Business News Round Up (07/10/2025)
British Business Bank ramps up response as venture capital market remain ‘challenging’
The British Business Bank is ramping up support for early-stage businesses amid continued challenges in venture capital markets, confirmed by the latest analysis of the small business finance markets. The Bank’s fifth Nations and Regions Tracker, published today, shows equity investment across the UK fell 2.5% to £10.8bn in 2024. The contraction has continued into 2025. Richard Bearman, chief development officer at the Bank, said equity markets faced “quite a challenging year” in 2025, following a difficult 2024 when deal volumes fell 15% nationally and returned close to 2018 levels. Equity markets performed particularly well across the North West in 2024, with deal volumes rising by 11.5% to 146, while equivalent values increased by an impressive 46.2% to £654m. The Bank is restructuring to deploy £2.5bn to smaller firms in the year ahead with a £340m expansion of its Regional Angels Programme.
Scottish office market showing signs of upturn
Evidence of an upturn in the Scottish office market has emerged in data for the third quarter. Lismore Real Estate Advisors’ says total transaction volumes reached £440 million across 34 deals, representing a 3% increase on Q3 2024 and sitting 12% above the five-year average. The office sector led the market, recording £142m in transactions, the largest sector total in Q3 and its strongest performance since Q3 2024. Standout office transactions included BauMont Real Estate and KZN Real Estate’s £53.85m acquisition of Quartermile 1 in Edinburgh from Epic UK, and Strathclyde Pension Fund’s £19.6 million purchase of Sentinel in Glasgow from Ardstone Capital. The largest deal of the quarter was US investor, Harbert Management Corporation’s £58.5m acquisition of Martha Street Apartments, a city centre PBSA asset from Chris Stewart Group.
Construction contraction slows but industry mood remains low
The UK construction sector saw a slight uptick in activity in September but remains firmly in contractionary territory. The latest purchasing managers’ index (PMI) registered 46.2, an increase from August’s 45.5 but still close to the five-year low recorded in July. Matt Swannell, chief economic advisor to the EY ITEM Club, said: “The slight recovery in the PMI over the last two months has done little to erase July’s fall to a five-year low. All three construction sub-sectors – residential, commercial, and civil engineering – continued to show a fall in activity as the pipeline of new work narrowed and order books declined for the ninth consecutive month.” However, he suggests weak PMI figures should be taken with a pinch of salt. “So far this year, the construction PMI has provided an unreliable indication of activity in the sector. Official estimates have reported output growth, but the construction PMI has slumped.”
Equity investment in smaller Scottish businesses ‘remains steady’
Scotland’s equity investment landscape has remained buoyant during the first half of 2025, with university spin-out activity leading the way, according to new research from the British Business Bank. The annual Nations and Regions Tracker revealed that in the first six months of 2025, Scotland recorded 87 equity deals with a combined investment of £226m. Among this, 16 equity deals involved university spin-outs, representing 18% of all UK spin-out activity. Despite a fall in the total deal volume and investment value compared to the same period in 2024 – down by 19% and 23%, respectively – Scotland continued to punch above its weight in terms of the share of investment that smaller businesses secured. Deals in Scotland accounted for 11% of total UK equity investment in small businesses – almost double the proportion of the UK’s small business population based in Scotland, which stands at 6%.
https://www.insider.co.uk/news/equity-investment-smaller-scottish-businesses-36025269