Business News Round Up (04/09/2026)
UK unemployment to hit 5.4% by 2027 as business investment dips
The British Chambers of Commerce is forecasting unemployment will rise to 5.4% by 2027, business investment will slip, and youth unemployment will peak near 18%, even as its GDP growth forecast edges up slightly to 1% for 2026. Unemployment across the UK is still expected to end 2026 at 5.0% (down from 5.2% in the previous forecast) and then reach 5.4% in 2027. The BCC highlighted that youth unemployment remains a real cause for concern for the UK economy. It is expected to reach 16.6% by the end of this year (down from 16.9% in the previous forecast), before peaking at 17.6% in 2027. Meanwhile, growth in average earnings is forecast to hold steady at 3.75% in 2026 and 2027, as firms face squeezed margins. GDP growth is forecast to grow 1% in 2026, though higher energy and business costs are expected to keep growth weak through next year.
£52m funding released to Scotland’s regional leaders – will support job creation and economic growth
Scotland is to benefit from £52.1m from the Local Growth Fund’s £140m initiative, set to drive regional growth and improve living standards. The fund targets Scotland’s Regional Partnerships that contain the areas with the lowest gross disposable household Income (GDHI) per capita. Scottish secretary Douglas Alexander said: “The UK Government is committed to empowering local communities by spreading power throughout the country. These funds will support local leaders throughout Scotland to create skilled jobs, help start-up businesses and revive our local high streets. “After months of close working directly with regional partners across Scotland, the UK Government is now releasing £52.1m directly to regional leaders who know their communities best so delivery can begin.” This funding targets the Scottish Regional Partnerships that contain the communities that need it most – areas like West Dunbartonshire, North Ayrshire, Dundee, Clackmannanshire and Fife – which have lower GDHI than other parts of Scotland.
UK start-up pipeline falls short as business closures leave £3.3bn turnover gap
The UK is in need of a stronger pipeline of new businesses to offset the economic value being lost as established firms leave the market, according to the latest Cynergy Bank Business Births and Deaths Index. The Index, based on the latest ONS data for January to June 2026, shows new businesses generated £47.8bn in turnover during H1, while businesses that closed accounted for £51.2bn. The £3.3bn gap suggests that the current flow of new firms are not yet sufficient to replenish the revenue and productive capacity being lost as established businesses leave the market. The same pressure was visible in employment. New businesses created 411,962 jobs in the first half of 2026, while closures accounted for 459,463 jobs lost, leaving a net employment deficit of 47,501. The shortfall comes as the UK labour market continues to show signs of softening, with falling vacancies and more cautious hiring plans.
Craft and side hustle workers offered route to market
Scotland’s makers, designers and product entrepreneurs are being offered a new route from an idea or side hustle to a sustainable business with the launch of Makerteers, a free six-month venture-building programme. Launching in Glasgow and Edinburgh, Makerteers is backed by the Scottish Government’s Ecosystem Fund. The first programme will support 40 participants, with all workshops, expert sessions, resources and programme support provided free of charge. Despite estimates that the country boasts more than 2,500 makers and craft businesses, Craft Scotland’s 2023 Sector Report found that 77% of makers had net income below £19,999 from craft-related activity, while 59% said they needed marketing support and 56% wanted business advice. Makerteers’ founders believe the programme can help create more product-focused Scottish businesses, but also help them grow and build a stronger community in which makers share contacts, knowledge, suppliers and experience.