Weekly Briefing: Amazon’s £40bn Bet, CGT Warning Signs, Manufacturing Slump & Bitcoin’s Big Move

From major corporate investment and tax policy tension to manufacturing struggles and the resilience of digital assets, the UK economy is undergoing a period of rapid change and competing pressures. These stories show where confidence is growing, where it’s being tested, and how both public and private players are responding. 

While Amazon is doubling down on its UK presence, manufacturers are calling for urgent government action, and capital gains tax policy is facing scrutiny. Meanwhile, Bitcoin is proving its durability once again, this time with the backing of serious institutional inflows.

Read on for the breakdown.

Amazon’s £40bn Bet on the UK Signals More Than Just Jobs

Amazon’s commitment to invest £40 billion into the UK includes two new fulfilment centres in the East Midlands (opening 2027) and previously announced builds in Hull and Northampton. Each of those will create around 2,000 jobs, reinforcing Amazon’s position as one of the UK’s largest private employers.

But this isn’t just logistics—it’s everything from redeveloping Bray Film Studios to expanding corporate space in East London. It also wraps in the bulk of an £8bn investment into UK data centres. Essentially, Amazon is investing in UK infrastructure, creative industries, and cloud tech, not just boxes and vans.

Both the PM and Chancellor have hailed it as a “massive vote of confidence” in the UK economy. With wages, benefits, and skills development rolled into the total, Amazon’s spending plan doubles as a jobs policy.

Amazon’s CEO, Andy Jassy, went out of his way to say this investment is spread across the UK. Wales, Scotland, and Northern Ireland included. It’s a line aimed at soothing concerns about regional inequality and proving that this isn’t just a London story.

Of course, not everyone is applauding. Concerns about working conditions in Amazon warehouses persist, and a new investigation is probing the company’s treatment of suppliers. So while the headlines are celebratory, the scrutiny hasn’t gone away.

Still, it’s hard to ignore the momentum. Amazon sees long-term potential here, and if a company known for ruthless efficiency is betting on Britain, others will likely follow. The government’s challenge now is to make sure the benefits don’t stop at warehouse walls.

Manufacturing Stalls as Sector Awaits Short-Term Action

While Amazon charges ahead, the UK’s wider manufacturing sector is slowing down. A new CBI survey shows output has dropped by up to 23% in the last three months, with 15 of 17 subsectors reporting declines. This includes the chemicals sector and key players in mechanical engineering.

Order books are thin, both domestically and internationally, and business leaders say they’re under pressure from higher employment taxes and lower demand. This has added urgency to Chancellor Rachel Reeves’ new industrial strategy, which focuses on high-growth areas like clean energy and advanced manufacturing.

But a long-term plan doesn’t fix short-term problems. Skills shortages, high energy costs, and the lingering effects of Brexit-era trade tensions are making it hard for manufacturers to rebound. Some are calling for faster intervention, particularly around energy support and tax flexibility.

The industrial strategy does include training and immigration elements, but execution is key. Right now, firms are waiting to see who will benefit from promised subsidies, especially those that could knock a quarter off energy bills.

CBI’s chief economist Ben Jones put it plainly: the government needs to “dismantle barriers to growth” with real urgency. That means quickly delivering on promises around energy, tech adoption, and the Apprenticeship Levy, rather than getting stuck in strategy mode.

There’s a window here to prove the UK is serious about reindustrialisation. But without quicker moves, manufacturers might keep trimming output—or worse, stop investing altogether.

Capital Gains Tax Risks Hitting the Law of Diminishing Returns

Capital gains tax (CGT) is back in the spotlight—and this time, it’s more than just a revenue lever. After Reeves hiked CGT rates last year (from 20% to 24% for higher-rate taxpayers), pressure is mounting for more increases. But tax experts are warning: push too far, and receipts will be less, not more.

Most CGT revenue comes from a small group of people. Just 2,000 individuals accounted for 37% of gains taxed in 2022–23. If those people decide not to sell, delay transactions, or move abroad, tax receipts could collapse.

We’re already seeing it. CGT revenue fell 10% to £13bn this year, and the OBR warned back in March that last year’s increase might blow a £23bn hole in the Treasury’s forecast, and that’s not a small miss.

Tax advisers are calling CGT “an optional tax”—you only pay it if you sell. If rates go much higher, people will simply hold on to assets like property or shares.

The Treasury insists it’s focused on growing the economy rather than just raising taxes, pointing to planning reforms that could boost GDP. But if capital gains are on the chopping block again in Reeves’ next Budget, the government could risk triggering a behavioural shift that shrinks the tax base.

If anything, this is a test of fiscal balance. There’s a Laffer Curve for CGT just like any other tax—push past the optimal point, and the system works against you. CGT may not be the next lever to pull.

Bitcoin ETFs Surge as Geopolitics Drives ‘Digital Gold’ Momentum

While traditional markets worry about slow growth and rising taxes, Bitcoin is having a moment. US-listed spot Bitcoin ETFs have seen 11 straight days of positive inflows, capped by a £588.6m surge on Tuesday, mostly thanks to BlackRock and Fidelity funds.

That brings total inflows to over £2.2bn in just under two weeks. Much of this came on the heels of a ceasefire between Israel and Iran, a development that brought a sense of relief to markets and sent Bitcoin surging past $106,800 from a recent low of $98,000.

This isn’t just about price, it’s about positioning. Investors are increasingly treating Bitcoin like a hedge against uncertainty, much like gold. Vincent Liu from Kronos Research summed it up well: “Bit by bit, Bitcoin is bolstering its position as a resilient refuge.”

But not everyone is convinced the recent rally is sustainable. Ray Youssef, CEO of NoOnes, called it a “relief rally” rather than a true breakout. He sees the market consolidating between $100,000 and $106,000, with risks still looming from macroeconomic signals.

There’s also growing divergence in crypto funds. While Bitcoin ETFs raked in capital, Ether-based ETFs showed mixed results, some saw inflows, while Grayscale’s lost nearly £27m. It’s a reminder that confidence in crypto isn’t always uniform.

Still, the appetite is there. Institutional money keeps trickling into Bitcoin, treating it less like a speculative asset and more like digital gold. For investors wary of tax hikes, slow growth, and political volatility, the appeal of decentralised assets seems to be only growing stronger.

Final Note

We’re seeing a clear divide between growth optimism and economic caution. Amazon’s investment is a bright spot, but it comes amid fragility in traditional industries and rising tensions over taxation. And while Bitcoin thrives as a store of value in uncertain times, UK fiscal policy needs to balance revenue-raising with economic stability. 

The choices made over the next few months—on tax, tech, and training—will say a lot about the direction of the UK economy and investor sentiment more broadly.