With the Budget approaching, concerns are growing over how the Chancellor will address the widening fiscal gap and restore business confidence. Early IS-8 investment figures are strong, with major commitments in AI, defence and automotive, while further measures to revitalise Financial Services are expected. Wednesday’s announcements will be closely watched for their impact on growth, competitiveness and the wider economy.
The UK’s new Industrial Strategy (IS-8), launched in June 2025, commits over £86 billion to boost productivity, innovation and competitiveness across eight key sectors — from Clean Energy to Life Sciences. Early indicators show rising investment and job creation, particularly in AI, Energy and Defence, as the government accelerates efforts to drive industrial growth.
Ukraine’s defence sector is rapidly transforming amid ongoing conflict, with homegrown technologies like the long-range “Flamingo” missile boosting military autonomy and shifting the strategic balance. As Russia’s economy weakens under falling energy revenues and rising costs, pressure is mounting for a ceasefire — especially if the rouble again breaches 100 to the dollar, a threshold that could make continued war unsustainable.
UK pay growth is diverging, with public sector wages up 6.0% versus 4.4% in the private sector, while productivity continues to lag. Economists warn this imbalance risks fuelling inflation as firms turn to AI and automation to offset rising labour costs
The UK housing market is under strain as rising interest rates, new regulations, and potential wealth taxes squeeze landlords and stall house prices. With construction costs climbing and buyer demand weakening, builders, landlords, and the wider labour market all face mounting pressure.
