Business News Round Up (07/02/2022)
UK fintech investment hits £27.5bn, a sevenfold increase in just twelve months
UK fintech investment topped $37.3bn (£27.5bn) in 2021, a sevenfold increase compared to 2020, as dealmaking activity soared. Britain has emerged as a hub for fintech investment post-Brexit, with over 600 M&A, private equity and venture capital deals finalised in 2021, up by 27 per cent compared to 2020. The investment total was boosted by a string of high value deals, with five of the ten largest fintech deals in the EMEA region completed in the UK, according to KPMG data. “The UK is a world-leader in fintech, which is good for jobs and the economy,” a spokesperson for the Treasury told City A.M.. “We welcome these figures from KPMG that show how our work to create an environment that supports innovation and attracts investment is paying off.” Britain was a clear front runner in Europe, with the EMEA region attracting a total of $77bn in investment last year, with record levels of funding attracted by Germany, which received $5.4bn and in Ireland, which attracted $1.6bn of investment.
Scottish Coronavirus provisions extended
Six month extensions to some temporary provisions made under UK coronavirus legislation have been laid in Parliament yesterday. The majority of provisions made under the UK Coronavirus Act 2020 came into force on 25 March 2020 and were due to expire this March following a two year period. Of these, five will be retained for a further six months until 24 September 2022. These include powers to make public health protection regulations, enable a wider range of health professionals to give vaccination, and an allowance for the remote registration of deaths and still-births. These provisions are also proposed for longer term adoption in the Coronavirus (Recovery and Reform) (Scotland) Bill introduced to Parliament last week. The remaining 12 devolved provisions in the UK Act will expire on 24 March, including allowances for the emergency registration of nurses and healthcare professionals, and the temporary registration of social workers.
Rising inflation set to hit UK recovery this year, economists warn
Economic forecasting group EY Item Club has cut its forecast for UK economic growth this year to 4.9% from 5.6%. Britain’s economic recovery is expected to slow as consumers start to feel the impact of higher inflation on their wallets, warned economists. In its latest quarterly report, the EY Item Club cut its forecast for UK economic growth this year to 4.9% from 5.6%. The economic forecasting group expects inflation to reach 7% in the spring, its highest level since 1992, meaning a fall in real wages. EY believes the Bank of England will respond to the rise in inflation by hiking its interest rate to 1% by the end of this year, from 0.5% at present following last Thursday’s rise. However, EY said UK GDP grew 7.3% in 2021, above the 6.8% growth it had forecast previously.
How the UK is one of the slowest-growing economies in the G7
At this week’s Prime Minister’s Questions, Boris Johnson repeated his regular claim that the UK is the fastest-growing economy in the G7. Over the past year that is true, but it is not for the most recent quarter or, indeed, since the start of the pandemic. The latest quarterly growth figures actually point to the UK being one of the slowest-growing economies in the G7 (1.1 per cent growth), ahead of only the US and Japan, where growth fell. Since the start of the pandemic, it would also be wrong to claim that Britain has been one of the fastest-growing economies. Indeed, between quarter four of 2019 and quarter three of 2021, GDP fell by 1.5 per cent, the worst performance of any country bar Japan, where growth fell by 1.9 per cent.