Business News Round Up (04/06/2026)
OECD predicts UK economy to grow less than 1% in 2026
The OECD’s latest Economic Outlook issues a sobering warning for the United Kingdom. Economies across the globe are under pressure but the UK faces a set of acute challenges due to its vulnerability to volatile energy markets and persistently underwhelming productivity growth. As a result, the UK economy faces weaker growth, sticky inflation, and mounting pressure on public finances. The OECD forecasts that the UK economy will slow from 1.4% in 2025 to 0.9% in 2026. It expects only a modest recovery to 1.1% in 2027. Inflation will remain above the Bank of England’s 2% target. Consumer prices are expected to rise from 3.4% in 2025 to 3.7% in 2026, then ease to 2.4% in 2027. Normally, weaker growth leads to lower inflation and interest rates. But the OECD warns that global energy shocks, supply constraints, and geopolitical instability are pushing inflation back up.
BoS: Scottish business confidence edges up to 50 per cent
Business confidence in Scotland rose two points during May to 50 per cent, according to the latest Business Barometer from Bank of Scotland. Companies in Scotland reported higher confidence in their own trading outlook month-on-month, up nine points at 62 per cent. When taken alongside their optimism in the economy, down five points to 38 per cent, this gives a headline confidence reading of 50 per cent, compared to 48 per cent in April 2026. Scottish firms’ confidence in their own trading outlook was driven by stronger customer demand and expected new contracts or clients (70 per cent), while confidence in the economy was driven by stronger customer or market demand (60 per cent). Almost a third (31 per cent) of businesses in Scotland also expect to increase staffing levels over the next year, down four points on last month.
https://www.scottishlegal.com/articles/bos-scottish-business-confidence-edges-up-to-50-per-cent
Tax-related SME borrowing jumps 29% while growth lending softens
New lending data from Funding Circle has signalled a shift in how SMEs use external finance, with borrowing for tax payments, working capital and debt refinancing all rising significantly, while growth-focused lending loses ground. The findings, based on analysis of 2025 data, carry practical implications for accountants and finance professionals advising SME clients, as more businesses turn to credit to manage cash flow timing pressures rather than to fund long-term investment. Borrowing to cover tax payments increased 29% year-on-year to £25 million in 2025. Tax-related lending also recorded the strongest increase in average loan size of any borrowing purpose, up 13% year-on-year, suggesting that SMEs are not only borrowing for tax liabilities more frequently but doing so in larger amounts each time.
Risk warnings deter half of UK adults from investing, Scottish Friendly finds
Half of UK adults say risk warnings on financial promotions put them off investing, new research from Scottish Friendly reveals, as the mutual’s chief executive Stephen McGee backs calls for a more balanced approach to communicating investment risk and long-term opportunity. As part of its latest Family Finance Tracker research, Scottish Friendly found that over half (51%) of UK adults say risk warnings put them off investing in stocks and shares. The findings come amid ongoing industry and regulatory discussion around how investment risk is communicated, including recent FCA commentary encouraging firms to ensure risk communications are clear, balanced and support consumer understanding. Concerns are that overly stark or technical warnings may be reinforcing excessive caution rather than helping people make informed, long-term decisions.