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Large UK Companies To Scale Back Hiring And Investment Amid Tax Increases

Large British businesses are preparing to slow hiring and reduce investments at the fastest pace since the COVID-19 pandemic, according to a report released by Deloitte on Monday. The survey points to the impact of substantial tax increases introduced in the government’s October budget, which include a £25 billion ($31 billion) rise in employers’ social security contributions.

Deloitte’s quarterly survey, conducted with 63 of the UK’s largest companies, reflects broader trends also seen in smaller and medium-sized businesses grappling with the tax hike. As cost control becomes a priority, the survey indicates that chief financial officers (CFOs) are scaling back their expectations for corporate investment, discretionary spending, and hiring over the next 12 months.

Ian Stewart, Deloitte’s chief economist, noted, “With cost control to the fore in the wake of the budget, CFOs have trimmed expectations for corporate investment, discretionary spending, and hiring in the next 12 months.”

The survey, conducted from December 3 to December 16, did not account for the recent drop in sterling and the spike in 30-year government bond yields, which have reached their highest levels since 1998. These developments have raised concerns about an economic slowdown since the government’s budget announcement.

Employment intentions among businesses have seen the steepest decline since early 2020, and plans for capital expenditure are at their weakest since Q3 2023. Companies are also showing less appetite for taking on risk, with CFOs showing the least confidence in the economy in more than a year.

Despite this, business optimism has dipped to a two-year low, although the overall sentiment is not as negative as the lows witnessed in 2022 or 2020, according to Deloitte’s findings. While CFOs still consider the UK a more attractive investment destination than the eurozone, the gap has narrowed, with Europe trailing behind the United States as the preferred choice for investment.

In a separate survey, manufacturing trade body Make UK revealed that 57% of manufacturers would consider increasing investment once the government provides further details on its long-term industrial strategy, expected in the first half of 2025.

Stephen Phipson, Chief Executive of Make UK, emphasized the urgency of the government presenting clear and immediate priorities as part of the industrial strategy. He believes it could help boost business confidence and set a positive tone for the year ahead.

Europe’s Deadly Summer Heat Exposed The Cost Of A Warming Continent

Europe experienced its deadliest summer for heat-related deaths on record in 2026, with an estimated 24,400 excess deaths linked to extreme temperatures across 30 countries. Researchers estimate that human-induced climate change was responsible for around 32,000 of the deaths attributed to heat in the study’s broader analysis, accounting for 65% of the total.

The findings highlight the growing public-health consequences of global warming, largely driven by fossil fuel use, as extreme heat becomes more frequent and severe.

A Summer Of Dangerous Heat

Between June and August, heatwaves pushed temperatures in Western Europe to an average of 2.9°C above the 1991–2020 norm, with some days reaching 12°C above average. Nearly a third of estimated heat-related deaths occurred during a particularly intense heatwave between 17 June and 1 July.

“These numbers are a stark reminder that our hotter, more extreme summers are having an increasingly severe impact on public health,” said Dr Clair Barnes, a researcher at Imperial College London and co-author of the study.

The estimated toll exceeded previous peaks of around 29,000 deaths in summer 2022 and 28,000 in 2003 across the region studied.

How Researchers Estimated The Toll

Researchers modelled the relationship between temperature and mortality across 854 urban areas in the EU, UK, Norway and Switzerland, covering around 40% of the population in the 30 countries studied.

The analysis incorporated temperature records, age, socioeconomic conditions, environmental factors and access to healthcare. By comparing actual temperatures with those expected without human-induced warming, the team estimated the additional deaths attributable to climate change.

Final official mortality figures for summer 2026 are not yet available in many countries, and heat-related deaths are often underreported because their effects can be difficult to identify directly.

Older People Face The Greatest Risk

People aged 85 and over accounted for roughly half of the estimated deaths. However, the impact extended across age groups, with around 800 excess deaths among adults aged 20–44 and approximately 6,000 among people under 65.

Southern Europe experienced the highest mortality burden, reflecting hotter temperatures and other vulnerabilities, including air pollution, limited green space and unequal access to healthcare and heat-alert systems.

Italy, France And Spain Record Highest Toll

Italy recorded an estimated 13,303 heat-related excess deaths, followed by France with 7,268 and Spain with 6,824. Germany recorded around 6,340, while the UK saw an estimated 4,354 deaths.

In the UK, the heat also placed significant pressure on healthcare services. Andrew Hartle, Professor of Practice of Anaesthesia at Imperial College Healthcare, said demand during the summer resembled that of a severe winter virus season.

Cities Urged To Strengthen Heat Protection

Researchers say cities can reduce the risks through climate shelters, external shading and building retrofits, alongside measures to help residents avoid exposure during the hottest hours. Checking on vulnerable people, staying hydrated and following heat alerts are also important.

The researchers stress that adaptation must go hand in hand with reducing fossil fuel use to limit further warming. The findings underline that extreme heat is already a major public-health threat across Europe, with thousands of lives at risk each summer.

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