Businesses face another year of rising employment costs and stubbornly high energy bills after Chancellor John Healey delivered a Budget which offered some welcome measures on investment, but little to transform the UK's economic outlook.
The Chancellor confirmed a 3.9% increase in the National Living Wage to £13.20 an hour, while leaving employer National Insurance contributions unchanged.
However, the Budget contained little new support to tackle some of the biggest challenges facing employers, including high energy costs, labour shortages and weak investment.
The British Chambers of Commerce (BCC) concluded that the Chancellor had prioritised stability over growth, with many of the announcements reaffirming existing policies rather than introducing significant new measures to stimulate the economy.
Here are the key announcements and what they mean for businesses.
Employment costs: Minimum wage rises to £13.20
The National Living Wage will increase by 3.9% to £13.20 per hour, while the minimum wage for 18 to 20-year-olds will rise by the same percentage to £11.27.
Although the increase is more modest than in recent years, it will add to payroll costs for employers, particularly in labour-intensive sectors such as hospitality, retail and social care.
Businesses will welcome the decision to maintain the differential between adult and youth wage rates, following concerns that rapidly rising employment costs were discouraging recruitment of younger workers.
However, there was no change to employer National Insurance contributions or the Employment Allowance, despite calls for measures to reduce the cost of creating jobs.
Energy bills: Little relief for most businesses
Despite continued concerns about the UK's high commercial energy costs, the Budget offered limited additional support for businesses.
The Chancellor's headline energy measures focused primarily on households, including the removal of gas standing charges and additional consumer support.
For businesses, the Government largely reiterated previously announced assistance for energy-intensive industries through the British Industrial Competitiveness Scheme and British Industry Supercharger.
There were also commitments to accelerate electricity grid connections and support strategic industries, including data centres.
However, businesses outside the sectors receiving targeted assistance are unlikely to see any meaningful reduction in their energy bills.
Investment: More funding for growing companies
One of the more positive announcements was additional capitalisation for the British Business Bank and National Wealth Fund, taking the overall capitalisation of public finance institutions to £229billion.
A new 10% Capital Gains Tax rate for qualifying founders of high-growth companies, applying to gains of up to £10million, is designed to encourage entrepreneurship.
However, the reduction in Business Asset Disposal Relief to £500,000 represents a setback for business owners planning to sell or exit their companies.
AI and technology: Investment in security and innovation
The Budget included additional funding to strengthen the UK's position in artificial intelligence, particularly around security and resilience.
This includes support for the AI Security Institute, the National AI Biosecurity Initiative, cyber defences and a new National Agentic Security Unit.
Investment in the Sovereign AI Unit will also support promising UK AI companies, while funding for the AI Economics Institute will help assess the technology's wider economic impact.
Trade: Tariff savings but new costs on the horizon
The Government reaffirmed tariff suspensions on selected imported products and ingredients, expected to reduce costs by approximately £215million in 2027-28 and £155million the following year.
However, the Budget contained limited new support for exporters.
The UK Carbon Border Adjustment Mechanism is also due to take effect in January 2027, with a consultation announced on potentially extending its scope to imported oils and fuels.
Meanwhile, the Government intends to abolish the customs duty exemption for low-value consignments from October 2028, raising concerns about additional costs for importers and manufacturers.
The verdict: Stability, but where is the growth?
For businesses, the Budget offered a mixed picture.
There was welcome restraint on some employment taxes, targeted business rates relief and measures to improve access to finance, apprenticeships and infrastructure.
However, the underlying challenges facing the economy remain largely unchanged.
Employers continue to face high energy bills, increasing wage costs, skills shortages and uncertainty over investment.
The BCC's assessment was that, while the Budget provides a degree of stability, it lacks the ambition needed to deliver a significant improvement in business confidence or economic growth.
For many firms, the biggest question following the Chancellor's statement will be not what has changed, but how much longer they must wait for meaningful action on the cost of doing business.