Introduction: Reeves to call for rapid AI adoption and deeper ties with EU
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
While the UK economy is being buffeted by the energy shock from the Iran war, chancellor Rachel Reeves is hoping that rapid take-up of artificial intelligence and deeper ties with the European Union can deliver growth.
Reeves is due to deliver a big set piece speech in London today – the Mais Lecture, at Bayes Business School. And she’s expected to identify innovation and AI, closer ties with Europe, and regional growth as three big opportunities for economic growth in the UK.
The annual Mais Lecture is a set-piece event for central bank governors, chancellors and prime ministers to set out their economic philosophy.
This will be the chancellor’s second Mais Lecture – in 2024, Reeves warned that the UK was entering an “age of insecurity” marked by stalling growth, stagnant living standards, political turbulence and global shocks.
Two years on, and plenty of global shocks later, Reeves will today pledge that the UK will adopt AI faster than G7 rivals, and announce £2.5bn of funding for AI and quantum computing.
In her lecture at lunchtime today, the chancellor is expected to say:
“In this changing world, Britain is not powerless. We can shape our own future. Our method is stability, investment and reform – through an active and strategic state.
“Today, I am making three big choices on the greatest growth opportunities for Britain in the decade to come: growth in every part of Britain, AI and innovation, and a deeper relationship with the EU.
“Our plan is clear. To build for growth, to champion innovation, and to make Britain the place where the industries of the future are created.”
And on AI, she will argue that Britain “cannot afford to stand still” in a world defined by technological change.
I’ll be at the Bayes Business School later today for full coverage of the lecture.
The agenda
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10am GMT: ZEW Economic Sentiment Index
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1.30pm GMT: The Mais Lecture 2026, delivered by Rachel Reeves, Chancellor of the Exchequer.
Key events
Photograph: Graeme Wearden
Over at Bayes Business School in the City of London, guests are arriving for Rachel Reeves’s Mais lecture, due to start in 45 minutes.
They’re mingling over sushi, pastries, sliced meat, fruit and cheese.
MPs ask Lloyds how customers saw other users’ data
Parliament’s Treasury Committee are demanding answers from Lloyds Banking Group about the IT glitch which allowed some customers of Lloyds, Halifax and Bank of Scotland to see other users’ transactions.
Dame Meg Hillier, chair of the Committee says the incident appears to be an ‘alarming breach of confidentiality’ (indeed!) and is seeking further clarity on what happened.
In a letter to Lloyds, Dame Meg wants to know how many cutomers were affected by last week’s incident, what information was revealed, and what compensation will be paid.
She asks:
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Please can you provide the Committee with an overview of the incident, including the channels (e.g. app, internet banking) and brands that were affected by this incident. This should include a timeline of your response;
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A description of the information that has been incorrectly presented to people other than the correct account holder, including whether it was limited to just information about transactions or whether other personal information, including National Insurance numbers, was released;
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Whether it is possible to identify those whose information has been incorrectly passed on to others, and if so, how you will communicate with those customers;
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The number of customers that have been affected by the incident. This should be separated into the number of people who saw other people’s information, and the number of people whose information was erroneously provided to others, if possible;
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What steps you are taking to encourage those who may have taken copies of data to which they were not entitled to delete it;
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The amount of compensation that Lloyds Banking Group has so far paid related to this incident and to how many people, and whether Lloyds Banking Group will be proactive in providing compensation to those who may at present not know they have been a victim of this data breach;
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When Lloyds Banking Group first informed the Financial Conduct Authority and the Information Commissioner about this breach;
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Your initial explanation of the reason for this failure of data protection.
Dr Eleanor Crane, assistant professor in Quantum Computing at King’s College London, has welcomed the government’s pledge of £2.5bn for AI and quantum technologies, saying:
“This investment will provide an incredible boost to quantum research, and will enable the UK to keep its longstanding role at the forefront of quantum computing.”
But…. challenges need to be overcome to drive quantum computing in the UK, Dr Crane adds:
“The challenges which need to be overcome to drive quantum computing in the UK are: creating attractive positions for lecturer and professor level positions in quantum computing for internationally renowned scientists (further to the existing positions in quantum sensing and communications), and finding ways to enable widespread collaboration with leading European countries in quantum who have an aligned vision of the future such as France, Germany, Spain, Finland and Austria.”
Here’s the chancellor’s message on AI:
This government will make the UK the best place in the world for quantum and AI companies to start, scale and stay.
In a changing world, our economic plan is the right one.https://t.co/CnW6Kw7sA1
— Rachel Reeves (@RachelReevesMP) March 17, 2026
Many medium-sized UK firms have already turned to AI, new research shows.
AI adoption among mid-sized firms has jumped from 35% to 55% over the last two years, a survey conducted by the Centre for Economics and Business Research (Cebr) on behalf of HSBC UK has found.
This increase is due to AI offerings such as large language models, advanced analytics and workflow automation entering the mainstream, CEBR says.
Nina Skero, chief executive at Cebr, explains:
“Our findings show AI is beginning to influence productivity outcomes in the UK mid-market in a meaningful way.
“However, productive adopters remain a minority within the mid-market. That suggests there is still significant headroom for gains across the sector. If more firms move from initial adoption to deeper integration, the aggregate impact on UK productivity and national output could be substantial by the end of the decade.”
HSBC UK has launched a scheme called the AI & Productivity Financing Initiative, which will provide £5bn of lending to help UK businesses invest in “essential, future-ready capabilities”.
Over in Germany, investor morale has tumbled as the Middle East conflict has threatened to push up inflation and derail Germany’s economic recovery.
The ZEW economic research institute’s monthly gauge has plummeted to just -0.5 points in March, down from 58.3 points in February.
Economists had expected a smaller fall, to 39 points.
Insolvencies jump as debt relief orders hit record
The number of people in England and Wales falling into insolvency has jumped.
There were 11,609 individual insolvencies registered in England and Wales in February, the Insolvency Service has reported this morning. This was 18% higher than in February 2025 and 6% higher than in January 2026.
There were a record number of debt relief orders (DROs), under which people can have debts of up to £50,000 written off, with restrictions.
Here’s the details:
The individual insolvencies consisted of 768 bankruptcies, 4,210 debt relief orders (DROs) and 6,631 individual voluntary arrangements (IVAs). The number of DROs in February 2026 was a record high in the monthly time series going back to their introduction in 2009, exceeding the previous high of 4,185 in August 2025.
The number of IVAs was higher than both January 2026 and the 2025 monthly average. Bankruptcies were 25% higher than in February 2025, although numbers were affected by the clearing of a backlog following the Insolvency Service moving to a new case management system.
The number of registered company insolvencies in England and Wales has jumped month-on-month, but was lower than a year ago.
The Insolvency Service has reported that 1,878 companies fell into administration or were liquidated in February, 7% higher than in January. On the upside, though, that’s 7% fewer than in February 2025.
Moneyfacts: ‘Trumpflation’ adds almost £800 to average annual mortgage bill
The spectre of ‘Trumpflation’ is looming over Rachel Reeves’s Mais lecture today.
The jump in energy prices, and expectations of higher inflation, have driven up mortgage rates since the Iranian war began.
Data provider Moneyfacts has reported that this has added almost £800 to average annual mortgage bill in the last two weeks.
They report:
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Average 2-year fix has risen from 4.83% at the start of March to 5.28% today. It’s highest since April 2025.
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Average 5-year fix has risen from 4.95% at the start of March to 5.32% today. It’s highest since February 2025.
Adam French, head of consumer finance at Moneyfacts, said:
“War in the Middle East has added almost £800 to a typical annual mortgage bill in just two weeks, which will be unwelcome news for anyone currently seeking a fixed rate deal.
“The average two-year fixed rate has jumped from 4.83% at the start of March to 5.28% today – its highest level since April 2025. The average five-year fix has risen from 4.95% to 5.32%, now at its highest since February 2025. For a borrower with a £250,000 mortgage over 25 years, that equates to paying £788 more per year on a two-year fix, or £651 more on a five-year deal compared to just a fortnight ago.
“Choice continues to fall as lenders pull deals and reprice in response to rapidly rising funding costs with 689 fewer mortgage products available since 9 March – almost a tenth of the market. Borrowers may need to brace for further volatility in the weeks ahead as the global economy braces for a ‘Trumpflation’ wave flowing from the US and Israel led action in Iran.”
Julia Kollewe
Oil and gas prices have risen again after Iran carried out attacks on production facilities for the first time since the start of the war with the US and Israel.
Brent crude, the international benchmark oil price, is up 4% at $104.17 a barrel this morning, nearly 50% higher than levels before the war began on 28 February. European wholesale gas prices are up 3% to €52.45 a megawatt hour, compared with about €30 before the war.
For the first time, Iran successfully targeted oil and gas production facilities, rather than just refineries, terminals and storage.
The United Arab Emirates said a drone struck the Shah natural gasfield – one of the largest in the world – on Monday and set it on fire. Operations remained suspended on Tuesday while officials assessed the damage.
The UK government’s push to adopt artificial intelligence systems faster than the rest of the G7 could raise concerns that Britain could face an early wave of AI-related job losses.
But Treasury minister Dan Tomlinson has tried to downplay to prospect of job losses caused by AI, arguing that it’s important to embrace new technologies rather than run away from them.
Asked whether he accepted AI adoption would lead to job losses, Dan Tomlinson told Sky News:
“In the vast history of the UK economy, when big shocks come, when you have the Industrial Revolution, or big changes in the technology that people use, there are changes to the amount of jobs that happen in the economy, or the types of jobs that we have, you don’t see job losses overall.
“And actually, if you look at the next five years, the Office for Budget responsibilities say that employment is going to increase in every single year of their forecast.”
Overnight, the Reserve Bank of Australia became the first central bank to raise interest rates since the Iran war began.
The RBA lifted its cash rate target to 4.1%, back to where it was in February last year.
Michele Bullock, the RBA governor, said strong growth in employment and spending had kept upward pressure on prices and the war in Iran would only worsen the problem.
“High petrol prices will add to inflation, but they’re not the reason for today’s decision.
“Inflation was already too high.”
It’s a busy week for monetary policy decisions, with the Bank of England, the US Federal Reserve, the European Central Bank and the Bank of Japan all setting interest rates this week, along with other central bank decisions in Canada, Brazil, Russia, Switzerland and Sweden.
Reeves to push for “Silicon Valley of Europe” in Oxford-Cambridge corridor
Chancellor Rachel Reeves will also announce she is ready to use compulsory purchase powers to force through the building of “the Silicon Valley of Europe” in a corridor between Oxford and Cambridge, the Financial Times are reporting.
According to the FT:
Reeves will tell landowners they will not be allowed to stand in the way of the project, which she is putting at the centre of a revamped growth strategy alongside closer relations with Europe and investments in AI.
The chancellor would say in her Mais economics lecture that the government will intervene where landowners are deemed to be blocking developments or insisting on unreasonable demands, government officials said.
UK building materials supplier Travis Perkins has cautioned this morning that it faces a ‘subdued’ trading environment.
In its full year results for 2025, Travis Perkins reported that the weakness seen in the final three months of the year has continued in 2026, saying;
The trading environment since the start of the year has remained subdued and this reflects a continuation of the weak UK construction activity figures reported for the final quarter of 2025.
The company, which provides building materials to professional builders and tradespeople, also reported a drop in adjusted operating profit to £133m, from £152m in 2024, “reflecting lower margins in Merchanting”.
Reeves told to stop blaming Brexit for economic woes
There’s already a backlash to the chancellor’s Mais speech, before she’s even taken the lecturn at Bayes Business School.
The opposition Conservative parry is unhappy that Reeves is expected to blame Brexit for the UK’s poor economic performance.
Shadow chancellor Sir Mel Stride has accused the chancellor and prime minister of wanting “to row back on Brexit”, Sky News report.
Stride added:
“Labour are desperate to blame anyone but themselves for their economic failures.”
Reeves could cite the Office for Budget Responsibility’s long-term forecast that Brexit will reduce the UK’s long-run productivity by 4% relative to remaining in the EU.
Critics of the chancellor, though, could point to her tax rises on employer, which appear to be pushing up unemployment.
£2.5bn boost for AI and quantum
Here’s a breakdown of the £2.5bn funding package for artificial intelligence and quantum computing in the UK:
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A £500m Sovereign AI Fund is set to be launched in April at Wayve, to give British companies access to funding, compute and other support
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£2bn to upgrade the UK’s quantum capabilities, including a procurement programme worth up to £1 billion to procure commercial-scale quantum computers.
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An extra £13.8m will be injected into the UK’s 5 National Quantum Research Hubs
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A further £12m for a edicated commercialisation skills centre to help quantum researchers translate their work into ‘real-world impact’
Yesterday, technology secretary Liz Kendall said the government hoped to retain homegrown quantum startups, engineers and researchers rather than lose them to competing countries.
Introduction: Reeves to call for rapid AI adoption and deeper ties with EU
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
While the UK economy is being buffeted by the energy shock from the Iran war, chancellor Rachel Reeves is hoping that rapid take-up of artificial intelligence and deeper ties with the European Union can deliver growth.
Reeves is due to deliver a big set piece speech in London today – the Mais Lecture, at Bayes Business School. And she’s expected to identify innovation and AI, closer ties with Europe, and regional growth as three big opportunities for economic growth in the UK.
The annual Mais Lecture is a set-piece event for central bank governors, chancellors and prime ministers to set out their economic philosophy.
This will be the chancellor’s second Mais Lecture – in 2024, Reeves warned that the UK was entering an “age of insecurity” marked by stalling growth, stagnant living standards, political turbulence and global shocks.
Two years on, and plenty of global shocks later, Reeves will today pledge that the UK will adopt AI faster than G7 rivals, and announce £2.5bn of funding for AI and quantum computing.
In her lecture at lunchtime today, the chancellor is expected to say:
“In this changing world, Britain is not powerless. We can shape our own future. Our method is stability, investment and reform – through an active and strategic state.
“Today, I am making three big choices on the greatest growth opportunities for Britain in the decade to come: growth in every part of Britain, AI and innovation, and a deeper relationship with the EU.
“Our plan is clear. To build for growth, to champion innovation, and to make Britain the place where the industries of the future are created.”
And on AI, she will argue that Britain “cannot afford to stand still” in a world defined by technological change.
I’ll be at the Bayes Business School later today for full coverage of the lecture.
The agenda
-
10am GMT: ZEW Economic Sentiment Index
-
1.30pm GMT: The Mais Lecture 2026, delivered by Rachel Reeves, Chancellor of the Exchequer.
