Business News Round Up (10/08/2023)
60% chance UK economy will enter recession in 2024
There’s a 60% chance the UK will enter a recession at the end of 2024, with the country on course for five years of lost economic growth. This is according to new forecasting published by the National Institute of Economic and Social Research (NISER). The thinktank reported that UK GDP is currently 0.5% below the level seen before the pandemic, with it suggesting it will not pass this level until the third quarter of 2024. Overall, GDP is projected to grow barely by 0.4% this year and 0.3% in 2024. Meanwhile, inflation is forecast to remain continually above the two percent target until 2025 – with it expecting it to fall to 5.2% by the end of 2023 and 3.9% by the end of 2024. It also found that low economic growth and stagnant productivity will increase the financial vulnerability of households in the bottom half of the income distribution, resulting in NISER’s 2024 general election projections suggesting inequalities of income and assets with little income will growth for many, low or no savings, higher debt – as well as elevated housing, energy, and food costs. As a result, the shortfall in the real disposable incomes of households in the bottom of the income distribution is set to reach some 17% in the 2019 to 2024 period. In addition to this, regional real wages are expected to be below pre-pandemic levels by the end of 2024 – namely in the east and southeast of England, as well as the west midlands where wages are projected to be about five percent lower than in 2019.
KPMG study: Third of Scotland ‘highly investable’
Data revealed as part of new Local Business Pulse Index (LBPI), which uses AI to categorise places based on common economic strengths.More than a third (37%) of local areas across Scotland have been identified as High Investment Areas – places which share an expected high rate of growth in business investment, according to a new quarterly economic study from KPMG UK and the University of Nottingham. In comparison, 22% of places across the UK were considered High Investment Areas. The data comes from the new quarterly Local Business Pulse Index (LBPI), which uses AI technologies to pinpoint what is influencing economic activity across the UK’s regions and devolved nations by using seven ‘clusters’ to characterise potential growth. Created by the professional services firm and university, the aim is for businesses and local government leaders to use the LBPI to prioritise what type of investment is needed and where it should go. The live tool will be updated each quarter presenting a current and forward-looking view across each area. Using AI technology, the seven clusters have been derived from the geographic, sub-national data covering businesses, employees, and consumers. These clusters include Business Creation; Sales Growth; High Investment; Employment Growth; Research and Development; Consumption Growth; and High Productivity.
https://www.digit.fyi/kpmg-study-third-of-scotland-highly-investable/
Spending power to surge in London but plunge in other regions
The spending power of workers in some parts of the UK will still be below the level it was before the pandemic by the end of 2024, a think tank has warned. Pay, after accounting for rising prices, is set to fall between 2019 and 2024 in regions like the West Midlands and East of England, said Niesr. By contrast, it said London and parts of the South were “steaming ahead”. The Treasury said the UK economy had “proven resilient… heading off predictions of a recession this year”. Over the last few years inflation – the rate at which prices rise – has soared, driving up the cost of living for millions. Wages have also climbed, but not as fast as prices, leaving households across the UK feeling squeezed. The National Institute for Economic and Social Research (Niesr), which is one of the UK’s oldest economic forecasting bodies, said that Brexit, Covid and the Ukraine war had badly affected the economy, resulting in five years of “lost” growth. It added that the surging cost of living meant people’s spending power in some parts of the UK would still not be back to 2019 levels by late next year. The regions set to see the biggest squeeze are the East of England, parts of the South East and the West Midlands, where pay, when inflation is accounted for, is forecast to fall by between 0.5% and 5% in the period.
https://www.bbc.co.uk/news/business-66436792
Recycle Scotland re-engineers University of Dundee furniture, saving 600kg from landfill
Scotland’s leading workplace furniture recycling organisation, Recycle Scotland has announced a strategic partnership with the University of Dundee to re-engineer the university’s furniture as a sustainable solution to disposal. Beginning with the University’s Dalhousie Building, Recycle Scotland has repaired and reupholstered lobby seating to ensure it is fit for purpose and aligns with the University’s identity. As an alternative to buying new, the initial project has saved approx. 600kg of furniture from going to landfill – equivalent to roughly 0.6 metric tonnes of CO2 – and has generated savings of around £5,000 for the University. Recycle Scotland took the existing furniture offsite to be repaired and reupholstered and has also collected additional redundant furniture to be recycled or sold to other businesses to further support the circular economy. The project is part of a long-term strategic partnership that will see Recycle Scotland re-engineering the vast amount of furniture in need of potential repair across the campus, making the University of Dundee one of the first universities in Scotland to undertake a project of this scale. Working with Recycle Scotland has enabled the University of Dundee to drive its commitment to the United Nations’ Sustainable Development Goals by supporting responsible production and consumption, as well as launching partnerships for sustainable development.