Business News Round Up (18/08/2022)
21 new businesses created in Glasgow every day during first half of 2022
OVER 20 businesses were created per day in Glasgow in the first half of 2022, according to new research by iwoca – one of Europe’s largest small business lenders. Analysis of Companies House data reveals that 3,742 businesses were registered in Glasgow between January and June 2022, an increase of 15% from 2021, and an increase of 48% from the same period in 2019. In Edinburgh, 2,952 new businesses were created in the same period. iwoca’s Small Business HotSpots UK 2022 shows that Glasgow saw the highest rate of new business creation per capita out of all local authorities in Scotland in the first half of this year with 589 businesses being created per 100,000 people. Edinburgh saw the second highest business growth in Scotland, with 561 per 100,000, followed by Dundee (384). Scotland experienced the lowest rate of new business creation per capita out of all UK regions, with 338 per 100,000, up 19% from 2021. Across the UK, 93 new businesses were created every hour in the first half of 2022 with over 402,000 businesses registered in the UK between January and June 2022, an increase of 18% from 340,500 over the same time period in 2021. London saw the highest rate of business creation in the first half of this year per 100,000, followed by the West Midlands (571) and North West (554).
NW first half mid-market private equity deal activity above pre-pandemic levels
Mid-market private equity activity across the North West held firm during the first half of 2022, with 45 deals boasting a total value of £2.2bn taking place. A new study collated by KPMG revealed that, while both deal volume and value were down on the first six months of 2021 – 52 and £2.8bn, respectively – they were up on pre-pandemic levels. Overall, the UK exceeded historic levels of both deal volumes and values during the first half of 2022, excluding the unusual peak in activity during 2021, compared with the same period in both 2018 and 2019. Bolt-ons accounted for nearly two-thirds (62%) of all mid-market deals – the highest half-yearly proportion on record – due to them being viewed as a low-risk strategy to support the growth of existing platform businesses. The aggregate value of bolt-ons in the first half of 2022 was £12.7bn, also notably higher than the levels seen in both 2018 and 2019. Business services and TMT maintained the top spots in terms of sectors with the most mid-market deals, accounting for 60% of private equity investments. The ongoing trend for hybrid working and digitally enabled services encouraged this trend.
Edinburgh and Glasgow rated among most ‘AI-savvy’ cities in the UK
Edinburgh and Glasgow have been rated among the most ‘AI-savvy’ cities in the UK, according to new research. Scotland’s capital and the city by the Clyde are listed in the top 10 cities for use of AI tools such as chatbots and digital home assistants according to a survey by Yell. They appeared at number three and six respectively in a poll of consumers asked whether they used artificial intelligence on a daily basis – outranking Belfast, Birmingham, and London. Among Edinburgh poll participants, 18% said they used the technology every day compared to 16% for Glasgow. Cardiff was top nationally with 23% of poll participants saying they used AI with Liverpool second on 19%. With AI-based household tech such as smart speakers and online tools such as chatbots and smart-saving apps already revolutionising the way we conduct our daily lives; Yell’s report delves into more detail about how we interact with the technology. By using insight gained from extensive surveys with over 2,000 consumers from across the country, the findings help to shine a light on current attitudes towards AI, and how businesses could shape the way they operate as a result. Despite London being the centre of technological advances and a stereotypically tech-savvy city, in this instance the capital falls just outside of the top ten, in 11th place with 14% of Londoners using AI every day.
Historic inflation surge to swell UK debt interest bill to over £200bn
A historic inflation surge is set to swell the UK’s debt interest bill to over £200bn, top economists have warned today. Britain’s public purse is set to come under intense pressure over the next two years that may cause the government to miss their borrowing fiscal rule, according to the Institute for Fiscal Studies (IFS). The amount of money the UK pays holders of government debt will climb to over £100bn this year and next, forcing policy makers to ratchet up borrowing far above official forecasts published by the Office for Budget Responsibility (OBR) at the March budget. Interest payments are linked to the retail price index (RPI) for around a quarter of government debt. They are spread over decades. The IFS said bigger than expected government spending will push borrowing “about £16bn higher this year than forecast in March, rising to £23bn higher next year”. The UK’s debt interest bill is forecast to top the around £75bn of spending on defence and transport. In the financial year before Covid-19, the country’s debt interest bill was around £48bn. Tory leadership candidates Liz Truss and Rishi Sunak have promised to ramp up support for the poorest households to shield them from the cost of living crisis. Truss has backed cutting taxes, while Sunak has pledged to step up cash transfers.