Business news live: HMRC get £9bn more than a year ago in income tax and NI

It is becoming harder and harder to talk to a human being. Twice recently I have wanted, needed, to speak to customer services. On each occasion, finding the actual phone number proved tortuous. There are FAQs and online “help” to be bypassed, and even if you get through, an automated message implores you to return to the internet.

Likewise, a new Thai restaurant has opened up the road, and its novelty is not the food but a robot waiter. How we revel in its brilliance. How we forget, too, how warm and friendly were the staff in the old place before it was taken over by tech-minded – and yes, penny-pinching – newcomers.

Progress, I’m meant to say. That may be so, but these are also jobs. And work is slowly but surely disappearing.

Chris Blackhurst on the rise of the machines…and human jobs

UK grocery prices have increased at their fastest pace for 18 months amid growing concern from shoppers about the rising cost of living, according to new figures.

Grocery price inflation accelerated to 5.2% in the four weeks to July 13, according to market research firm Worldpanel by Numerator, which was recently renamed from Kantar.

It represented a rise from inflation of 4.7% a month earlier and marked the highest level since January 2024.

The data indicated that rising prices are set to add an average of £275 to shoppers’ annual grocery spending.

The Government-owned British Business Bank has returned to a profit as it pushes forward with efforts to support Chancellor Rachel Reeves’ ambitious growth plans.

The UK’s economic development bank recorded a pre-tax profit of £144 million in the year to March, swinging a £122 million loss a year earlier.

It is the first profit the bank has delivered since 2022 after the valuation of firms it invested in were impacted by challenging economic conditions.

With US president Donald Trump threatening a tariff of up to 200 per cent on pharmaceuticals, the UK’s biggest public listed company, AstraZeneca, has announced a £37bn investment in the US.

The Independent recently reported on the pharma firm’s CEO being keen on a listing move to the US, though this is not necessarily linked to the new investment.

A new manufacturing facility will be created in Virginia and is expected to create thousands of jobs.

Pascal Soriot, chief executive of AstraZeneca, said: “Today’s announcement underpins our belief in America’s innovation in biopharmaceuticals and our commitment to the millions of patients who need our medicines in America and globally.”

The Sizewell C nuclear facility has finally been approved by the government.

A total cost of £38bn has been announced after investment from a Canadian pension fund; the British state is the biggest shareholder in the venture, holding 44.9 per cent of the plant, while Centrica owns 15 per cent.

Around 10,000 jobs will be created during construction and it’s due to be operational by the mid to late 2030s.

It has taken more than a decade to get a full green light since Sizewell C’s initial proposal and the cost has almost doubled in that time.

The FTSE 100 closed above 9,000 points for the first time yesterday, but hasn’t quite been able to sustain that momentum yet today.

A small rise early on has been given up and the index is down 0.02 per cent at present – largely flat as a result of 1.5-2 per cent falls for the likes of Legal and General, Admiral Group and Spirax Group.

At the other end of the scale, Compass Group is the highest riser, up 5 per cent on an improved earnings outlook.

A key part of the reform involves the FCA removing existing guidance that it deems to have “served its purpose,” a move intended to reduce the regulatory burden on financial firms.

This adjustment means borrowers could find it simpler to shorten their mortgage term, potentially lowering the total cost of borrowing and mitigating the risk of repayments extending into retirement.

More details on the latest mortgage changes here, from PA:

Speaking on those government borrowing costs, Alex Kerr, UK economist at Capital Economics, says Rachel Reeves will have to expect to announce even more taxes later in the year as a result.

“Despite the £3.6bn overshoot in June, public borrowing is still in line with the OBR’s forecasts after the first three months of the fiscal year. But things will probably get worse for the Chancellor. We think that she will need to raise £15-25bn at the Budget later this year, with higher taxes doing most of the heavy lifting,” he said.

“At £20.7bn, public sector net borrowing was well above the OBR and consensus forecasts of £17.1bn and £16.5bn respectively but closer to our forecast of £19.5bn.

“Admittedly, the better-than-expected start to the fiscal year means that borrowing is still on track to meet the OBR’s existing forecasts after the first three months of the 2025/26 fiscal year.

“But the government’s u-turns on spending cuts and potential upward revisions to the OBR’s borrowing forecasts means the Chancellor will probably need to raise £15-25bn at the Autumn Budget to maintain the £9.9bn of headroom against her fiscal mandate. And given that she is struggling to stick to existing spending plans and we doubt the gilt market will tolerate significant increases in borrowing, she will probably have to raise taxes instead.”

The government borrowed more than expected in June, a total of £20.7bn and the second-highest level for this month on record.

It is estimated that the chancellor’s £9.9bn headroom from the spring statement has become a deficit of £12-15bn now, with some experts suggesting Rachel Reeves will need to find as much as £20bn by the time the Budget rolls around in autumn.

Darren Jones, chief secretary to the Treasury, said: “We are committed to tough fiscal rules, so we do not borrow for day-to-day spending and get debt down as a share of our economy.”

The government’s stealth taxes are what have prompted the additional income, says Shaun Moore, tax and financial planning expert at Quilter.

Stealth taxes are often seen when no extra taxes are placed but thresholds from one band to the next remain in place, meaning people naturally gravitate into the next (higher) tax rates simply through getting a raise, a new job, the effects of inflation and wage growth and so on.

“The latest HMRC tax take data lays bare the impact of the government’s stealth tax strategy – and while it is lucrative in some areas, it is far from universally effective,” he said.

“PAYE income tax and National Insurance contributions for April to June 2025 hit £120.8 billion, up £9.6 billion year-on-year. With income tax thresholds frozen, workers are seeing more of their earnings swallowed by the tax system. Meanwhile, higher employer NICs signal a clear shift in the burden toward businesses.”