The United Kingdom received a major vote of confidence today as Google confirmed plans to invest £5 billion in new projects in Britain ahead of U.S. President Donald Trump’s state visit.

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UK Government unveils new £380m investment in creative sector support. The funding targets film, music, video games, and regional creative clusters — aiming to double private investment, support innovation and jobs, and anchor the creative economy within the forthcoming ten‑year industrial strategy.

Public Accounts Committee report on CCS is full of errors and misconceptions

© Reuters. FILE PHOTO: People walk across Waterloo Bridge with skyscrapers of the City of London financial district and St Paul’s Cathedral seen behind, in London, Britain, March 28, 2025. REUTERS/Toby Melville/File Photo LONDON (Reuters) -One of Britain’s leading business groups on Wednesday slashed its forecast for economic growth in 2025 and next year due to headwinds from U.S. President Donald Trump’s tariffs and an increase in payroll taxes, a survey showed. Growth this year is now forecast to be 1.2%, the Confederation of British Industry said, lower than the 1.6% it predicted in December. The economy will then expand by 1.0% in 2026, down from its previous forecast of 1.5%. It said labour cost increases – such as the rise in social security contributions and the minimum wage that came into effect in April - were affecting firms’ hiring and investment plans, and are also expected to push up prices and reduce profits. The forecasts were made before the conflict between Israel and Iran broke out last week and pushed up oil prices. The CBI said that it was monitoring any impact on UK households, businesses, and inflation. "The unpredictable global outlook combined with rising employment costs, gloomy business sentiment, and subdued investment intentions means it’s more important than ever that government pulls all the levers it can to set the UK on a path to sustainable growth," Louise Hellem, chief economist at the CBI, said. The CBI’s forecast assumes the direct impact on the UK from tariffs will be limited as goods exports to the United States account for around 7% of total UK exports, although they will likely weigh on business activity. Britain’s economy contracted sharply in April due to a one-off hit from the end of a tax break on property sales and concerns about Trump’s announcement of wide-ranging tariffs on April 2. So far, it is the only major economy to have agreed a trade deal with the U.S., which is intended to exempt Britain from Trump’s increased tariffs on aluminium and steel imports, although a 10% goods levy remains in place. The Bank of England at its last interest rates decision in May estimated that Trump’s tariffs will lop 0.3% off annual output in three years’ time, and slightly push down on inflation. The BoE is expected to keep rates on hold next week, and investors are pricing in two more quarter-point rate cuts by the end of 2025. The CBI expects inflation to remain above the BoE’s target this year, partly due to higher household energy costs and regulated water bills, before falling to 2.5% in 2026. Wage growth was set to weaken and the BoE will cut its benchmark Bank Rate slowly to 3.5% by late 2025 from 4.25% now, the CBI said. Economic growth in 2026 will be largely driven by household spending, the CBI said, with cooling inflation and lower borrowing costs to help consumer spending pick up. But economists at the CBI were not expecting measures announced in finance minister Rachel Reeves’ Spending Review last week to have much of an impact on growth in 2025 and 2026, although they saw a benefit in the long term. "The Spending Review signalled a down payment on hardwiring the growth mission into government priorities, with targeted investment that will raise the long-term ceiling of the economy," Hellem said. Which stock should you buy in your very next trade? With valuations skyrocketing in 2024, many investors are uneasy putting more money into stocks. Unsure where to invest next? Get access to our proven portfolios and discover high-potential opportunities. In 2024 alone, ProPicks AI identified 2 stocks that surged over 150%, 4 additional stocks that leaped over 30%, and 3 more that climbed over 25%. That's an impressive track record. With portfolios tailored for Dow stocks, S&P stocks, Tech stocks, and Mid Cap stocks, you can explore various wealth-building strategies.

With the Employment Rights Bill costing employers an extra £7.4bn, and the budget possibly adding more costs, has it become too expensive to set a new business?

Rolling coverage of the latest economic and financial news, including the latest UK growth report

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website. Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.