Business News Round Up (02/12/2022)
UK inflation expectations have eased, business survey finds
UK businesses expect their selling prices to rise at their lowest pace since the start of the Ukraine war, according to new data from the Bank of England, raising hopes that inflationary pressures may be easing. A monthly survey of chief financial officers from small, medium, and large companies showed that selling price growth expectations for the year ahead dropped to 5.7 per cent in November, from 6.2 per cent in the previous month. The figures, published on Thursday, mark a significant fall from a September peak of 6.7 per cent, reaching their lowest level since February, just before Russia’s invasion of Ukraine sent global gas and commodity prices soaring. The data raise hopes that UK consumer price inflation — which reached a 40-year high of 11.1 per cent in October — will ease in the coming months. Consumer inflation has already begun to fall in the US and the eurozone. “We expect the October figure to be the peak of inflation,” said Gabriella Dickens, senior UK economist at the consultancy Pantheon Macroeconomics. While inflation is unlikely to reach the 2 per cent target next year, prices will remain “firmly on the downward trajectory”, according to the consultancy.
https://www.ft.com/content/70afbaf9-a665-45bc-a3fa-25c9ddaaf852
Scotland must solve its scale-up problem to ensure economic growth
The latest Nations & Regions report released by the British Private Equity and Venture Capital Association (BVCA) last month highlighted company investment across Scotland, identifying the nation as a growing hotspot for private capital activity. Our report showed that £895m was invested into Scottish businesses by private capital firms in 2021, a strong increase on previous years, with £213m and £271m invested in 2020 and 2019 respectively. This investment is powering SMEs across Scotland, with nine out of 10 businesses supported here employing 250 or fewer people. While these are welcome developments, Scotland currently suffers from a gap in support for scale-up businesses – those with strong, often global, growth potential. There’s no doubt that Scotland provides an ideal eco-system for start-up businesses. Through public sector organisations such as Scottish Enterprise and our universities’ incubator hubs, there is strong support to help drive forward innovative business ideas and encourage their growth trajectories. We do, however, often struggle to provide the right environment that will help the best of these businesses ascend to a higher level and achieve global potential. There are, of course, some notable exceptions. Scottish-founded companies such as Skyscanner and FanDuel have, in recent years, achieved unicorn status before respective sell offs to Chinese and US interests. Both do, however, continue to provide a strong economic impact in Scotland, with Skyscanner maintaining its headquarters in Edinburgh, while FanDuel’s base in the capital employs several hundred people.
https://www.insider.co.uk/news/scotland-must-solve-scale-up-28636203
Landmark agreement between Greater Manchester and Innovate UK to boost innovation and R&D in the city-region
Greater Manchester’s burgeoning innovation ecosystem has taken another major step forward with the signing of an agreement with the UK’s national innovation agency, Innovate UK. The Memorandum of Understanding (MOU) between Greater Manchester Combined Authority (GMCA), Innovation Greater Manchester and Innovate UK commits the parties to closer collaboration to support business innovation. The agreement seeks to strengthen research and innovation clusters across Greater Manchester and to accelerate investments around long-term innovation developments. The parties have also agreed to work on a shared plan for the period to 2030, which will set out how the development of innovation assets in Greater Manchester will inform Innovate UK activities. The agreement was signed by Mayor of Greater Manchester, Andy Burnham, Innovate UK CEO, Indro Mukerjee, and Chair of Greater Manchester Business Board (GM LEP), Lou Cordwell, at a special event held today (Friday 2 December) at the Graphene Engineering and Innovation Centre (GEIC) in Manchester. The GEIC is a facility which helps companies develop new technologies, products and processes that exploit the properties of graphene and other 2D materials.
Most change on the FTSE 100 since 2008 highlights ‘unloved’ UK market – RBC Brewin Dolphin
WEIR Group, Beazley, and abrdn’s promotions to the FTSE 100 will make 2022 the biggest year for changes on London’s top index since the great financial crisis, according to research from RBC Brewin Dolphin. The wealth manager’s analysis of additions and deletions from the FTSE 100 found there have already been 12 changes to the index this year – the highest since 2009. When this rises to 15 when the next promotions and demotions take effect, it will be the busiest year since 2007 and 2008 when there were 19. It would also be the second most active year during the past two decades, ahead of 2002 and 2006 when there were 14 changes. The two Scottish companies and Beazley will join Centrica, Foreign & Colonial Investment Trust, and Unite Group among this year’s promotions. Royal Mail (now called International Distributions Services), Hikma Pharmaceuticals, and Howden Joinery are among the 12 companies to already fall out of the FTSE 100 during 2022. Avast and Meggitt were also removed from the index after being acquired by Norton LifeLock and Parker-Hannifin, respectively. Excluding the latest three promotions, over the last 20 years there have been 228 additions and deletions from the FTSE 100. Hikma Pharmaceuticals, Wood, and Tate & Lyle have been promoted and relegated the most times of any companies, with four promotions and four deletions each.