Business News Round Up (10/05/2021)
Quarter of UK businesses to close or downsize offices as UK embraces hybrid working
More than a quarter (26%) of UK businesses will either close, downsize or consolidate their offices in the coming months, as companies move to hybrid working models. More than half (53%) of businesses plan to offer more flexible or remote working policies, while 30% are expecting employees in the office between one and three days per week, research by YouGov for HR tech firm Applaud found. Just 14% of employers are not expecting staff to return to the office at all post-pandemic. With many office workers having worked remotely or in a hybrid environment for over a year, business attitudes towards flexible working are changing. More than a third (35%) of firms are planning to develop an employee engagement role distinct from traditional HR to support staff engagement and improve employee experience remotely. Respondents also said they want to spend significant resources rewarding employees for their work during the pandemic.
Record VC investment for Northern scale-ups
Businesses in the North attracted £315m in Venture Capital (VC) investment in Q1 of 2021. That’s according to KPMG’s Global Venture Pulse Survey. There were 37 deals in the region representing 9% of all UK deals by volume during the quarter, and 10% of all UK deal value. The most significant investments in the North West in Q1 were Manchester-based Matillion, which secured £58.5m from a group of investors, and LDC’s £30m investment in Rochdale-based Wireless CCTV. The report found that more than £5.1bn was invested in UK scaleups in the first three months of 2021, up 21 per cent on the previous quarter. The UK maintains its title as the jewel in the European crown, with seven out of the 10 largest deals in the region. Interest and valuations for fintech businesses continued to accelerate in Q1, with £1.9bn raised in VC investment. Three UK based fintechs raised large rounds, including LendInvest (£500m), Checkout.com (£325m), and Rapyd (£217m).
UK business borrowing forecasts fall by £7bn on recovery hopes
Forecasts for UK business borrowing have been slashed as the economy rebounds from the Covid-19 pandemic more quickly than anticipated.Banks are set to lend £19bn to British companies this year, up four per cent year on year but down from the £26bn forecast in February. Growth is set to slow further in 2022 to 1.6 per cent as reliance on emergency funding declines and firms focus on shoring up their balance sheets, according to forecasts by the EY Item club. The predictions are based on the government’s roadmap for easing Covid-19 lockdown restrictions. Banks lent businesses £35.5bn in net terms last year — an eight per cent year on year increase — mainly to provide support during the pandemic. Net lending via credit cards and personal loans also turned negative in 2020, falling by almost 10 per cent in the first decline since 2012. But demand for consumer credit is expected to pick up again this year and return to almost pre-pandemic levels, fuelled by a surge in spending as restrictions are eased.
Productivity growth key to levelling up across North West – CBI
The North West must exploit its preponderance of high growth business and future industries to emerge stronger from the COVID-19 pandemic. That is the message from new research by bosses’ organisation the CBI, supported by Lloyds Banking Group, which has analysed the comparative economic health of England’s regions, assessing their strength in key criteria around business activity, education, employment, connectivity, and social outcomes through a series of scorecards. These form part of the organisation’s wider Reviving Regions work, highlighting regional successes, as well as the challenges that must be overcome for levelling-up ambitions to succeed in the wake of COVID-19. CBI metrics show the North West region’s performance is hindered by low levels of business innovation and R&D activity.