Business News Round Up (05/07/2022)
Half of Scots sceptical of meeting 2045 net-zero target
A new survey has found widespread dissatisfaction with Scotland’s and the UK’s existing climate targets, and scepticism that these will be met. Of those expressing an opinion, less than two in five judged Scotland’s 2045 net-zero targets to be ‘about right’, falling to a quarter saying the same of the UK’s 2050 target. The remaining proportions are broadly split on Scotland’s targets, with three in 10 deeming these to be insufficient, while 45% say the same of the UK’s. Conversely, a third of people, and especially older respondents, said that Scotland’s current targets are too ambitious. Respondents reporting a greater knowledge of climate change, however, were markedly more likely to express scepticism at the adequacy of these aims, as were young people, with those aged 16-34 almost twice as likely as the over 65s to say that Scotland’s 2045 target is insufficient. Despite this perceived insufficiency, people are still doubtful that these aims will be achieved: half of Scots have little or no confidence that Scotland will adhere to its targets, rising to three quarters saying the same of the UK. There is a widespread dual-scepticism, with a third of all Scots saying that the UK’s targets are simultaneously inadequate and unlikely to be met. People took an even dimmer view of global prospects, with a staggering 83% expressing little or no confidence that the world will meet its environmental obligations.
Firms shelve investment and likely to lift prices
Companies have shelved plans to invest as confidence in profitability has taken a “significant knock”, according to a new survey. Almost a third (28%) of firms expect profits to fall said the British Chambers of Commerce whose latest analysis showed key economic indicators “flashing red”. More than four out of five of the 5,700 firms questioned cited inflation as a big concern. Two-thirds of firms expect their prices to rise in the next three months. Declining confidence in business performance has affected plans to increase investment, with three in four of those questioned saying they have no plans to do so. Three quarters of companies had no plans to increase investment in machinery or equipment. Shevaun Haviland, director general of the Chambers of Commerce, said: “The red lights on our economic dashboard are starting to flash. Nearly every single indicator has seen a deterioration since our last survey in March. Business confidence has taken a significant hit and fears over inflation and cost pressures are at new record highs. But it is not too late for the Government to take action to help businesses through these challenging times and put the economy on a more stable footing. A cut in VAT on energy bills to 5%, and other steps to relieve the tax burden on firms to encourage investment are crucial. Better infrastructure, a plan to address labour shortages and a unified long-term economic strategy to give businesses more certainty are also needed. The Government must swiftly demonstrate that it is on the side of business if confidence to invest is to be restored. Only then will we be able to return some momentum to the economy and find a pathway through the current difficulties.”
Report reveals London races ahead of global competitors as West End office rents soar
The London Property Alliance has today (4th of July) published the third issue of its quarterly Global Cities Survey. The research, which is undertaken by Centre for London, charts the economic recovery of London, New York, Paris, Berlin, and Hong Kong and provides an analysis of the latest data available across 19 economic and societal indices. This new report reveals London’s economy has put in a strong performance in Q1 of 2022, outperforming competing global cities in areas such as economic output, employment, rental growth, and foreign direct investment. The UK capital recorded its highest employment rate compared to competitors in the first quarter of this year, signalling the city’s economic turnaround. London employment is now more than eleven percentage points ahead of New York compared to 2019 benchmarks. And in a further vote of confidence, London’s West End and City rents (for prime space) rose by 12.2 per cent and 7.7 per cent respectively (Q1 2022 on Q1 2021). But both New York (Midtown) and Hong Kong saw negative growth. Weakening demand is reflected in office vacancy rates for both cities (21 per cent and 10.9 per cent respectively); despite a slight increase, rates of Central London vacancies remain firmly in single digits at just 8.7 per cent.
Wylie & Bisset advises SMEs to adopt ‘trench warfare mentality’ to cope with cost-of-living crisis
With the price of food, fuel, energy, clothes, travel costs and rent continuing to increase as inflation rises, Wylie & Bisset, Accountants and Business Advisors, is advising SMEs to adopt a ‘trench warfare mentality’ and adapt their Covid working from home plans to help employers and employees cope with the cost-of-living crisis. Mark Mulholland, partner in the firm’s Business Advisory department, said: “At the start of the pandemic, SMEs took radical steps to change their business processes by adopting WFH practices and I think they need to revisit that ‘trench warfare’ mentality and adapt their working methodologies to the cost-of-living crisis. We’re actively encouraging staff to WFH over the summer months to enable them to cut down on their travel time and costs, as well as helping with childcare costs over the summer holidays – which can represent a considerable saving – and adopting hybrid working arrangements to give staff more flexibility can help save businesses money over the medium term by potentially reducing space requirements.” Mr Mulholland also notes that there are environmental benefits to be had from WFH, with less commuters travelling to workplaces by car helping reduce air pollution, particularly in city centres.