ISSUE NO. 24 · FRIDAY 4 SEPTEMBER 2026

A tax on hiring the young, an insurer whose profit fell on bonds rather than claims, and a housebuilder whose rescue keeps slipping

Britain has nearly a million young people out of work, education or training, and the tax on hiring them went up. Retailers have absorbed more than £2.3bn since employer national insurance changed, and shed 115,000 jobs in two years. They are not asking for a bailout. They are asking for one threshold to move.

Underneath that sits the thread from yesterday. The bond market repriced, and today it starts showing up in company accounts: Lloyd’s of London made more money underwriting and less money overall, because the investment portfolio took the hit. Crest Nicholson turned a guided profit into a £10m loss while the lender talks that were meant to fix it slipped again. The cost of money is no longer a market story; it is arriving line by line in the results.

Below in full: what retail actually wants from the Budget, why an insurer’s best underwriting in years produced a worse profit, and what a housebuilder’s slipping covenant talks say about the year ahead. After those, the numbers, today’s diary, and one calculator worth five minutes.

Lead

Nearly 1m young people are out of work, education or training. The tax on hiring them went up.

The 2024 Budget lifted employer national insurance to 15 per cent and pulled the threshold down from £9,100 to £5,000. That second change is the one that bites: lowering the point at which the tax starts falls hardest on part-time and entry-level roles, which is precisely the work that gets young people into employment. It has cost retail more than £2.3bn, and the sector has shed 115,000 jobs in two years while putting its own extra hiring costs at £6bn. What retail is asking John Healey for at next month’s Budget is narrow: push the threshold back up to £6,000. Not a rate cut, not a bailout — one number, so that the cheapest job to create stops being the most expensive to tax. Healey has a Budget next month, nearly a million young people outside work or study, and a sector offering to hire them. Read the full story →

The Numbers

Bank Rate is 3.75% into the 17 September decision and CPI is still July’s 2.9%. The employer NI card is today’s lead in two figures — the rate matters less than the threshold underneath it. The index is Wednesday’s settled close, and it has now fallen in three consecutive sessions.

More News

Profit fell 16.7 per cent to £3.5bn. The underwriting business behind it improved.

That gap is the story. Pricing risk and collecting premiums went well: the underwriting result rose to £1.9bn from £1.5bn, with the combined ratio at 90.8 per cent, and gross written premiums grew 6.9 per cent to £34.7bn even as market-wide prices fell 6.7 per cent. Growing premiums into a falling market is hard, and Lloyd’s did it. The damage sat in the investment portfolio, where bond markets turned against a market that holds a very large pile of them. Strip out the investment noise and this was a decent six months at the market’s actual job. The trouble is that the noise is not noise at all — it is a permanent feature of an insurer’s balance sheet, and after this week’s move in gilts it is getting louder. Read the full story →

A housebuilder that expected to make money this year now expects to lose it instead.

Crest Nicholson has cut its earnings guidance to a £10m loss, having previously guided to a profit of between £5m and £10m, and trimmed its build target from as many as 1,500 homes to 1,400. Net debt is guided to between £70m and £90m. The loss is the headline everyone will read; the slipping lender talks sitting underneath it are the actual story. Emergency negotiations over covenant terms have slipped again, months after the group posted a £35m loss in July. A guided profit became a loss, the build target came down, and the fix that was meant to close months ago has moved once more. That is not a bad summer — it is a rescue arriving later than promised, every single time. The covenant talks, not the guidance, decide what this business looks like next year. Read the full story →

The Brief

• OFSI Fines Citi £4.7m Over £19.7m in Payments — what a sanctions breach costs when the regulator does the arithmetic.

On the Diary

• Today, 9.30am BST — Economic activity and social change in the UK, real-time indicators. The fastest series the ONS publishes, and the nearest thing to a live look at spending going into the weekend.
• Today, 9.30am BST — Improving our travel and tourism statistics, September update. Methodology rather than data, but it decides what gets counted from here.
• Monday, 7.00am BST — Lloyds House Price Index. The first house price read of the month, and the one to set against a housebuilder guiding to a loss.

The Toolbox

One tool from the site each issue, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

Employer NI calculator

“If the argument is about where the threshold sits rather than what the rate is, the way to see it is to put your own payroll in and watch what moving £5,000 to £6,000 actually does.”

The Close

Yesterday this was a market story: gilt yields at levels not seen in a generation, and a bond market setting the limits of what a Chancellor can fund. Today it has a set of accounts attached to it. Lloyd’s underwrote better than it has in years and still reported a profit down 16.7 per cent, because it owns a great many bonds and bonds fell. Crest Nicholson is negotiating covenants with lenders who are pricing risk in exactly that repriced world, and those talks keep slipping. Retail, meanwhile, is asking for one threshold to move by £1,000 — the smallest ask in the issue, and the one most likely to decide whether a hundred thousand entry-level jobs come back. Rates move first, results follow, and jobs follow those. We are somewhere in the middle of that sequence, seven weeks from a Budget.

Have a good weekend. Back on Monday with the week in review.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB