Business News Round Up (23/04/2026)
Jobless rate falls but due to rise as demand slows
Unemployment unexpectedly fell in the three months to February, though the disruption caused by the Iran conflict is likely to see it rise again in the coming months. The jobless rate fell to 4.9% in the period, which surprised analysts who were predicting the rate would remain unchanged at 5.2%. However, the figures from the Office for National Statistics (ONS) showed that the number of workers in payrolled employment slipped by 11,000 in March, the first piece of data that covers the period of the Iran war. The ONS also said that wages rose at an annual pace of 3.6% between December and February, the weakest pace since late 2020. However, despite the slowdown, pay is still rising faster than inflation. Yael Selfin, chief economist at KPMG UK, said the jobs market “showed signs of stabilising in February, but a reversal may be on the horizon.
Skills shortages threaten mid-market growth in North West, latest data reveals
22% of mid-sized businesses in the North West say difficulties recruiting and retaining people with the right skills is one of the biggest barriers to growth over the next six months, according to the latest research from BDO. Despite the Government figures published yesterday which show unemployment levels unexpectedly fell to 4.9%, the bi-monthly survey of 500 mid-sized businesses has revealed that skills gaps are prevalent in other areas of the UK, with 37% of businesses in the Midlands citing skills shortages as a key constraint on growth. Other regions struggling include the South West and Yorkshire, where a third of firms highlighted this as a barrier to growth, underlining the widespread nature of the issue across England’s regional economies. Looking across sectors, retail (32%), hospitality and leisure (32%) and manufacturing (30%) businesses are all struggling to find and keep staff with the right skills.
Fraser of Allander Institute downgrades Scotland’s growth forecast
Recent data has remained positive for the Scottish economy, but the outlook for future growth is being dampened by the ongoing conflict in the Middle East, according to the Fraser of Allander Institute. In its latest Quarterly Economic Commentary, the Institute has downgraded its 2026 growth forecast from 1.1% (February 2026) to 0.9%. Despite this revision, growth expectations remain positive over the medium term, with GDP growth forecast at 1.0% in 2027 and 1.1% in 2028. While recent indicators suggest the economy has maintained momentum, experience from previous shocks highlights that the full effects of geopolitical disruption often emerge gradually, as pressures feed through energy markets and prices.
UK borrowing lowest for three years but Iran War clouds outlook
Annual UK government borrowing has fallen to a three-year low, but analysts do not expect the improvement to last because of the impact of the Iran war. Borrowing, the difference between spending and income from taxes, fell £19.8bn to £132bn in the year to March, the Office for National Statistics (ONS) said, the lowest since 2022-23. The total was slightly below the £132.7bn that had been predicted by the government’s independent forecaster, the Office for Budget Responsibility. However, analysts say borrowing could worsen this year if inflation picks up and if the government offers to support to some households to cope with higher energy bills. Since the outbreak of the US-Israeli war with Iran, energy prices have surged due to the effective closure of the Strait of Hormuz – a key waterway with usually carries about 20% of the world’s oil and liquid natural gas supplies.
https://www.bbc.co.uk/news/articles/ckge5291152o