Business News Round Up (13/09/2021)
Scottish economy growth is fastest in UK, Royal Bank survey reveals
Scotland recorded the fastest economic growth of any of the UK nations and regions in August, a key survey published today reveals. Royal Bank of Scotland’s seasonally adjusted business activity index for the private-sector economy north of the Border rose from 57.5 in July to 58.1 in August, rising further above the 50 no-change mark to top the table of the 12 UK nations and regions. This index is a combined measure of manufacturing and services sector output. Employment in Scotland’s private-sector economy grew for a fifth straight month in August and, although the pace of job-creation eased, it remained sharp, Royal Bank noted. Setting out the survey findings, the bank said: “Business activity growth eased across the majority of regions for the third month in a row in August. Only Scotland, which recorded an index reading of 58.1 and topped the rankings narrowly ahead of Wales (58.0), saw a faster rate of expansion than in July.”
Employment grows at fastest rate since 2014, but upturn in business activity slows
Firms operating in the North West recorded a further rise in business activity in August, but the rate of growth slowed to the lowest since February, the latest UK regional PMI data from NatWest showed. The recovery in employment levels continued to gather pace however, reaching the fastest for more than seven years, despite firms being hit hard by sharply rising costs. The headline North West Business Activity Index – a seasonally adjusted index that measures the month-on-month change in the combined output of the region’s manufacturing and service sectors – registered 55.3 in August. Though still firmly above the 50.0 no-change mark, it fell from 59.9 in July and was the lowest reading for six months. August data indicated a sixth straight monthly increase in inflows of new business at firms in the North West. Surveyed businesses commented on greater engagement with clients and more customers reopening. The rate of growth remained solid by historical standards, but it eased further from June’s record high to the slowest in the current recovery that stretches back to March.
Scotland fintech boom: 50% surge in financial tech firms during Covid
Scotland’s fintech industry has undergone a period of rapid growth during the pandemic, with the number of financial technology firms surging by 50% since Covid struck. FinTech Scotland’s entrepreneurial community has grown from 119 small and medium sized enterprises in March 2020 to 181 today. The increase in innovative start-ups reflects wholesale changes in consumer behaviour, with the disruption caused by the public health crisis triggering a country-wide transition to digital. This news comes as FinTech Scotland announces the formation of an SME Advisory Board, made up of leaders from the entrepreneurial community focused on ensuring the necessary support is in place to continue the momentum of fintech innovation. Initially, the board will focus on providing impetus on skills development, experience when it comes to accessing funding and commercialisation opportunities.
UK firms bank on London’s status as top financial centre
More than two thirds of the UK’s financial firms believe that London will retain its status as one of the world’s leading financial centres after Brexit.When Britain completed its exit from the EU in December last year, it divorced from its biggest single export customer, casting doubts over its status as a leading global financial hub. But city firms were bullish about the future of their business in the UK, according to an annual sentiment survey of more than 100 banks, asset managers and insurers conducted by Lloyds Bank. Just under a third (32%) said they believed the competitiveness of their own sector would improve over the next year – almost double the 17% of firms who thought it would worsen. Changes in the regulation that governs the sector post-Brexit was the main sticking point for City firms: almost half (48%) of the firms that believed the UK’s competitiveness would improve in the next year cited regulation diverging from the EU model as the key factor. But at the other end of the spectrum, three quarters (78%) of the firms that were more pessimistic about the UK’s competitiveness cited regulation as a commanding factor.