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The IMF has urged Andy Burnham’s incoming government to preserve its predecessors’ deficit-reduction strategy, warning that elevated debt and gilt market pressures leave little room for additional borrowing or spending. It advised the new prime minister and chancellor to be “very selective” about fresh commitments and to rebuild fiscal buffers against future shocks. The IMF supported reforms to council tax, capital gains tax and VAT exemptions, but said future spending reviews should reallocate existing resources rather than expand overall budgets. Burnham has pledged to retain the fiscal rule requiring tax revenues to cover current spending while ruling out new wealth taxes and increases to income tax, VAT or national insurance. The fund warned that ambitious efficiency savings, uncertain tax receipts and shrinking headroom could make the consolidation plan difficult to deliver as the next election approaches in 2029.

 

The Times

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PwC and former partner John Waters have been fined by the Financial Reporting Council (FRC) for serious audit failures during the 2019 and 2020 audits of Babcock International. The FRC found that they did not adequately challenge management's accounting decisions or address risks of material misstatement. Waters, who resigned in January 2023, received a reduced fine of £59,062 while the firm’s £5.5m fine was reduced to £3.2m following cooperation. The FRC's Penrose Foss said: "The quality of these audits fell short of the standards expected of statutory auditors." This is PwC's second fine related to Babcock's audits.

 

Financial Times

Reuters

City AM

Daily Mail

Aegon has raised concerns that regulatory barriers are hindering UK pension fund managers from investing in start-ups and unlisted companies. The firm, which manages £160bn in assets, is one of 11 signatories committed to investing 5% of their assets in unlisted equities by 2030. The Association of British Insurers reported that performance fees and compliance issues are significant challenges, with many fund structures failing to meet Financial Conduct Authority regulations.

 

City AM

The Paris-based Financial Action Task Force reports that gaps in regulation allow criminals to move billions in illicit proceeds through the ‌crypto industry.

 

Reuters

Andy Burnham is preparing to announce new drilling for oil and gas in the North Sea within days of taking office, Bloomberg reports. The incoming Prime Minister will also take the heavily indebted Thames Water into public control. Which oil fields are approved for new drilling will depend on who Burnham installs as Energy Secretary as project approvals are not a cabinet decision. Thames Water has been trying to negotiate a rescue deal but talks between Ofwat and senior creditors are on hold whilst power transitions to Burnham. He may prefer a temporary solution in the form of a special administration or opt for mutualisation, making the company a not-for-profit cooperative. The FT also reports on expected policy announcements, including plans for a free national care service that could cost up to £18bn a year.

 

Bloomberg

Financial Times

British Steel has been nationalised to ensure the future of steelmaking and protect jobs, the UK Government has said. Labour took control of operations in Scunthorpe last year due to concerns over the potential closure of blast furnaces, though it has since remained under the ownership of the Chinese firm Jingye Group. Under the newly passed Steel Act, the Government is able to bring the steel industry into public ownership under circumstances where it met a public interest test. Jingye is seeking compensation but this may be refused.

 

BBC News

The UK government is urging private equity firms to list companies in London, addressing a significant IPO drought despite recent regulatory reforms and tax incentives.

 

Financial Times

Ocado has reported a decline in earnings, with EBITDA falling to £81m from £92m over the 26 weeks to May 31. Revenue remained flat at £684m, missing analyst expectations. Shares dropped over 18% to a 13-year low following complications in its partnership with Kroger, delaying the opening of a robotic warehouse in Phoenix. Chairman Adam Warby attempted to oust CEO Tim Steiner but failed. Steiner stated: "I am pleased that... we have established a clear process for longterm succession planning at Ocado." The company aims for cashflow positivity by 2027.

 

The Times

Frasers, led by CEO Michael Murray, has reported a nearly £10m loss due to Labour's minimum wage and National Insurance increases. This coms after the British Retail Consortium warned retailers face £6.5bn in added costs from these policies. They called for cuts to National Insurance for under-25s and reforms to business rates to support the struggling retail sector.

 

The Daily Telegraph

Aer Lingus has announced plans to cut up to 500 jobs as part of a cost-reduction strategy. The cuts will affect 290 head office roles, 140 cabin positions, and 70 pilots. The airline, which employs around 6,000 people, cited a challenging macro-economic environment, increased competition, and fuel costs as reasons for the layoffs. Aer Lingus reported losses of €103m (£87m) in the first quarter of 2026. 

 

BBC News

Entain, the company behind Ladbrokes and Coral, plans to cut 500 jobs, representing 2% of its 24,000-strong workforce. The decision aims to enhance "operational efficiency and agility," according to a company spokesman. While Entain did not specify how many of its 14,000 UK employees would be affected, the cuts come amid rising online gambling taxes. From April 2026, remote gaming duty will increase to 40%, and remote betting duty will rise to 25% by April 2027. These tax hikes are projected to generate an additional £1.1 bn annually for the Treasury by 2029-30.

 

The Times

A&O Shearman partners will receive an average pay of £2.2m, reflecting a 12% increase. The firm reported a 14% rise in profits, totalling £1.18bn before tax for the year ending last April. Despite revenue remaining stable at £2.8bn, this highlights the profitability gap between American and UK law firms. A&O Shearman, formed from the merger of Allen & Overy and Shearman & Sterling, is the first of the magic circle firms to disclose financial results this summer.

 

The Times

University of York research suggests more than 600,000 people in Britain may be unemployed because of obesity, highlighting significant consequences for productivity and public spending. Analysis of 284,258 UK Biobank participants found obesity reduced the likelihood of employment by 4.2 percentage points, with a stronger effect among men at 6.6 points compared with 2.1 points for women. Lower education levels were also linked to greater employment risks, while having a degree appeared to offer some protection. Lead author Dr Aharon Katz said: “Tackling obesity isn’t just a health imperative, it’s an opportunity to boost economic productivity.” Researchers called for targeted workplace policies that challenge discrimination and improve inclusion. Separate findings showed weight-loss injections reduced sickness absence by 45% after nine months and long-term absences by 56%. With two in three UK adults overweight or obese, policymakers are exploring treatments to help unemployed people return to work, although NHS access remains limited.

 

The Daily Telegraph

Daily Express

The I

The Sun

Fewer than 25% of employers anticipate providing above-inflation pay rises this year, according to a poll by the Work Foundation. Only 22% of business leaders plan to increase wages, with small firms particularly affected - just 16% expect to offer raises that exceed inflation. This contributes to stagnating living standards for most workers. Ben Harrison, director of the Work Foundation, commented: "Repeated periods of stagnant wage growth and sustained increases in the cost of essentials have left many households with little financial resilience."

 

Daily Mail

Growth expectations among small and medium-sized companies in Britain have fallen to their lowest level in over a decade, according to the Federation of Small Businesses. Only one in six small businesses anticipate growth in the next year, while nearly one in three expect to shrink, sell, or close. Tina McKenzie, policy chairwoman at the federation, said: "We cannot and must not accept a new normal where more small firms believe they will shrink." She urged new Prime Minister Andy Burnham to prioritise support for small businesses in his upcoming budget.

 

The Times

AI companies are strengthening security as threats against executives, employees and facilities escalate alongside public anxiety about jobs, affordability and social disruption. Incidents involving Anthropic and OpenAI include attempted violence, threatening messages and demands linked to customer disputes. Liferaft recorded a sevenfold rise in digital threats between late February and May, while executive-protection spending has increased sharply at technology companies including Palantir, Oracle and Salesforce. Some leaders now travel with armed guards, and employees are discouraged from wearing corporate logos. Anthropic said it tracks concerning behavior to identify escalation early. Industry figures acknowledge that warnings about AI-driven unemployment may have intensified hostility. Palantir chief executive Alex Karp said political unrest is the sector’s greatest challenge, warning that “none of us are going to make any money when the country blows up.” Despite public concern, companies continue developing increasingly advanced models.

 

Wall Street Journal