Business News Round Up (02/05/2024)
UK economic growth downgraded for next two years
The UK economy is set for “sluggish” growth over the next two years and is likely to miss previous forecasts, according to economists. The Organisation for Economic Co-operation and Development (OECD) has downgraded its UK growth projections for 2024 and 2025, indicating it will witness the weakest growth across the G7 group of major economies next year. The organisation said in its latest economic outlook report there were “some signs that the global outlook has started to brighten” amid easing inflation. Global gross domestic product (GDP) is expected to grow by 3.1% this year, unchanged from 2023. However, the UK’s economy is expected to grow at a much slower rate after interest rate rises in order to bring down inflation. The economic organisation said, “GDP growth is projected to remain sluggish” in the face of a “waning drag from past monetary tightening”.
https://www.business-live.co.uk/economic-development/uk-economic-growth-downgraded-next-29097138
Scottish economy forecast to see slow, steady growth
Scotland’s economy is predicted to see slow but steady growth in the medium term, according to the first Scottish economic outlook report from KPMG. The economic momentum is likely to be propelled by consumer spending thanks to a recovery in incomes and a relatively low propensity to save, but the outlook for business investment is weaker, with uncertainty expected to persist into next year. The forecast shows growth of 0.4% this year, similar to the rest of the UK, with that expected to pick up to 1% in 2025. KPMG aims to produce updated outlooks for Scotland twice a year. Yael Selfin, chief economist at KPMG UK, said: “While our forecast shows weaker growth momentum compared with the pre-Covid decade, there are nonetheless some reasons for optimism. We expect consumer demand to remain relatively solid, while the adoption of new technologies could boost productivity growth in the medium term.”
https://www.insider.co.uk/news/scottish-economy-forecast-see-slow-32711887
North West businesses display resilience as Q1 profit warnings fall by 22%
Profit warnings issued by North West companies have reduced in the first quarter of 2024. New figures from EY-Parthenon’s latest Profit Warnings report reveal that seven profit warnings were issued in Q1, down from the nine warnings issued in the same period last year. Three of the warnings were issued by consumer-facing businesses in the North West, highlighting ongoing consumer confidence challenges, in line with the national trend. The number of profit warnings issued in the region during Q1 2024 equalled the seven warnings issued in Q4 2023. However, the first quarter of 2024 marked the second lowest first quarter total of profit warnings in the North West since 2016, highlighting the recent resilience of the region’s business community. Nationally, in Q1 2024, the number of profit warnings issued by UK listed companies fell 7% year-on-year to 70, and dropped slightly from Q4 2023, when 77 warnings were issued.
New UK tech companies reach five-year high
New UK technology incorporations reached a five-year high in Q1 2024, demonstrating the sustained growth and strength of the UK tech sector. According to analysis by tax and consulting firm RSM UK, the number of UK tech incorporations was up 11% to 13,802 in Q1 2024, from 12,441 in Q1 2023, and rose 4.4% on the previous quarter (13,218). This follows a record-breaking year in 2023 with 51,017 new tech incorporations. London accounted for the highest number of incorporations at 7,253 in Q1 2024, up 16% from 6,278 in Q1 2023. “2024 got off to a great start with the largest number of UK tech incorporations in five years,” said Ben Bilsland, head of technology industry at RSM UK. “UK tech continues to go from strength to strength, despite ongoing macro-economic uncertainty in the UK and overseas. A key factor is the strength in depth of the UK’s tech sector.”