5 important things happening in the UK today

Here are 5 important things happening in the UK today, Wednesday (4 February 2026):

Reeves is already out of headroom despite tax rises: Rachel Reeves has already run out of Budget headroom despite £26 billion of tax rises in November, top economists have said. The National Institute of Economic and Social Research (NIESR) said higher-than-expected unemployment and weak growth meant the Chancellor was set to hit her borrowing targets with zero wiggle room. “Fiscal space in our view remains extremely tight, with public debt high and limited room to respond to future shocks,” David Aikman, the Institute’s director, said. [The Telegraph]

UK courts on brink of collapse: The court system is “on the brink of collapse” as the backlogs for trials reach unprecedented levels, the head of a major review has said. Sir Brian Leveson, a senior retired judge, warned ministers, the police and others that there could not be a “pick and mix” response to solving the crisis. His second and final report has recommended 130 efficiency changes, from technical measures to allowing prison vans to use bus lanes to hit court appearance deadlines. [BBC]

UK businesses are being forced to plan year-to-year: Businesses are seeing political change and regulatory uncertainty as a barrier to long-term workforce planning, making it harder for leaders to implement effective workforce strategies. Nearly 80% of employers find themselves unable to look beyond a 12-month horizon, according to a survey of nearly 700 employers by law firm Lewis Silkin. [CityAM]

Zero net migration to shrink UK economy by 3.6%: The UK economy would be 3.6% smaller by 2040 if net migration fell to zero, forcing the government to raise taxes to combat a much bigger budget deficit, a thinktank has predicted. The National Institute of Economic and Social Research (NIESR) said falling birthrates in the UK and a sharp decrease in net migration last year had led it to consider what would happen if this trend continued to the end of the decade. In this scenario the UK population would stop growing at about 70 million in 2030. The latest official figures showed the UK population was 69.3 million in 2024. [Guardian]
On Wednesday, Oil was trading higher at $66.67. The pound is trading at $1.37, €1.16, and ¥9.52.