Business News Round Up (13/06/2024)
Poor investment in UK regional cities has hindered economic growth
A lack of investment in the UK’s regional cities has hindered economic growth, resulting in lower standards of living compared to the US, France, and Germany, according to a report. The Centre of Cities think tank highlighted that the primary difference between the UK and its major competitors is the low productivity in cities such as Manchester, Birmingham, Glasgow, Sheffield, and Nottingham. Cities of a similar size outside Paris and Berlin exhibit higher productivity, measured by output per worker per hour. The study found investment is more evenly distributed across numerous US cities, which have thrived due to local financial support and recent initiatives. Cities such as Lyon and Frankfurt ranked higher than Birmingham and Manchester, affecting the UK’s position among G7 economies. The UK remains a middle-ranking country, ahead of Canada, Italy, and Japan in terms of output per hour.
https://londonlovesbusiness.com/poor-investment-in-uk-regional-cities-has-hindered-economic-growth/
Wet weather dulls GDP while Euros will left retailers
The UK economy showed no growth in April, in line with economists’ expectations, and potentially nudge the Bank of England towards cutting interest rates. April’s stagnation comes after the UK economy recorded its fastest growth in two years from January to March and moved out of a short-lived recession at the end of last year. The all-important services sector grew 0.2%, helping the economy avoid shrinking in April, but production fell 0.9%. Construction was even weaker, contracting by a hefty 1.4%, largely as a result of the wet weather. The data from the Office for National Statistics (ONS) will add to Prime Minister Rishi Sunak’s hopes of a Conservative victory on 4 July. This months’ figures are likely to get a lift from the start of a summer of sport as consumers spend more on food and electronic devices.
https://dailybusinessgroup.co.uk/2024/06/wet-weather-dulls-gdp-while-euros-will-lift-retailers/
UK leads Europe with highest valued AI sector at £72.3bn
The UK has come out ahead of the rest of Europe with the highest valued AI sector, coming in at £72.3bn. According to Tech Nation’s UK Tech in the Age of AI report, the UK ranked first in Europe in terms of AI funding, and £2.67bn was raised by UK AI startups in 2023. Further, 16% of total UK VC investment went to AI startups in the first quarter of 2024, showing the marked interest in the emerging technology. Existing companies are also jumping on the AI trend, with one in two using AI to improve their existing product offering. In Scotland specifically, of the £332m that was invested in tech, £62.8m was invested in AI last year. According to the report, the UK has 1,800 VC-backed AI startups, and is already home to 20 AI unicorns.
https://www.digit.fyi/uk-leads-europe-with-highest-valued-ai-sector-at-72-3bn/
Innovative energy storage firm raises £300m for Manchester facility
A £300m investment from a host of prominent backers is enabling the construction of one of the world’s largest long duration energy storage facilities in Manchester. Construction will begin on the site immediately, with the facility operational in early 2026, supporting more than 700 jobs in construction and the supply chain. Highview Power has secured the backing of the UK Infrastructure Bank and the energy industry leader Centrica with a £300m investment for the first commercial-scale liquid air energy storage (LAES) plant in the UK. The funding round was led by the UK Infrastructure Bank (UKIB) and the British multinational energy and services company Centrica, alongside a syndicate of investors including Rio Tinto, Goldman Sachs, KIRKBI and Mosaic Capital.