveals there has been growing demand for second-hand offices in prime locations due to a shortage of new properties being constructed, more people returning to the office and sky-high rents. According to CoStar and reported by the Financial Times, the amount of office space under construction in the UK has dropped to its lowest level in a decade (to 23 million square feet in Q1 2025) due to prolonged economic uncertainty and high costs hurting builder confidence.

• Canary Wharf Group’s office buildings lost £180 million in value in 2024 to £4.2 billion, following the £954 million lost in 2023, highlighting the troubles in the commercial office market, as revealed by The Financial Times. It reports that Canary Wharf has seen prices dip by more than other central locations in the capital like the City of London.

• Norges Bank Investment Management, Norway’s oil fund, has reached a £570 million deal to acquire a 25% non-controlling stake in the £2.7 billion Covent Garden estate from landlord Shaftesbury Capital, which will continue to manage the estate.

• US asset manager State Street is becoming the latest firm moving away from Canary Wharf as it has made an agreement to buy an office block in the City of London for £333 million.

• According to CBRE data from June 2025, capital values for UK commercial real estate hiked and rental values both climbed by 0.3% in May 2025, with total returns at 0.7%. The industrial sector recorded the highest month-on-month returns for May, at 0.8%, while office and retail total returns were both at 0.6%.

• Japanese firm Daibiru has acquired a prime City of London office for £169 million from Barings, marking its entry into the UK property market.

Professional, Scientific & Technical Services

• ONS data reports that output in professional, scientific and technical services climbed by 0.04 percentage points in March 2025.
• KF Littlejohn has overtaken BDO in the latest AIM Advisers Rankings Guide for the first time since 2017, with 85 AIM-listed clients against BDO’s 84 clients.
• KPMG’s report from the end of 2024 titled The move to mandatory reporting has found that 95% of the world’s biggest corporations are now publishing carbon targets, up from 80% in 2022.
• An audit monitoring report by ICAEW has found that 10% of reviewed audits were in need of significant improvement, a steady rate from the previous year. In 2024, 67% of audits reviewed were rated good or generally acceptable, a decline from 71% in 2023.
• In May 2025, The Times reported that accounting firm Xeinadin could be subject to a private equity sale of over £800 million. The firm has been on a rapid expansion spree in recent years, thanks to private equity backing.
• From 1 September 2025, accountancy firms face a new regulation called Failure to Prevent Fraud, which comes under the Economic Crime and Corporate Transparency Act. It makes organisations criminally liable if an employee or agent commits fraud for the company’s benefit, unless it proves it had reasonable fraud prevention procedures in place at the time.
• Despite the free-trade deal agreed between India and the UK in May 2025, it fails to open up the Indian market for business to UK law firms, leading to the Law Society expressing its disappointment.
• The Legal Aid Agency (LAA), which oversees billions of pounds of legal funding and has access to sensitive client information, suffered a cyber security incident in May 2025, with hacked data potentially including contact details and addresses, personal and financial information dating back to 2010. This led to the LAA suspending its online service.
• Increased use of AI systems by lawyers has prompted the High Court to warn professionals to take action to prevent the use of AI following fake case-law citations, reported by The Guardian.
• Challenger consultancy firm Elixirr has posted a 30% global revenue hike in 2024 to £111.3 million.
• The Financial Times reports that, following heavy industry lobbying by the Committees of Advertising Practice and the Advertising Standards Authority, the UK government is delaying the implementation of the junk food advertising ban to change guidance to allow pure brand marketing. The ban is aimed at unhealthy food advertising before 9pm in an effort to tackle child obesity.

Education

• The new HESA university spin‑out register – a company created to commercialise research and IP – reveals a decline in UK spin‑out formation, with just 160 companies established during 2023-24, down from 201 at the pandemic‑era peak in 2020-21. A report by the University of Cambridge’s Commercialisation and Innovation (UCI) Policy Evidence Unit finds early‑stage venture capital investment has fallen back to pre‑COVID levels, despite spin‑outs raising over £2.8 billion – about 17% of all VC funding in the UK. The research highlights that spin‑out activity is still highly concentrated, with 20 universities accounting for over 70%, while the top six generate nearly 40%, but notes an encouraging shift as more research‑intensive institutions outside the “Golden Triangle” play a growing role.
• The UK government’s plans to withdraw public funding for Level 7 apprenticeships for individuals aged 22 and over will impact employers and training providers and make it harder for people to enter certain professions, experts have said. The change is part of a broader reform package aimed at “rebalancing” the apprenticeship budget towards lower-level training in an attempt to get more young apprentices studying. Level 7 apprenticeships are equivalent to a master’s degree, representing the highest level of apprenticeship currently available. The funding cut is expected to have a significant impact on sectors that rely heavily on Level 7 apprenticeships, like the NHS, education and local government. The exemption for those aged 21 and under will leave so few students on these courses eligible for funding that many will become unviable at a time when Skills England’s forecasts show we need more high-level skills in the economy. We recognise the tough fiscal choices the government faces, but supporting early careers need not come at the expense of upskilling and retraining the existing workforce.
• The figures from the census of all schools in England show that there were 11,000 fewer pupils at private schools in England this January compared to the same time last year, after the government removed VAT exemption for private schools on 1 January 2025. The Independent Schools Council (ISC), which represents more than 1,400 private schools, previously said its annual census showed average school fees were 22.6% higher in January 2025 than they had been in January 2024. Overall, 582,477 pupils in England attended private schools when the census data was collected in January this year, down from 593,486 the year before – a drop of 1.9% (or 11,009 pupils).
• The UK government is investing £9.5 million to expand the PINS (Partnership for Inclusion of Neurodiversity in Schools) programme to 1,200 additional mainstream primary schools, supporting around 300,000 neurodivergent pupils. The initiative aims to improve training for teachers, boost parental engagement and create more inclusive learning environments. Early results show improved attendance, behaviour and pupil wellbeing. This move signals a shift towards early intervention and greater inclusivity in mainstream education. However, proposed changes to limit access to Education, Health and Care Plans (EHCPs) have raised concerns that some children could lose essential legal support. While PINS is a positive step, it may not fully replace the tailored provisions EHCPs currently guarantee. The expansion could ease pressure on specialist schools, but its success depends on effective delivery and ongoing support for both staff and pupils.
• A recent survey by the Child Poverty Action Group reveals that 16% of UK secondary pupils have missed school due to a lack of essentials like uniforms, meals, or transport. Among students eligible for free school meals, this figure rises to over 25%. Nearly half of those absent cited not having the correct uniform or kit, while others pointed to unaffordable meals and trips. This underscores the financial barriers many families face, affecting children's access to education. The charity urges the government to expand free school meal eligibility and eliminate the two-child benefit cap to alleviate these challenges.
• UK universities are under scrutiny for relying on unregulated recruitment agents who lure international students. Cash-strapped institutions, facing funding shortfalls, have turned to these agents to boost overseas enrolments and income. However, this practice has led to students arriving with unrealistic expectations about courses and support. The lack of oversight raises concerns about the quality and integrity of UK higher education, potentially damaging its global reputation. For the education sector, this highlights the urgent need for stricter regulation of recruitment practices to protect students and maintain the UK's standing as a trusted destination for international study.
• The UK government has issued funding guidance to the Office for Students (OfS) for the 2025-26 academic year, allocating £1.348 billion - a £108 million reduction from the previous year. An additional £84 million in capital funding is designated to support growth in priority subjects. The funding prioritises high-cost disciplines like nursing and midwifery, initiatives promoting equality of opportunity and support for world-class specialist providers. However, the guidance also indicates a shift in funding priorities, with reduced support for subjects like journalism, media studies and publishing. Franchised providers will no longer receive student premium funding, potentially impacting access for students in these programmes. These changes come amid financial challenges for universities, including declining international student numbers and rising operational costs. Sector leaders express concern that the funding cuts may exacerbate existing pressures, affecting the sustainability and diversity of higher education offerings in the UK.
• The UK higher education sector is confronting significant financial challenges, the Office for Students (OfS) warns. Nearly half of England’s universities (45.2%) anticipate deficits for 2024-25, up from 29.6% the previous year. This downturn is driven by a 15.5% drop in international student numbers, frozen domestic tuition fees since 2017 and rising operational costs. Consequently, institutions are implementing cost-cutting measures, including staff reductions and course closures, with an estimated 10,000 job losses across the sector. The government plans to raise tuition fees from £9,250 to £9,535 in September 2025, but this is viewed as insufficient to address the sector's £1.6 billion deficit. The Office for Students warns that without substantial reforms and increased funding, the financial sustainability of many universities remains at risk. More mergers between universities could be on the cards as a result of growing financial pressures, Vivienne Stern, chief executive of Universities UK (UUK), suggests.
• The UK government plans to tighten student visa regulations, focusing on applicants from Nigeria, Pakistan, and Sri Lanka due to concerns over visa overstays and subsequent asylum claims. In 2024, over 16,000 of the 108,000 asylum applications were from international students. Universities UK warns that these measures could exacerbate the sector's financial crisis, as international students contribute significantly to university revenues. A recent survey revealed that 25% of universities have made redundancies, 49% have closed courses and 18% have shut departments. Further restrictions may deter prospective students, intensifying financial pressures on higher education institutions.
• The UK government's 2025 immigration white paper outlines major reforms affecting universities. Key changes include cutting the post-study work visa from two years to 18 months, reducing opportunities for international graduates to gain UK work experience and potentially making the UK less attractive to them. A proposed levy on international student fee income is intended to fund the UK’s education and skills sector, but may strain university finances, particularly for institutions heavily dependent on overseas tuition. Additionally, stricter compliance rules for sponsoring international students (like tighter visa refusal rates and course completion benchmarks) could increase administrative burdens and risk for universities.

Healthcare & Social Assistance

• NHS England has announced an Urgent and Emergency Care Plan, promising to make effective use of a 3.9% increase from the government for adult social care. Key issues will be tackled in the plan, including improving hospital discharge processes. To facilitate this, the government, as outlined in the 2025-26 Better Care Fund policy framework, has confirmed a 3.9% increase in the NHS minimum contribution to adult social care.
• The Department for Health and Social Care is set to get the biggest settlement of £30 billion, in the government’s spending review. Under the review, the Department of Health’s day-to-day budget is expected to increase by 2.8% annually over three years. This equates to a cash increase of £30 billion by 2028, or £17 billion in real terms. However, the department’s capital spending budget is expected to rise only in line with inflation. Bringing down NHS waiting times was one of Labour's key commitments. Sir Keir Starmer has pledged to ensure that by the next election, 92% of patients in England waiting for planned treatment are seen within 18 weeks of being referred. NHS leaders warn the figure falls short of the sector's escalating needs. This limited boost raises concerns about the NHS's ability to address ongoing challenges, including staff shortages, rising operational costs and increasing patient demand. The constrained budget may impact service delivery and the implementation of long-term health initiatives. Healthcare professionals and unions are urging the government to reconsider the funding allocation to ensure the NHS can maintain its commitments to patient care and system improvements.
• On 6 June 2025, the government announced a nearly £450 million investment to expand urgent and emergency care facilities to provide faster care for patients, aiming for 800,000 fewer patients each year to wait more than four hours at A&E and more patients will receive urgent treatment in their community. The funding comes as part of the government’s Plan for Change to modernise NHS services and improve emergency care. The funding is expected to deliver around 40 new same day emergency care and urgent treatment centres – which treat and discharge patients in the same day, avoiding unnecessary admissions to hospital; up to 15 mental health crisis assessment centres to provide care in the right place for patients and avoid them waiting in A&E for hours for care, which isn’t the most appropriate setting for people who are experiencing a crisis. These centres will offer people timely access to specialist support and ensure they are directed to the right care and almost 500 new ambulances will also be rolled out across the country by March 2026.
• NHS waiting lists in England rose to 7.42 million in March, up by nearly 19,000 from February – the first increase in seven months. This setback challenges government claims that backlogs are improving. While waits of over 52 weeks dropped slightly, overall progress appears fragile. The data arrives as the government works on a draft 10-year NHS plan, expected in spring, though critics say it lacks impactful policies. Labour has pledged major improvements, including treating 92% of patients within 18 weeks by the end of this parliament – an NHS standard last met in 2015. The healthcare sector faces mounting pressure to deliver on these goals. Without significant investment and clear reform, ambitions may fall short, leaving patients stuck in long queues and the NHS under continued strain.
• The UK government’s upcoming 10-year NHS plan, informally called the ‘three-seven’ plan, is expected to focus on clearing waiting lists and stabilising services in its first three years, with more substantial reforms delayed until later. Health Secretary Wes Streeting has set three core priorities: shifting care from hospitals to the community, digitising the NHS and focusing more on prevention than treatment. Chris Thomas, formerly of the Institute for Public Policy Research, has taken over as lead writer of the plan. While the Department of Health insists reforms will begin immediately, limited funding and a rising waiting list - now at 7.42 million – raise doubts about how quickly changes will take effect. The delay could prolong existing pressures on the healthcare system and affect the government’s ability to meet key targets.
• NHS social workers in England will receive a 3.6% pay rise for 2025-26, aligning with current inflation rates. Health Secretary Wes Streeting asserts this will translate to a real-terms increase over the year, based on projected inflation trends. The raise, recommended by the NHS Pay Review Body, surpasses the government's initial 2.8% budget allocation. To accommodate this, the Department of Health and Social Care plans to implement efficiencies, like reducing staff at NHS England and cutting corporate services, ensuring frontline services remain unaffected. This adjustment applies to NHS staff under Agenda for Change contracts, including approximately 4,300 social workers. In contrast, local authority social workers have been offered a 3.2% increase, leading unions – UNISON, GMB and Unite – to advise members to reject the proposal. The disparity in pay rises between NHS and council-employed social workers may exacerbate recruitment and retention challenges within local authorities, potentially impacting service delivery across the UK's social care sector.
• Announced in May 2025, King’s College London has developed a groundbreaking AI model trained on de-identified NHS data from 57 million patients to predict future healthcare needs. By analysing patterns in electronic health records, the AI forecasts potential disorders, symptoms, medications and procedures. This innovation enables earlier interventions, more personalised care and improved resource planning within the NHS. It also aids in identifying at-risk individuals, enhancing clinical decision-making and streamlining patient recruitment for clinical trials.
• In April 2025, the UK government introduced a new initiative to integrate cutting-edge technology into adult social care, aiming to enhance patient care, reduce staff workload and promote independent living. Announced by Health Secretary Wes Streeting, the plan includes training care leaders in digital tools like motion sensors, video telecare and artificial intelligence for predictive care and administrative tasks. This move is part of a broader strategy to transition from analogue to digital systems in social care, supporting the government's 10-Year Health Plan. The initiative also encompasses the creation of new career pathways and a £12 million investment in staff training to improve recruitment and retention. While the Local Government Association welcomed the focus on technology, it emphasised the need for additional funding to address immediate sector challenges.
• As of April 2025, the minimum salary threshold for skilled workers, including Health and Care Visa holders, has increased to £25,000 per annum. This change renders many entry-level Band 3 roles ineligible for international sponsorship unless future pay awards exceed this threshold. Additionally, care providers must now demonstrate efforts to recruit domestically before hiring overseas workers. The cost of Certificates of Sponsorship has risen to £525 and care workers are no longer permitted to bring dependents under new visa applications. These measures have led to a notable decline in international applicants, exacerbating existing staffing shortages in health and social care. The Cavendish Coalition warns that these policies could hinder service delivery and patient care unless addressed through comprehensive workforce planning and investment.

Arts, Entertainment & Recreation

• New analysis by UKactive and Swim England warns of a growing crisis as 76% of publicly accessible water space lost in the past 15 years has disappeared since 2020, driven by financial pressures, ageing facilities and rising operational costs. The organisations urge the Government to place swimming pools and leisure centres at the heart of the Comprehensive Spending Review, offering a comprehensive strategy and funding to support renewal, bolster public health and reduce the estimated £150 billion cost of ill health to the economy. With 30% of Year 7 pupils unable to swim 25 metres, investment is crucial to address widening health inequalities and preserve vital community assets.
• In May 2025, the UK and India signed a new cultural cooperation agreement aimed at boosting collaboration across the arts, entertainment and recreation sectors. The deal focuses on joint initiatives in film, fashion, music and the arts, with both governments recognising the potential for these industries to drive economic growth and strengthen bilateral ties. UK Culture Secretary Lisa Nandy and India's Minister for Culture and Tourism, Gajendra Singh Shekhawat, highlighted the agreement's role in fostering people-to-people connections and international partnerships. For the UK's creative industries, this agreement opens avenues for increased collaboration, talent exchange and market expansion. It's expected to enhance the UK's global cultural presence and provide new opportunities for artists and organisations within the sector.
• The UK Gambling Commission has launched an enhanced Consumer Voice framework to deepen its understanding of gambling behaviours across Great Britain. This initiative enlists four specialist research companies to gather insights from diverse and often underrepresented groups, including those affected by gambling-related harms. For the UK's arts, entertainment and recreation sector, this development signals a shift towards more consumer-informed regulation. Companies in areas like betting, gaming and live events may need to adapt their practices to align with emerging consumer insights and regulatory expectations. This could lead to changes in marketing strategies, customer engagement and compliance measures, ultimately influencing how these sectors interact with their audiences.

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