Business News Round Up (07/01/2025)
Scottish businesses’ growth expectations merry and bright for 2025
More Scottish businesses are expecting turnover and profitability growth in 2025 than they did entering 2024, new research from Bank of Scotland’s Business Barometer reveals. 73% of firms expect to see their turnover increase in the year ahead, up from 60% polled in December 2023. 23% of these expect to see their revenue rise by between six and 10% over the next 12 months, with just 21% expecting it to grow by even more. Meanwhile 70% of businesses are confident they will be more profitable in 2025. This compares to 68% who said the same last year. While general revenue and profitability growth is firms’ top priority at 52%, 40% said they will be targeting improved productivity, and the same proportion said they will be aiming to enhance their technology or upskill their staff (both 29%). More than a fifth (22%) want to improve their environmental sustainability.
UK economy could rebound by 1.7% in 2025 but geopolitical issues loom large
As the UK looks ahead to more growth in 2025, the year could bring renewed challenges from a higher pace of inflation, increased trade frictions, and a heightened state of economic uncertainty. The ultimate impact will depend on policy responses and the interplay of these trends on a global scale according to the latest KPMG Economic Outlook. Buoyed by a looser monetary and fiscal policy stance, growth in the UK economy may stage a welcome recovery after a lacklustre performance in the second half of 2024. GDP growth could more than double from 0.8% in 2024 to reach 1.7% this year. Meanwhile, UK consumers could ramp up the pace of spending after a cautious recovery last year which saw many continuing to prioritise savings. As household incomes continue to be boosted by robust pay growth, increases in disposable incomes could translate into a 1.8% increase in consumer spending this year.
https://kpmg.com/uk/en/home/media/press-releases/2025/01/uk-economy-in-2025.html
Retailers give backing to ‘imperfect’ Scottish Budget
The Scottish Retail Consortium (SRC) has published a five-page assessment of the draft Budget, which it sent last week to Holyrood’s finance committee and Scottish government ministers. It praises decisions to scrap the mooted business rate surtax on grocers, freeze the basic property rate and fund action to combat shop theft, while ruling out increases in income tax and not applying fair work conditionality to business rate reliefs and licences to trade. However, it criticises the Budget for not including measures to reduce the cost of running a retail business, for increasing business rates for medium-sized and larger shops and for not including rates relief for smaller stores. SRC’s submission also voices scepticism over plans to consider additional tax powers for local authorities.
https://www.scottishfinancialnews.com/articles/retailers-give-backing-to-imperfect-scottish-budget
Scottish commercial property investment exceeds £2 billion during 2024
Investment volumes in Scotland’s commercial property market bounced back last year, up 30% on the previous 12 months, as interest rates began to fall, and a decisive election result boosted the UK’s status as a safe haven. Total investment surpassed £2 billion for the year (£2.027 billion), according to Knight Frank analysis of Real Capital Analytics (RCA) data – significantly ahead of 2023’s £1.5 billion and slightly ahead of the £1.9 billion five-year average. Investment increased across all major commercial property asset types. Hotels had a particularly strong year, more than doubling on 2023 with a rise from £236 million to £488 million – a five-year high. Edinburgh accounted for more than half of hotel deals, at £247 million. Meanwhile, offices also saw a significant increase from £368 million to £509 million, as interest in the sector picked up.