Weekly Briefing: Business Rates Adjustments, New All-Time Highs, Private Equity Movements, and Ongoing Job Cuts

This week’s briefing again keeps a close focus on the UK economy, while also taking in some broader investment trends. To begin, we look at one asset that seems unwilling to make any major retracement, sending a strong signal about overall market sentiment. 

We then turn to the UK’s private equity sector, where shifts in investment patterns are setting a more positive tone – though perhaps not from the source you might expect. Finally, we cover two stories directly affecting UK businesses: one reflecting current strains, and the other offering a more hopeful outlook for the future.

Read on for the full breakdown.

Gold prices hit record highs

Gold surged past $3,650 per ounce this week, reaching its highest level in history as investors piled into safe-haven assets. The move was fuelled by expectations that the Federal Reserve will cut rates this month, with traders now pricing in nearly a 90% chance of a 25-basis-point reduction.

These gains mark another leg in a rally that has seen gold more than double in value over the past three years.

A mix of geopolitical tensions, economic uncertainty, and trade frictions has driven this surge, with investors increasingly turning to bullion as a hedge. Political pressure has also played a role, with Donald Trump openly criticising the Fed and vowing to reshape its leadership.

Markets are also watching a court ruling that could determine whether Trump can dismiss Fed board member Lisa Cook, which would set a precedent for reshaping the central bank in favour of looser monetary policy. That uncertainty has only boosted the case for holding gold.

With interest rates falling, the opportunity cost of holding non-yielding gold declines, making it more attractive. Lower yields and a weaker dollar reinforce that trend, particularly at a time when trust in central banks is wavering.

As Goldman Sachs put it last week: “If the independence of the Federal Reserve comes into question and investors shift a portion of their Treasury holdings into the precious metal, gold could surge to as much as $5,000 per ounce.”

Private equity rebounds in the UK

UK private equity dealmaking regained momentum in the second quarter of 2025, despite overall deal value slipping slightly. Total deal value fell 5.3% year-on-year to £55.7bn, broadly in line with Europe, but deal count jumped 19.2% to 1,060 completed transactions, according to PitchBook.

Several headline-grabbing deals helped drive confidence back into the market, including Athora’s £5.7bn takeover of PIC and KKR’s £4.8bn acquisition of Spectris. Analysts point to a mix of easier debt financing conditions and sellers agreeing to more realistic valuations as the catalyst for this resurgence.

Buyouts accounted for 25.7% of deal volume and the majority of value for the first time since 2021. The mid-market led the way, reflecting the breadth of opportunities in this space, but mega-deals also staged a comeback. Together, these trends highlight a renewed willingness among private equity firms to take on larger, longer-term growth bets.

Interestingly, US investors have been among the most interested in UK opportunities. With domestic competition fierce, they’ve been directing more capital into the UK, where valuations appear attractive.

Participation from US firms has jumped from just over a fifth of deal value to nearly a third in 2025. This is helping to underpin the recovery of UK private equity, even as some domestic players remain cautious.

UK firms cut jobs at the fastest pace since 2021

UK businesses have started cutting jobs at the quickest pace in four years, according to the Bank of England’s latest survey. Employment fell at an annual rate of 0.5% in the three months to August, with almost half of firms citing higher employer National Insurance contributions as the leading factor.

The tax rise, worth £25bn from April, has been criticised by business leaders who say it has forced them to reduce staff numbers and raise prices. The survey showed 34% of firms increased prices, 20% cut wage growth, and 66% reported weaker profit margins.

Expectations for future hiring have also weakened, slipping to just 0.2% growth intentions, down from 0.5% previously. This suggests the job market could remain under pressure heading into the end of the year.

Chancellor Rachel Reeves faces growing pressure ahead of her 26 November budget, with speculation that more tax hikes will be used to cover a widening deficit. She has acknowledged the challenge, saying the economy is “not working well enough, for working people.”

While the Bank of England noted the impact of NICs changes was slightly less severe than feared earlier in the year, the risk of rising unemployment could factor into rate-setting decisions. Economists expect the Bank to hold rates at 4% in September, but warn of risks if job losses deepen.

Business rates reform on the table

HM Treasury has opened the door to reforming “cliff edges” in business rates that discourage small businesses from expanding. Currently, firms lose all small business rates relief if they take on a second property, a system widely criticised for stifling growth.

This means, for example, that a bakery opening a second shop in a nearby village could suddenly face thousands in additional costs. The interim review highlights how reforming relief rules could help lift both investment and living standards.

The government has also reiterated its commitment to cutting red tape and promoting deregulation. Reeves has written to ministers stressing the need for fiscal discipline but also for measures that actively support growth and reduce living costs.

From April 2026, retail, hospitality, and leisure businesses will benefit from permanently lower tax rates, a move aimed at boosting high streets across the country. These reforms are intended to work in tandem with broader tax relief changes.

The Chancellor has been clear that tackling barriers to small business expansion is a central part of her growth mission. The review suggests the Treasury wants to create a more flexible tax regime that rewards expansion rather than punishes it.

As Reeves said this week: “Our economy isn’t broken, but it does feel stuck. That’s why growth is our number one mission. We want to see thriving high streets and small businesses investing in their future, not held back by outdated rules or strangled by red tape.”

Final Note

This week’s briefing highlights a clear shift in direction for safe haven assets – a trend that speaks volumes about overall market sentiment. Gold, in particular, continues to be seen as a steady asset that thrives in times of caution.

Closer to home, UK taxation and the upcoming Autumn Budget remain front and center. Each week brings us closer to decisions that will be increasingly crucial. Encouragingly, we’ve already seen some positive movement on business rates – a form of taxation with a direct impact on growth.

Looking ahead, next week’s briefing will unpack a raft of new economic data from the ONS, covering CPI, GDP, and the jobs market. Be on the lookout for a detailed breakdown worth keeping an eye out for.