Business News Round Up (03/10/2025)
Falling confidence in the economy sees consumers cutting back
Consumer confidence in the UK economy fell during the last quarter, reaching the lowest point so far this year, according to KPMG’s Consumer Pulse survey. KPMG’s poll of 3000 UK consumers saw the number of people feeling that the economy is worsening increase from 51% to 62% in the last three months – and up from 43% since 2025 began. As has been the case throughout 2025, the majority (58%) of consumers continue to feel financially secure, with no change since the last quarter. But due to a perception that the UK economy is worsening, consumers say they are reducing or deferring spending. Of those who agreed that the UK economy is worsening: 56% say they are cutting spend on everyday items (up from 51% last quarter); 38% are deferring big ticket purchases (up from 35% last quarter); And 38% are saving more as a contingency (up from 36% last quarter).
Vat rebate would add £457m in tourist spending
Restoring tax-free shopping in Scotland for overseas visitors would generate £457 million a year in additional spending and create more than 9,000 jobs, according to new research. Businesses gathering in Edinburgh today will hear the full cost of axing the VAT relief for tourists and how its reinstatement could boost the economy. Figures from the Association of International Retail (AIR) show that an 11% projected rise in spending would not only boost retailers, but the entire tourist economy, including hotels, restaurants, tourist attractions, museums and galleries, taxis and transport. This would create 9,140 jobs. Over 500 business leaders, including those representing leading Scottish brands such as Hamilton & Inches, the Scottish Whisky Association and Laings, are now calling for a rethink on the policy, arguing that as well as retailers the entire tourist economy has been affected.
OBR hands Rachel Reeves first damning pre-Budget report on UK economy
The Office for Budget Responsibility (OBR) has handed Chancellor Rachel Reeves its first evaluation of the state of the UK economy and crippled public finances, setting policy discussions about likely £30bn tax rises and possible savings in motion. The OBR’s Budget Responsibility Committee, which consists of the economists Richard Hughes, David Miles and Tom Josephs, are expected to warn the Chancellor that the UK’s outlook is significantly worse than assumed in March. Its downgrades for productivity and revisions on calculations for supply-side effects of policy are expected to contribute to a £30bn hole in public finances. Higher debt interest payments – due to 30-year gilt yields rising by over 40 basis points since the last Autumn Budget – and U-turns on welfare savings made at the Spring Statement are likely to add to costs faced by Reeves.
Grant Thornton: Scotland’s private sector thrives with record £40bn turnover
A new report from Grant Thornton UK has revealed that Scotland’s private businesses are experiencing a landmark year of growth, with a record number reporting turnover above £300 million. Scotland LTD showcases a landmark year of growth for the country, driven by the Top 100 privately owned companies. Together, these businesses generated a combined turnover of £40 billion, employing 146,000 people across the country. Now in its eleventh year, the report forms part of a nationwide series celebrating the achievements of privately owned businesses across the UK by region. In 2025, 29 Scottish-based companies reported turnover above £300m – the highest since the report’s inception in 2014. Only 21 companies reported EBITDA below £10m, underscoring the strong profitability profile of the country’s private sector.