Inflation sees February fall
Retailers boost wages as competition for workers intensifies
Major UK retailers have increased pay rates in 2025 to attract and retain staff amid rising living costs. Aldi, Lidl, Tesco, and John Lewis offer higher wages for store employees.
Aldi raised its minimum hourly rate to £12.75 nationally and £14.05 within the M25 in March, with further increases to £12.85 and £14.16 set for September. Lidl matched Aldi’s £12.75 national rate and pays £14.00 within the M25, with longer-serving staff earning up to £13.65 nationally and £14.35 in London.
Tesco has invested £180 million in wage increases, setting hourly pay at £12.45 to £12.64 nationally and up to £13.85 in London. John Lewis and Waitrose opted to reinvest £114 million into employee wages instead of offering partner bonuses, setting new shop floor rates at £12.40 nationally and £13.85 in London.
Other retailers making notable pay increases include B&Q (£12.71 nationally, £14.05 in London), Sainsbury’s (£12.45–£12.60 nationally, £13.70–£13.85 in London), and Marks & Spencer (£12.60 nationally, £13.85 in London).
The pay hikes reflect ongoing competition in the retail sector to offer competitive wages and retain workers in a tight labour market.
CityFibre expands UK footprint with Connexin acquisition
CityFibre has acquired Connexin’s full-fibre infrastructure, expanding its presence in Hull and East Riding and adding up to 185,000 premises to its network. The financial details of the deal have not been disclosed.
The acquisition includes Connexin’s existing network, which covers more than 80,000 premises, with plans for an additional 20,000. CityFibre will also take over Connexin’s Project Gigabit contract, delivering gigabit-capable broadband to over 34,000 hard-to-reach premises in Nottinghamshire and West Lincolnshire.
Connexin’s XGS-PON network will be integrated into CityFibre’s wholesale services, with full integration expected later this year. This move aligns with CityFibre’s broader strategy to reach at least eight million premises across the UK.
This acquisition follows CityFibre’s purchase of Lit Fibre in May 2024 and previous deals, including FibreNation from TalkTalk in 2020 and national network assets from KCOM and Redcentric.
Founded in 2011, CityFibre is a fibre-only provider competing with Openreach and Virgin Media O2. The company sees market consolidation as essential for the UK’s fibre rollout.
AI investment key to UK’s economic recovery, says Bank of England chief
Bank of England Governor Andrew Bailey has identified artificial intelligence as a potential driver of long-term economic growth, comparing its impact to past technological shifts like electricity. Speaking at the University of Leicester, Bailey suggested AI could improve national income and help reverse the UK’s sluggish productivity growth.
Between 2010 and 2019, UK productivity increased by just 0.3% annually, far below the pre-2008 financial crisis average of 2%. This has strained public finances, with expected government spending cuts adding further pressure. Bailey emphasised that maximising AI’s benefits will require investment in workforce skills and infrastructure.
His comments come as businesses watch for signals on interest rate policy. The Bank of England has held rates at a 16-year high of 5.25%, despite inflation falling from 11.1% in October 2022 to 3.4% in February 2025. Lower borrowing costs could provide short-term economic relief, but the Bank remains cautious about premature rate cuts.
AI adoption is expected to reshape industries by automating tasks, improving efficiency, and cutting costs. A 2023 PwC report estimates AI could contribute up to £232bn to the UK economy by 2030, boosting GDP by 10.3%. However, concerns remain over its impact on employment and wage distribution.
Yorkshire mid-market businesses remain confident despite rising costs
Mid-sized businesses in Yorkshire are showing increased confidence despite rising employment costs, according to Grant Thornton UK LLP’s latest Business Outlook Tracker.
The survey found that 75% of mid-market firms in the region plan to pass higher employment costs onto customers, up from 71% in December. Many businesses also adjust compensation strategies, including limiting pay rises, reducing bonuses, and reviewing employee benefits.
Despite these cost pressures, 83% of Yorkshire’s mid-sized firms are optimistic about their funding position for the next six months, up from 79% at the end of 2024. This contrasts with large UK corporates, which have reported declining confidence in revenue growth, funding, and overall economic outlook.
Grant Thornton’s Yorkshire and North East Partner, Dan Dickinson, attributes this resilience to the region’s diverse economic landscape and adaptability. He notes that local firms make strategic decisions to sustain growth and remain competitive, positioning them well for future challenges.
Kirklees Council appoints development partner for new housing development
North Leeds pharmacy secures new owners
UK government commits £600m to boost construction workforce
The UK government has announced a £600 million investment to address the construction skills shortage and support workforce development. The funding aims to train up to 60,000 new construction workers by 2029 to meet demand for homebuilding and infrastructure projects.
The initiative includes £100 million to establish 10 new Technical Excellence Colleges and £165 million to expand college construction training. Employers will receive £2,000 for each Foundation Apprentice they take, and £100 million will be allocated to Skills Bootcamps and partnerships between colleges and construction firms. An additional £132 million will fund 40,000 annual industry placements, with £32 million contributed by the Construction Industry Training Board (CITB).
The announcement follows the new Office for National Statistics data, which shows more than 35,000 unfilled construction jobs, with employers struggling to find workers with the necessary skills. The funding is part of the government’s plan to build 1.5 million homes and improve transport and energy infrastructure.
A new Construction Skills Mission Board, co-chaired by government and industry leaders, will oversee implementation. The programme also encourages experienced workers to help train new entrants, ensuring a steady pipeline of skilled labour.
This investment follows recent apprenticeship reforms designed to increase workforce participation and retention. Industry leaders have welcomed the funding, calling it necessary to secure the sector’s future.
CPP Group cuts losses in “pivotal” year
North Yorkshire renewable energy company, Drax sets sights on new acquisition
North Yorkshire-based renewable energy company, Drax has put forward an offer to acquire Harmony Energy Income Trust (HEIT).
Under the terms of the £199.9m deal, HEIT shareholders would receive 88 pence per share.
HEIT, a publicly listed investment trust set up to acquire ready-to-build battery energy storage system (BESS) assets, represents an opportunity to add operating BESS assets to the Drax Group’s FlexGen portfolio.
Norman Crighton, the Non-Executive Chair of HEIT, said: “Since its launch in November 2021, HEIT has assembled a fully operational portfolio of eight 2-hour BESS projects totalling 790.8 MWh / 395.4 MV, which have attracted a strong level of interest through both our recent Asset Sale process and now through a potential bid from Foresight and the recommended offer by Drax.
“The HEIT Board believes that value to HEIT Shareholders will be maximised through the terms of the Acquisition. Further, the HEIT Board believes that the Acquisition will provide HEIT Shareholders with the opportunity to realise the value of their holdings, in cash, at an attractive value which is in excess of the reasonable medium-term prospects for HEIT on a standalone basis as a listed company.”
Will Gardiner, Chief Executive Officer of Drax Group plc, said: “The Acquisition is a significant investment in growing our FlexGen portfolio, supporting UK energy security and delivering a clean power system.
“The Drax Directors believe that adding battery storage to our FlexGen portfolio enables us to provide even more secure power to the country when it is needed. In combination with our long duration storage, flexible generation, demand side response capabilities and renewable generation from biomass, we will be able to supply 4.5GW of dispatchable generation to meet demand.
“As more intermittent renewable energy connects to the country’s network, more dispatchable and reliable generation will be required to help keep the lights on when the wind isn’t blowing or the sun isn’t shining.
“We are working to create value and growth in the short, medium and long-term, aligned to the UK’s energy needs, and which the Drax Directors believe is underpinned by strong cash generation, a disciplined approach to capital allocation and attractive returns for shareholders.”
