The cost-of-living crisis continues to dominate UK boardrooms as the most pressing concern, but tariff fears from US policy shifts are also prevalent, according to the latest risk index from Gallagher.
For the third consecutive year, it was ranked the top risk by business leaders, with 26% identifying it as the primary threat to their operations in 2025.
The index pointed to persistent inflation (cited by 56% of respondents), unstable economic conditions (33%), and changes to national insurance (NI) contributions (22%) as the key drivers behind this concern.
Meanwhile, nearly half (47%) of business leaders also identified increased NI contributions as the main cause for concern around salary costs. This development suggests the impact of government policy on payroll is influencing broader operational decisions.
Although salaries have become a significant focus, issues relating to talent retention and availability have declined in priority. Both risks were rated higher in 2022 and 2023, as firms emerged from pandemic-related disruption.
Cyber-crime has continued its upward trajectory as a leading risk. Four in ten respondents (40%) linked this to growing dependence on technology, while 39% associated their concerns with increasing levels of crime and a perceived fall in the effectiveness of crime prevention.
Rising concerns around cyber-crime have also led to measurable impacts on insurance coverage. In the UK retail sector, some businesses have experienced premium increases of up to 10% following a series of cyberattacks on major brands.
Beyond Gallagher’s index, cyber incidents, including data breaches and ransomware attacks, are now viewed by many as the most significant global threat to business operations. Recent rankings placed cyber ahead of other traditional risks such as business interruption and natural catastrophes.
Neil Hodgson (pictured above), managing director of risk management at Gallagher, said the cost-of-living crisis continues to influence spending behaviour despite the absence of a formal recession.
“NI contributions are very much a theme being reported as impacting on expansion plans with many firms saying the impact on salaries is a major issue for them. This is also evident in the current cooling of the jobs market and the knock-on effect it is having on the availability of new jobs as firms try to make the books balance,” he said.
Concerns over US tariffs emerged in the index for the first time, following policy changes introduced after the US elections in November 2024. One in five business leaders listed this as a trading risk, particularly in sectors such as retail, transport, and manufacturing. Tariffs were cited as contributing to growing uncertainty for firms involved in cross-border activity.
The data also show that risk perceptions differ depending on company size. Larger businesses most frequently identified cyber-crime as their top issue, with 31% ranking it highest. Smaller firms were more concerned with the cost of salaries, suggesting that rising labour expenses have a proportionally greater impact on smaller operators with tighter margins.
“Risk management is key for firms when it comes to preventing a cyber-attack and businesses should with a cyber specialist to help protect their business,” Hodgson said. “Insurance is readily available if they do fall victim to an attack and will not only protect firms against loss revenues, it will also help the business get back up and running securely.”
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