Business News Round Up (01/12/2025)
UK growth to slow further as labour market weakens, KPMG predicts
In its UK Economic Outlook report for December, the Big Four accountancy firm predicted that headline GDP would slow from an estimated 1.4% in 2025, before picking up to 1.4% in 2027. KPMG said that higher employment costs have impacted the labour market, along with a slowdown in domestic demand, with the unemployment rate having trended higher over the past year, from 4.4% to 5.0% as of the third quarter. Despite the increase being largely driven by more people returning to the labour market to seek work, redundancy levels have been steady, while job switching remains subdued, reflecting a “climate of caution”, the firm said. “Together, these trends indicate that the labour market has lost some of its previous dynamism. With weaker domestic demand and rising costs, survey evidence suggests that some employers are increasingly turning to artificial intelligence as a means of achieving efficiency savings,” KPMG said.
https://www.investments.halifax.co.uk/research-centre/news-centre/article/?id=21305333&type=bsm
VCT tax relief cut sparks Black Friday stampede
Investors poured money into venture capital trusts (VCTs) following the Chancellor’s decision to cut tax relief from 30% to 20% from April. VCT broker Wealth Club said the amount invested was up 538% on 27 November compared with the average November day last year. Alex Davies, CEO and founder of Wealth Club, said: “The decision to cut VCT relief from 30% to 20% has sparked a Black Friday rush for the top VCT managers. The sudden urgency makes sense. VCTs have limited capacity, and even in normal times top managers often sell out fast. With investors keen to lock in 30% income tax relief before next year, there will be a real “buy it while stocks last” dynamic to the VCT market this year. We suspect this is just the start of the stampede – and we expect demand to remain high for the rest of the tax year.”
Scotland’s £25bn life sciences sector target for 2035 is both ‘proportionate and achievable’
Scotland’s newly announced target of growing its innovation-driven life sciences sector to £25 billion by 2035 is “proportionate and achievable with the right support”, according to a formal NHS partner. The Scottish Government’s refreshed Life Sciences Strategy has set out steps to build the most effective environment and skills base possible across the next 10-years to hit the ambitious target, hand in hand with the use of cutting-edge technologies. The strategy outlines a vision for significantly boosting economic growth and healthcare outcomes by developing, manufacturing, and commercialising life sciences innovation for the benefit of the Scottish population and economy. Launching the strategy, Business Minister Richard Lochhead said the goal was to make Scotland’s life sciences industry “the best in the world”. The sector – which the strategy calls “a cornerstone of Scotland’s innovation economy” – currently generates approximately £10.5bn and supports over 46,000 jobs across pharmaceuticals, health technology, agritech, aquaculture, and biotechnology.
“Greater Manchester is raising the bar on growth” – leaders sign off £400m investment package
A £400m investment in new homes and jobs has been signed off by Greater Manchester Leaders. The Greater Manchester Good Growth Fund is investing in the first wave of 17 priority projects across the city region. Included are regeneration schemes in town centres from Ashton-under-Lyne and Stockport to Oldham and Wigan, and major new developments in Prestwich and Salford Crescent. Getting off the ground in 2026, these 17 schemes are set to bring forward nearly 3,000 homes, more than 22,000 jobs, and 2 million square feet of employment space. They include £17.1m to support development at Wingates, with a new 800,000 square foot logistics hub. This has the potential to create 6,900 jobs and drive forward growth in Bolton town centre.