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British Airways has long been the target of customer ire—complaints about service standards, outdated technology and, most recently, contentious changes to its loyalty programme are far from rare.

Yet the carrier, part of the FTSE 100-listed International Airlines Group (IAG), is on course to announce a significant upswing in its fortunes next month. Financial analysts forecast annual earnings before interest and tax of over €4 billion (£3.4 billion) for 2024, aided by the 45 million passengers expected to have flown with BA, a figure close to its record of 47.7 million in 2019.

At the centre of BA’s rebound is chief executive Sean Doyle. His £7 billion investment plan—unveiled a year ago—takes aim at overhauling the airline’s finances, service offering and reliability. Half of that sum goes into acquiring new aircraft, including seven Boeing 787 Dreamliners and 18 777X jets from the Seattle planemaker, though the latter face production hold-ups. Another €2.1 billion is earmarked for IT improvements and engineering upgrades, while €1.4 billion will modernise premium cabins.

It is that premium sector that Doyle is most intent on developing, true to former BA boss Lord (John) King’s philosophy of “premium or nothing.” The plan is to add 20 per cent more premium economy seats, 15 per cent more business seats, and 10 per cent additional first-class spaces over the coming years, while the vast Airbus A380s are set for a refit that will boost premium capacity from 60 per cent to 72 per cent.

BA’s focus on the top end of the market is no surprise, given London’s status as the world’s biggest hub for upmarket international travel. Corporate travel is also on the rise post-pandemic, with estimates from Citi suggesting conferences in the US are once again drawing significant numbers of European business travellers.

However, it is not just about expansion. Doyle is betting on cost discipline, with BA rolling out “zero-based budgeting.” Each item of spending must be justified annually from scratch—a method that can yield savings but risks distracting staff from day-to-day operations. BA aims to save £500 million by 2027 through this approach, even though past adopters, including Kraft Heinz, have seen the pitfalls of poorly implemented cost-cutting.

One of the biggest lightning rods for criticism has been BA’s loyalty programme, which recently announced a shift to awarding points based on the cost of a flight or holiday booking rather than class and destination. This triggered a backlash—most vocally from Great Western Railway boss Mark Hopwood, who warned it could backfire badly by failing to appreciate the power of travellers’ emotions.

Doyle remains unmoved by the outcry, insisting that the changes merely bring fairness to a system that has not evolved in line with modern passenger expectations. He also faces the challenge of turning around perceptions of BA’s IT systems, which have been plagued by failures, including the memorable 2017 fiasco when a contractor accidentally pulled the plug at Boadicea House data centre.

Undaunted, Doyle has pressed ahead with a complete redevelopment of BA’s digital offering, discarding outdated applications in favour of a cloud-based system in partnership with Amazon Web Services. The move is intended to prevent further IT meltdowns and has culminated in a soon-to-be-released website and app, which Doyle promises will be “a complete leapfrog from where we are today.”

The airline’s problems are partly seen as the legacy of decisions made before the pandemic. Álex Cruz, Doyle’s predecessor, was accused of driving down costs too aggressively, resulting in underinvestment in IT, fleet upgrades and product quality. The impact was compounded by the UK’s approach to employment support during Covid, which saw BA lose many experienced staff.

Yet, according to industry observers like Andrew Lobbenberg at Barclays, BA’s key metrics, such as net promoter scores, are steadily improving, even if there remains ample room for progress. Robert Boyle, the airline’s former director of strategy, notes that the BA app—once considered a market leader—has fallen behind its rivals, and reversing this trend will be crucial to maintaining growth and warding off disgruntled passengers.

Meanwhile, macroeconomic headwinds remain a concern. Wars and diplomatic tensions can raise fuel costs, force flight diversions, and wreak havoc on schedules. Engine problems, particularly those involving Rolls-Royce’s Trent series, have already forced BA to curtail once-regular services, including a long-standing route to Kuwait. Such disruptions can be deeply frustrating for a carrier that is finally within sight of surpassing its pre-pandemic performance.

In Doyle’s view, a more dynamic corporate culture will help mitigate future shocks. “We are a much more agile, adaptive and responsive organisation than we were three or four years ago,” he says, confident that BA is now better placed to navigate whatever turbulence lies ahead.

For all the complaints—from loyalty revamps to service hiccups—BA’s surging passenger numbers and financial gains suggest that Doyle’s plan may be paying off. The airline’s next set of results, due shortly, are expected to cement its comeback, even if winning back the hearts and minds of disgruntled frequent fliers may prove to be a slightly longer flight path.

Read more:
Why BA keeps climbing despite the turbulence: inside Sean Doyle’s premium plan

Millions of motorists are poised to receive payouts without having to file a claim, under plans being drawn up by the Financial Conduct Authority (FCA) to address the car finance mis-selling scandal.

The watchdog aims to introduce an industry-wide redress scheme obliging banks to identify and compensate affected customers directly, cutting out claims management companies in the process.

Under current rules, consumers must actively bring forward their own complaints to recoup losses. However, the FCA wants to overhaul this approach, placing the burden on lenders to pinpoint drivers who were sold inappropriate car loans. The initiative follows a year-long investigation into hidden commission arrangements, in which banks allegedly paid car dealers bonuses based on the interest rate they charged borrowers.

While the Supreme Court is expected to rule next month on whether car finance agreements were generally mis-sold, the FCA’s proposed scheme focuses on loans tied to so-called “discretionary commission” arrangements. These deals often incentivised dealerships to push higher interest rates, exposing borrowers to potentially excessive costs.

Several major lenders have already earmarked substantial reserves to handle any fallout. Lloyds and Close Brothers, for instance, have set aside billions and hundreds of millions of pounds respectively to meet potential redress liabilities.

The industry-wide compensation plan is set to be finalised later this year, having been delayed from an initial May timeframe. If implemented, it will be welcomed by consumer advocates who hope that automatic payouts will ensure faster restitution for those who suffered financially under mis-sold car loans.

Molly Preleski, of PA Consulting, said the scheme “should help to ensure that where consumers have lost out, redress won’t be dependent on them taking action to complain,” while also reducing speculative claims made by customers unaffected by these issues.

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Car finance mis-selling: millions set to receive automatic compensation

Large firms are once again pouring resources into cutting-edge product and service development, according to Frazer Bennett, global head of innovation at PA Consulting.

After two years of focusing on cost control, many of the company’s corporate clients are re-engaging with projects designed to fuel growth, Bennett told Business Matters.

“Our pipeline for work in the private sector is twice what it was this time last year,” he said, pointing to renewed appetite for both digital and physical innovation. PA Consulting, which counts Unilever, Diageo, Pfizer and Sanofi among its major clients, is also seeing smaller venture-backed companies ramping up their innovation drives.

Bennett’s remarks come ahead of a speech from the prime minister on Thursday, where he is expected to call for a more “agile and active” state, urging ministers to remove regulatory and procedural barriers that hinder government priorities. Sir Keir Starmer’s comments echo those made by science secretary Peter Kyle, who highlighted the role of innovation in tackling the UK’s productivity challenge.

“There is no route to long-term growth, no solution to our productivity problem, without innovation,” Kyle told a techUK conference on Monday. Bennett agrees, defining innovation as delivering growth by “exploiting discoveries in science, exploiting creativity in design and exploiting innovation in engineering,” while bringing these breakthroughs to market.

Regarding the regulatory environment, Bennett believes that setting clear aims, rather than prescribing implementation details, fosters experimentation and competitiveness: “Regulation is as much a catalyst for innovation as it is a constraint. It is about ensuring that the stringency of that regulation is not so high that it becomes a barrier.”

He added that large companies increasingly seek sustainable materials and deeper digital engagement with customers, rather than mere transactional relationships. With this shift in priorities, competition for skilled talent is likely to intensify. However, Bennett views some constraints as beneficial. “If you just keep funding stuff you don’t necessarily get a good outcome. Creativity loves constraint and it is an important constituent in driving innovation,” he explained.

Read more:
Businesses are embracing new product development after cost-cutting lull

BMW has cautioned that recently imposed tariffs by the United States and the European Union will dent its earnings by at least €1 billion this year, destabilising the already volatile global motor industry.

The warning comes as the German manufacturer, which produces the Mini at its Oxford plant in Cowley, braces for fresh levies on vehicles exported through the US and on China-made electric models.

Oliver Zipse, BMW’s chief executive, described the €1 billion figure as “conservative” but is hopeful not all tariffs will remain in place for the entirety of 2025. On the same day, BMW reported an 8.4 per cent fall in annual revenue to €142.4 billion, blaming “challenging geopolitical and macroeconomic conditions” for its bleak outlook.

BMW’s global footprint includes a major factory in Spartanburg, South Carolina, yet many of its 2 and 3 series and M2 models are produced in Mexico, placing them squarely under scrutiny. Although the US recently suspended tariffs on Mexican imports meeting the terms of its trade pact with Canada and Mexico, some of BMW’s vehicles fail to reach local content thresholds, leaving them exposed to potential new duties.

Around half of BMW’s US-made cars are sent abroad, primarily to Germany, China, Canada and the UK, making the company particularly vulnerable should retaliatory tariffs come into force. Meanwhile, fellow German firm Daimler Truck sounded a similar warning, announcing that trade uncertainties have already weighed on its first-quarter orders. It has responded with a €1.1 billion cost-reduction programme.

These challenges strike just as the automotive sector negotiates a transition from traditional combustion engines to electric vehicles. Last year, some 54,000 jobs were shed by major suppliers, and 2025 forecasts signal no immediate respite for an industry in flux.

France’s finance and economy minister, Éric Lombard, condemned the transatlantic tariff row as “idiotic” and called for dialogue to alleviate tensions. Christine Lagarde, president of the European Central Bank, said the spat has galvanised the EU, describing it as a “big wake-up call” that could strengthen European unity.

However, there is no shortage of hardline rhetoric in Washington. When asked about the possibility of tariffs on cars from all nations, President Trump’s ally, Howard Lutnick, told Fox Business: “That would be fair, right? If you’re going to tariff cars from anywhere, it’s got to be tariffing cars from everywhere.”

Joachim Nagel, president of Germany’s Bundesbank, labelled the US president’s approach “a horror show” that may tip Germany into recession. François Villeroy de Galhau, his French counterpart, argued that the fallout would be global, saying: “It’s firstly a tragedy for the American economy.”

Read more:
BMW braced for €1bn hit as Trump’s tariffs disrupt global car trade

Berkeley Group, one of the UK’s biggest housebuilders, has cautioned the government that introducing another cladding tax will place “significant pressure” on its aim of delivering 1.5 million homes by the end of 2029.

The warning follows industry-wide frustration over mounting costs linked to the remediation of unsafe cladding, first highlighted by the Grenfell Tower tragedy in 2017.

Developers are already contending with a 4 per cent surcharge in corporation tax and the imminent building safety levy—estimated to raise up to £3 billion. The government insists the new charge will speed up necessary repairs, but many property firms fear that further costs and regulations will slow construction at a time when the nation urgently needs more homes.

In its trading update on Friday, Berkeley voiced alarm at the “extent and pace of regulatory changes” in recent years. Citing the soon-to-be-introduced levy, the company said these “incremental” adjustments could undermine the delivery of new homes. That view is echoed by Jennie Daly, chief executive of Taylor Wimpey, who recently warned that yet another “costly requirement” will make it challenging to build quickly and at scale.

Founded in Surrey in 1976 by Tim Farrer and Tony Pidgley, Berkeley built 3,521 homes in its most recent financial year—mostly in and around London. Under chief executive Rob Perrins, it has also been moving further into the rental sector with plans to manage up to 4,000 homes.

Despite the looming cladding levy, Berkeley’s trading statement noted a “modest improvement in sales reservations” over winter, with wage growth, static house prices and improved mortgage deals all luring cautious buyers back to the market. The builder stressed that sustained confidence depends on the course of interest rate cuts and broader economic stability.

The company reconfirmed at least £975 million in pre-tax profit over the next two years, including £525 million in 2025—a rare show of optimism in a sector still grappling with multiple headwinds. Analysts welcomed this “short, reassuring update,” with Berkeley’s shares rising 1.4 per cent to £36.08, although they remain down by nearly 26 per cent year-on-year.

Shareholder returns also remain in focus, with the developer buying back £71.3 million of its own shares since December and preparing to return a further £156 million by September through additional buybacks or another dividend. The next dividend payout of £33 million is due at the end of this month.

Read more:
Extra cladding tax will jeopardise 1.5 million homes target, warns Berkeley Group

President Trump’s second inauguration in a chilly Washington seemed a cause for celebration among Silicon Valley’s elite.

The leading lights of Alphabet, Amazon, Apple, Microsoft, Meta Platforms, Nvidia and Tesla—all dubbed the “Magnificent Seven”—were prominently seated, lured by the president’s promise of deregulation and fresh merger opportunities.

Yet, barely 50 days later, the total market valuation of these seven technology heavyweights has plunged by around $2.7 trillion. The catalyst has been an unsettling combination of recession concerns, fuelled by Trump’s aggressive trade policies, a raft of government job cuts, and underwhelming economic data that revealed weaker-than-expected US job growth in February.

On Monday, the tech-heavy Nasdaq Composite closed down by 4 per cent in its biggest single-day drop since March 2020’s “Black Monday”, when the pandemic sent global markets into freefall. Until recently, investors had spoken freely of a “Trump put”—the assumption that the White House would step in to stem steep market losses—but those hopes are now fading, leaving the sector on shaky ground.

The fallout has been particularly harsh for some billionaire founders. Elon Musk of Tesla, Jeff Bezos of Amazon, and Google’s co-founder Sergey Brin have seen their collective wealth dive by more than $170 billion since the start of the year, according to a Bloomberg analysis. One notable exception is Mark Zuckerberg, the Meta Platforms boss, who has gained just over $4 billion in personal fortune during the same period.

Fresh trade conflicts have also weighed on sentiment, with the US imposing new tariffs on Canadian imports—a move that many see as a sign President Trump is doubling down on his combative approach rather than scaling back. Markets had banked on the administration steering away from further disruptions, but Jim Reid, head of macro research at Deutsche Bank, remarked: “That’s got the market very nervous that perhaps there isn’t a ‘Trump put’ in the way there was in the first term, or at least not yet.”

Compounding the turbulence is concern that the Magnificent Seven have become overvalued thanks to the widespread enthusiasm for artificial intelligence. Nvidia’s forward price-to-earnings ratio, for instance, surged to 32 times early this year before dropping to 23 following the sell-off. A broader retreat in optimism about AI—exacerbated by shock news from DeepSeek in late January—has only added to the pressure.

Tesla has been hit the hardest, shedding $652 billion in market value as slowing demand in China and Europe coincides with a backlash against Musk’s close ties to the White House. For some embattled investors, the hope now is that President Trump backtracks on his more aggressive policies, allowing for a “relief rally” in US equities. Until then, analysts expect the fortunes of the Magnificent Seven—and their billionaire founders—to remain volatile.

Read more:
Magnificent seven lose $2.7 trillion as tech stocks tumble amid Trump’s second-term jitters

Small and medium-sized enterprises (SMEs) in Britain are continuing to repay debt at levels more than 20 times higher than before the pandemic, according to industry data.

The Department for Business and Trade says this illustrates the lack of “competitive downward pressure” on loan prices, prompting it to open a review into the supply of SME debt finance.

Recent figures from UK Finance, which represents leading high street banks, revealed that their net lending to smaller businesses fell by £7 billion last year. Although repayment rates have slowed from the peak in 2022 and 2023, when companies were settling Covid-era loans, the current trend still far exceeds 2019 levels. The government and the British Business Bank (BBB) fear that lingering risk aversion is stifling much-needed business expansion and contributing to Britain’s ongoing productivity issues.

Data from the BBB indicated that only 43 per cent of small businesses accessed external finance in the second quarter of last year, down from 50 per cent in late 2023. Concerned by these figures, the government has called for evidence on barriers to borrowing for underserved groups, such as entrepreneurs with disabilities or those from ethnic minorities. The review will focus solely on debt and will not assess equity finance availability.

Officials note that challenger banks, which must raise wholesale funds at higher costs than the major banks, are left with little room to reduce interest rates for SMEs. Larger lenders, by contrast, benefit from having sizeable deposit bases, giving them a competitive advantage. The Department for Business and Trade hopes the review will pinpoint ways to spur more affordable lending options.

Gareth Thomas, the small business minister, said: “For small businesses, getting off the ground is one of the hardest parts of scaling up and central to that is the ability to access finance. That’s why this call for evidence will be important to allow us to see what more needs to be done to support SMEs so they can go for growth.”

Although gross lending from major banks was up 13 per cent at £16 billion last year, the sector now represents only 40 per cent of the SME lending market, down from 90 per cent in 2008. Challenger banks like Allica and Shawbrook, along with alternative lenders such as ThinCats and iwoca, account for the remaining 60 per cent. Ravi Anand, managing director of ThinCats, commented that companies using debt finance are “seven times more likely to grow than go bust” and called for regulations compelling major banks to direct borrowers towards alternative lenders.

Despite signs of greater high street lending approvals—23 per cent higher for loans and 47 per cent higher for overdrafts in the final quarter of last year—overall take-up of overdraft facilities remains subdued. The government warns that the average approval rate for businesses seeking loans is below 50 per cent, down from 67 per cent in 2019, underlining the scale of the challenge facing smaller enterprises.

Read more:
SME lending review launched amid stubbornly high debt costs

Bernard Arnault, the 76-year-old chairman and chief executive of luxury giant LVMH, is asking shareholders to change the company’s rules so he can remain in charge until he turns 85. The current age limit for the dual role is 80, having already been raised from 75 in 2022.

Arnault has built LVMH into a European powerhouse spanning champagne (Moët & Chandon), fashion (Louis Vuitton) and watchmaking (TAG Heuer). He also owns the French financial newspaper Les Echos. Under Arnault’s leadership, LVMH shares have climbed more than twentyfold over three decades, although the stock has fallen by around one third in the past two years to €606 amid cooling Chinese demand for luxury goods.

The Paris-listed group has outside shareholders who tend to favour clear succession plans. Speculation over who might eventually succeed Arnault has swirled for years. Although he has not explicitly named an heir, each of his five children has a senior role at LVMH. Delphine, 49, heads Christian Dior; Antoine, 47, is group image and environment director; Alexandre, 32, serves as deputy chief executive of Moët Hennessey; Frederic, 30, recently took charge of the Loro Piana cashmere label after running LVMH Watches; Jean, 26, oversees watch operations at Louis Vuitton. Except for Jean, they all sit on the company’s board. The Arnault family controls 48.6 per cent of the business.

LVMH’s lead independent director is Henri de Castries, the former chief executive of insurance giant AXA. Observers note that shareholders value Arnault’s experience and track record, but are also mindful of the potential pitfalls of long-serving leaders, including health concerns, reluctance to embrace new ideas and a lack of strong internal voices to counter the boss’s plans.

Arnault’s personal fortune is estimated at $179 billion, according to the Bloomberg Billionaire Index. He is perceived to be in robust health and has been known to work 12-hour days, sometimes visiting dozens of LVMH stores in one weekend. A person familiar with the group said: “He’s got no plans to go anywhere any time soon.”

However, LVMH now faces fresh headwinds after President Trump threatened last week to impose 200 per cent tariffs on European wine and cognac, an apparent retaliation against EU plans to tax American whiskey in response to US steel and aluminium tariffs. Such a move could affect LVMH exports of champagne labels Krug, Veuve Clicquot and Moët, as well as Château d’Yquem dessert wines and Hennessy brandy. The threat emerged barely two months after Arnault attended Trump’s inauguration in Washington as a guest of honour.

Warren Buffett, now 94, once wrote to Arnault following the previous age-limit increase to 80, saying he believed it remained too low. Buffett has himself faced ongoing questions about who will take the reins at Berkshire Hathaway. LVMH declined to comment on Arnault’s proposed bylaw changes, but a vote is expected at the company’s annual general meeting in Paris next month.

Read more:
Bernard Arnault looks to extend LVMH leadership until he’s 85

The price of gold has surged beyond the $3,000-an-ounce mark for the first time on record, with the spot price climbing 0.4 per cent to hit $3,000.87 an ounce in early Friday trading.

Mounting geopolitical pressures and President Trump’s aggressive trade tactics have rattled investors, sending them scrambling for safety in precious metals.

A sharper focus on economic threats in the United States and abroad has prompted a sell-off in American stocks, leaving the S&P 500 down in correction territory. Gold, traditionally viewed as a safe haven, has now advanced by about 17 per cent this year, setting 13 all-time highs along the way.

“Gold continues to price uncertainty, specifically tariff uncertainty,” said analysts at RBC Capital Markets. “While economic uncertainty is rising, vibes and sentiment are deteriorating, and recession probabilities have risen well above 30 per cent, we still view gold’s price patterns as tied to tariffs.” They noted that “general uncertainty and chaos” were “very supportive factors of gold”.

On Thursday, President Trump threatened to levy 200 per cent tariffs on European wine and champagne in retaliation for a 50 per cent duty the EU plans to impose on American whiskey. The new threat follows Trump’s 25 per cent tariffs on steel and aluminium imports earlier this year.

Han Tan, chief market analyst at Exinity Group, said: “The precious metal still has an abundance of reasons to pursue higher prices, including geopolitical and economic concerns, along with the prospects of Fed rate cuts.” The Federal Reserve is widely tipped to hold interest rates at 4.5 per cent next week, but investors will be watching closely for any signs of future rate policy from Fed Chairman Jerome Powell.

ANZ analysts expect gold prices to climb further, predicting a fresh high of $3,050 an ounce by the end of the year. As investors continue to seek out safe-haven assets, gold looks set to remain centre stage.

Read more:
Gold breaks $3,000 barrier as global uncertainties fuel investor rush

The UK economy unexpectedly slipped into negative territory at the start of the year, underscoring the difficult environment facing Chancellor Rachel Reeves as she prepares her spring statement on 26 March.

According to figures released by the Office for National Statistics (ONS), gross domestic product (GDP) declined by 0.1 per cent in January, reversing a 0.4 per cent gain in December. Analysts had forecast a modest 0.1 per cent increase.

A sharp 0.9 per cent contraction in the production sector drove the overall decline, while construction activity dipped by 0.2 per cent. The services sector, which accounts for around three-quarters of economic output, managed a 0.1 per cent rise in January, easing from 0.4 per cent growth in December. Over the three months to January, GDP still rose by 0.2 per cent compared with the previous three-month period.

Liz McKeown, director of economic statistics at the ONS, commented: “The fall in January was driven by a notable slowdown in manufacturing, with oil and gas extraction and construction also having weak months. However, services continued to grow in January led by a strong month for retail, especially food stores, as people ate and drank at home more.”

Since the October budget, economic growth has trailed expectations, likely compelling Reeves to scale back public spending in order to adhere to her fiscal rules. The chancellor is reportedly looking to reduce welfare payments at a time when the government faces calls to raise defence expenditure, following President Trump’s suggestion that he may roll back US military backing for Europe.

Reeves said: “The world has changed and across the globe we are feeling the consequences. That’s why we are going further and faster to protect our country, reform our public services and kickstart economic growth to deliver on our plan for change.”

Yael Selfin, chief economist at KPMG UK, added: “The upcoming spring statement is unlikely to deliver additional fiscal stimulus for the UK economy. The sluggish growth outlook, alongside competing spending pressures, will force the chancellor to tighten purse strings.”

The Office for Budget Responsibility, the government’s official forecaster, is poised to cut its growth estimates and warn that the public finances remain under acute strain. A steep rise in UK borrowing costs, coupled with tepid economic expansion, has depleted much of the £9.9 billion fiscal headroom Reeves preserved at the last budget.

The latest GDP figures do not take into account President Trump’s imposition of tariffs on certain US trading partners in February and March. Economists caution that his unpredictable policy moves could unsettle global commerce and dampen growth further. Stock markets have already experienced marked drops this month.

Hailey Low, associate economist at the National Institute of Economic and Social Research, urged the chancellor to avoid “frequent policy U-turns [that] risk undermining business and investor confidence at a time when clarity and consistency are most needed”.

The Bank of England, which meets next week, is expected to hold interest rates at 4.5 per cent following an uptick in inflation to 3 per cent in January. Economic performance at the end of last year exceeded the central bank’s forecasts, though the momentum appears to have waned.

Meanwhile, the ONS has postponed publication of its monthly trade figures—ordinarily released alongside GDP data—citing data collection problems. The agency is also facing criticism over a lack of responses to a survey that underpins its monthly labour market report.

Sterling slipped by 0.1 per cent against the dollar to $1.29 and was little changed versus the euro at €1.19 after the release of the latest GDP data.

Read more:
UK economy contracts in January, signalling a tougher spring statement ahead