Rachel Reeves has been told that UK businesses have had to “hit the brakes” after she hiked taxes on employers. Sanjay Odedra, Director of Communications and Campaigns at BusinessLDN, said: “With inflation accelerating and growth slowing, many firms across the capital are hitting the brakes on hiring and showing caution on investment as they grapple with the cost of doing business.” She added: “The upcoming Autumn Budget is an opportunity for the Government to turn positive rhetoric on growth into reality.

“It’s vital that businesses do not bear the brunt of any future tax increases as they continue to feel the impact of April’s hike to employer national insurance contributions.” The expert urged the Chancellor to “instead prioritise measures that will boost the economy and encourage private investment”. Mr Odedra backed three moves to this effect.

He said: “That includes giving the green light to airport expansion plans across London and the south east to meet surging demand, backing innovative funding models that can help to pay for shovel-ready projects such as the DLR extension to Thamesmead, and scrapping the tourist tax so the UK can compete on a level playing field with our rivals on the continent when it comes to attracting high-spending visitors.”

Ms Reeves gave the green light to an expansion of Heathrow Airport in January, and said: “We are one step closer to expanding our biggest airport – boosting investment in Britain, increasing trade for businesses, and creating up to 100,000 jobs.”

The airport has said it can build a third runway for £21billion within a decade, and has submitted plans to the Government for a new full-length runway, but insisted it is open to considering a shorter one.

Hotel tycoon Surinder Arora has published his own Heathrow expansion plan, which rivals the proposal from the airport’s owners.

Transport for London’s (TfL) second consultation on proposals to extend the DLR to Beckton Riverside and Thamesmead is open.

The authority says: “We’re working with these partners and Homes England to maximise local and regional funding. We’re also finding ways to reduce costs and create efficiencies, but Government support is needed because of the size of the project.

“We have submitted a full Strategic Outline Case to Government – we need a contribution towards funding the progress to the Outline Business Case stage.

“Government capital funding would also be necessary to begin construction as early as 2028. This would enable us to open to customers in the early 2030s.”

There are “no plans” to introduce a tourism tax in England, Downing Street said in July, amid claims that Angela Rayner’s efforts to bring one in were rebuffed by the Treasury.

The Deputy Prime Minister had been pushing for councils to be allowed to introduce a tax on tourism in their areas as part of the Government’s devolution agenda, according to several media reports.

It was revealed this morning that UK inflation rose by more than expected in July as demand for summer travel pushed up air fares and food prices continued to climb, according to official figures.

Consumer Prices Index (CPI) inflation increased to 3.8% in July, from 3.6% in June, the Office for National Statistics (ONS) said.

Kris Hamer, director of insight for trade body the British Retail Consortium, said: “Households are once again seeing the cost of their weekly shop climb, with food inflation now up by 1.9 percentage points in just four months.

“This surge has been a key driver behind headline inflation, alongside a rise in transport costs, piling fresh pressure on families already being forced to cut back.

“The Bank of England has been clear that Government policies, which have driven up the costs of employment, are fuelling price rises at the till, while poor harvests and global instability have also added further cost pressures.”

UK businesses will be potentially attractive to European businesses after Brexit and Donald Trump’s trade tariffs, an expert has suggested. The current trade environment places British firms in a good position, they argued, as Britain has negotiated trade deals with both the US and EU, and Mr Trump announced 15% tariffs on most of the bloc’s exports. In addition, Switzerland, which is not an EU member, faces a 39% tariff – the highest in Europe and fourth highest globally. This has “left many Swiss firms grappling with the threat of severe economic repercussions”, Aman Parmar, Head of Marketing at BizSpace, a small to medium business (SME) flexible workspace firm.

The EU and the US announced on July 29 that a trade deal would see a 15% ceiling on all EU exports currently subject to reciprocal tariffs. This also applies to cars and car parts, as well as any potential future tariffs on pharmaceuticals and semiconductors. However, European wines and spirits did not make it on the list of items exempt from the 15% levy. A 10% tariff will remain in force for countries with which the US has a trade surplus, which includes most states.

The House of Commons outlined the UK’s tariffs on July 30 as follows. In March, President Trump imposed a 25% tariff on all aluminium, steel and derivative goods imports.

From April 3, there was a 25% tariff on all passenger vehicles and light trucks. Tariffs of 25% on automobile parts were due to be implemented from May 3.

From April 5, a 10% baseline tariff on imports from the UK, affecting most goods.

Mr Parmar added: “This dramatic difference in tariff conditions could position the UK as a key indirect beneficiary of these tariffs, enabling it to reclaim some of the trade and investment lost post-Brexit.”

The expert also said: “The aftermath of the 2016 Brexit referendum saw many British businesses shift operations to mainland Europe, leading to initial uncertainties and a decline in exports.

“However, the prospect of US President Trump’s newly imposed tariffs is prompting companies to reassess their strategies.

“Similar to the situation faced by smaller Swiss firms, particularly in the watch and machinery sectors, UK SMEs might find themselves in a position to attract displaced EU businesses.

“In Switzerland, for instance, a fifth of the watches and jewellery produced are exported to the US; analysts suggest that the impact of US tariffs will disproportionately affect the lower-end segments of these markets.”

Swiss government held crisis talks on Monday in an attempt to finalise a proposal that might dissuade US President Donald Trump from imposing 39% tariffs on the country, Bloomberg reported.

Mr Parmar said: “With Switzerland now facing a staggering 39% tariff – the highest in Europe and globally the fourth highest behind only Syria, Laos, and Myanmar – it underscores the vulnerability of smaller exporters, which the UK could leverage to attract businesses seeking more stable conditions.”

Rachel Reeves has unveiled a raft of reforms that she hopes will boost investment in the UK economy and therefore kickstart more growth. The “Leeds reforms” – which the Chancellor says “represent the widest set of reforms to financial services for more than a decade” – include tweaks to major banking rules, cutting red tape in the City, and urging more people to move cash out of savings accounts and into stocks and shares. It comes on the back of figures that suggested GDP dropped by 0.1% in May in a blow to Ms Reeves.

“It will now take something quite special for the UK to avoid an outright contraction in GDP in Q2, which doesn’t appear at all likely quite frankly given the perfect storm of downside risks,” Matthew Ryan, Head of Market Strategy at global financial services firm Ebury, said. “The government’s much maligned business tax increase is proving particularly damaging, as this is not only squeezing bottom lines, but clobbering Britain’s labour market, which is haemorrhaging jobs at a breakneck speed.”

Below is a full list of the reforms announced by the Chancellor this evening.

Individuals

A new advertising campaign will highlight the benefits of investing to individual consumers. Major banks and finance firms, including including Barclays, Lloyds, Vanguard and Hargreaves Lansdown, have agreed to take part in the campaign to help spread awareness.

Banks will be able to offer a new type of help called “targeted support” from April next year, meaning they can alert customers about specific investment opportunities, with a view to encourage groups of people with cash sitting in low-return current accounts to move it into stocks and shares.

Risk warnings on investment products will come under a review to ensure people can make accurate judgements about risk levels – potentially opening the door to some warnings being watered down.

Long term asset funds will be allowed to be held in stocks and shares ISAs next year.

The Government will continue to consider reforms to ISAs and savings to strike the right balance between cash savings and investment.

It comes after rumours swirled that the Chancellor was wanting to cut the tax-free limit of a cash ISA from £20,000 to £10,000 in a bid to get more money into stocks and shares.

Henrietta Grimston, Financial Planner at Saltus, said: “Reports that the Chancellor is now expected to consult on changes to the cash ISA allowance, rather than introduce immediate reform, will come as a relief to many savers.

“Clients with large cash ISA holdings aren’t typically chasing high returns, they are prioritising security, flexibility and peace of mind. For many, cash ISAs offer a simple and low-risk way to manage their savings without worrying about market volatility.”

Banks and building societies

Less strict lending rules will allow banks and building societies to offer more mortgages at 4.5 times a buyer’s income, which is expected to mean thousands more loans become available for first-time buyers.

The bank ring-fencing regime, which separates banks’ retail banking from their investment and international banking activities, will be reformed.

The Bank of England has raised the threshold at which smaller and mid-sized banks have to start holding emergency funding.

Easing capital requirements is expected to help smaller banks scale up by freeing up more money for lending and investment.

The City

The UK’s Financial Ombudsman Service – which settles complaints between consumers and businesses – will be modernised and simplified and decisions will be more aligned with the financial regulator.

Plans to ease rules around senior manager appointments will be sped up, reducing the number of roles that are subject to regulatory approval.

The regime was introduced after the 2008 financial crisis to make individuals more accountable for their conduct and any problems that arise under their watch.

Consumer Duty, a set of rules which set higher standards of consumer protection, will be reviewed by the UK’s financial regulator over how it applies to investment banks and asset managers.