Business News Round Up (06/01/2022)
UK trade deficit with China triples prompting fears of becoming ‘heavily dependent’ on Chinese goods
The UK’s trade deficit with China has more than tripled in the last year as UK consumers went on lockdown spending sprees while exports the other way fell. Data from the Department for International Trade showed that the UK imported £40.5bn more from China than it exported to the country in the year to June 2021 – up from the £11.8bn deficit in the previous 12 months. Goods imports from China surged by 38% surge while UK exports declined by 34%. According to the China British Business Council (CBBC), the past decade has seen success for British exports to China, which have more than tripled to over £30bn, making China the UK’s third largest trading partner. Indeed, a reordering of trade partnerships has seen China overtake Germany as Britain’s biggest source of imports last year, according to ONS figures reported in the Guardian.
Adoptions of new tech is vital, yet only 20% of SMEs are ‘tech savvy’ according to NatWest
Figures from NatWest’s ‘Springboard to Recovery’ report illustrates that only one in five small businesses are open to digital transformation, despite it making them 2.5x more likely to experience a 20% or more increase in revenue. This data, which included: research from a survey of 1000 small to medium-sized businesses (SMEs), analysis of more than 100 reports, as well as the results of 50 support programmes, found three clear patterns: tech improves a company’s chances of success and their productivity, it correlates with an effective managerial mindset, yet far too few describe themselves as ‘open to innovative technologies.’ It found only 20% of all UK SMEs describe themselves as tech-savvy. Between 2015-19, firms who were open to digital transformation and adopting recent technologies were 2.5x more likely to experience a 20% or more increase in revenue versus firms who were more resistant. If SMEs use two or more technology solutions or tools, they benefit from an average of a 25% increase in productivity.
FTSE 100 falls back below 7500 as UK service sector sees growth slow sharply amid spread of Omicron
The UK service sector saw growth drop sharply last month to the lowest level since last February, but not quite as bad as initially thought. The IHS Markit services PMI fell from 58.5 in November to 53.6, slightly better than the initial reading of 53.2. IHS said the Omicron variant led to a steep fall in spending on face-to-face consumer services, escalating business uncertainty and disruptions due to staff absences. Business activity growth was the weakest since the rebound from lockdown measures began last spring, it added. On a more positive note, job creation remained relatively strong, cost pressures eased from November’s peak and output growth expectations improved slightly. Around 55% of the survey panel anticipate a rise in activity over the course of 2022, while only 10% forecast a decline.
Scottish National Investment Bank invests £20 million to tackle digital inequality
The Scottish National Investment Bank has committed £20m of cornerstone funding to help tackle digital inequality in rural communities and small towns in Scotland. The funding commitment is in addition to the £5m of new investment from the Lothian Broadband Group (LBG) current shareholders – part of the group’s plan to invest £75m to connect more than 70,000 new premises across Scotland during the next four years. LBG has already invested to bring full-fibre broadband across East Lothian. The new money will let the group expand its geographic ambitions, driving further operational scale-up and accelerated fibre deployment in 2022. Eilidh Mactaggart, chief executive at the Scottish National Investment Bank, said: “This investment will support the improvement of digital connectivity in rural and semi-rural areas of Scotland, helping to address inequality of access to digital infrastructure outside of our cities and major towns.”
https://www.insider.co.uk/news/scottish-national-investment-bank-invests-25861272