Charlotte Hamilton
June 2025

Let’s be honest, not every headline feels relevant when you’re running a business. But behind the buzzwords and big numbers are signals that matter for your margins, your teams and your future plans. We’ve dissected some of the headlines to help you understand what’s going on and how to respond with confidence.  

What’s The Scoop? 

Retail rebounds (sort of) 

The UK retail sector has seen a 7% year-on-year increase in total retail sales in April, well above the 12-month average growth of 1.4%. Warmer weather, Easter spending, and a recent 0.25% interest rate cut by the Bank of England. This sounds positive, right? However, rising employer taxes and national insurance contributions which came out of the October 2024 budget could weigh on retail profits despite higher revenues.  

Luxury market hit hard

Burberry, the UK’s flagship luxury brand, has announced it’s cutting 1,700 jobs globally following a £66m pre-tax loss, Despite the prestige, even heritage brands aren’t immune to recession fears and the knock-on effects of slowing global demand. If a brand like Burberry is recalibrating, smaller high-end brands may need to follow suit – quickly and strategically.  

UK leads the G7 but for how long?  

The UK is currently the fastest-growing economy in the G7, with 0.7% GDP growth in Q1 2025, surpassing expectations. This growth has been driven by strong performance in services, retail, and advertising (such as those on the FEBE Growth 100 list), supported by four interest rate cuts since last July. Again, this sounds positive. However, economists warn that this surge may not last and upcoming tax hikes and international trade uncertainties  (ahem, tariffs!) could undermine progress. 

What Should You Be Doing to React? 

Retail:  

  • Capitalise on the retail sector’s momentum and consumer confidence whilst it lasts by aligning product offerings with seasonal demand and spending habits. 
  • Budget carefully and price strategically. Factor in rising employer taxes and national insurance contributions that could erode profit margins even as revenue grows.  
    Questions on  tax planning and tax-friendly business structures? Get in touch with our Tax specialist, Leigh Sayliss.  

Luxury Market:  

  • Don’t wait for downturn to hit. Global economic challenges are on the horizon and changes must be made now to react to this in order to weather the storm for businesses in luxury and high-end retail – changes can feel brutal but essential.
    Our     Employment team can help navigate tough decisions with clarity. 
  • Take local legal advice if you have plans to open an international branch or enter a partnership with someone out of the UK.
    Contact our Head of International, Ricardo Geada, who will know the right people for your needs.  

UK Economy in G7:  

  • Take stock: What’s working? What’s not? What new opportunities are there for you and your business whilst also planning for incoming tax changes and international trade uncertainties? 
  • Stay informed about upcoming tax changes and trade agreements that could impact business operations. New markets may be opening  but so are new risks. We’re here to help you balance ambition with foresight. 
  • By staying agile and informed, businesses can position themselves to thrive in a rapidly evolving economic landscape.
    If you’re in retail, luxury, or impacted by the broader economy and want to explore how these changes affect you, please reach out to Charlotte Hamilton.