Business News Round Up (20/03/2025)
UK regional economic gap set to widen over the next three years
While all areas of the UK are set to see steady economic growth over the next three years, London and the East of England are the only two areas expected to grow at a faster pace than the UK average, according to the EY UK Regional Economic Forecast 2025. The UK overall is expected to see annual average Gross Value Added (GVA) growth of 1.6% between 2025 and 2028 as the combined impact of rising real wages, falling inflation and interest rate reductions help economic momentum start to build towards the end of this year. London and the East of England are both forecast to achieve annual GVA growth of 1.7% between 2025 and 2028. Close behind are the South East, the South West and Northern Ireland, which are all forecast to match the UK’s pace, with annual GVA growth of 1.6% between 2025 and 2028.
https://www.ey.com/en_uk/newsroom/2025/03/uk-economy-gap-to-widen-ref-2025
Return to the office gains momentum as demand for better quality workspaces surges – OBI report
A new report by property consultancy OBI has revealed a growing shift of large corporate occupiers looking to expand their occupational footprint when undertaking an office relocation. OBI said the trend contradicts a common assumption that most occupiers are downsizing when looking to relocate. The latest OBI Manchester City Centre Office Market Report for 2024 found that 70 per cent of transactions concluded in excess of 10,000 sq ft, saw occupiers taking expansion space when relocating. OBI puts these expansion requirements down to several factors including: Occupational densities; Increasing headcount – despite concerns around the general economy, many corporate businesses have been growing their employee headcount in recent years, with several requirements coming to the market and subsequently increasing in size; Return to office-based working – occupiers adapting their working policies around more days being based in the office.
University spin-outs are being ‘lost to overseas competitors’
Businesses established at universities are being tempted to take their talents and innovations overseas because of a lack of funding available to scale up in the UK. The UK risks becoming an “incubator economy”, as tech start-ups are already being “snapped up” by international competitors, according to Universities UK. The organisation has called on the UK Government to ensure universities are “adequately funded” so they can continue supporting spin-outs. Universities UK’s analysis suggested that by 2028, 27,000 new start-ups with a predicted turnover of about £10.8bn could be established at institutions across the UK with the right support. Figures from Higher Education Statistics Agency show there has been a rise of start-ups supported by universities in the last decade. Its data shows that the number of active start-ups established at universities increased by 70% from 2014/15 to 2022/23; with more than 4,300 firms registered on average each year.
https://www.insider.co.uk/news/university-spin-outs-could-lost-34891724
EY: Aberdeen set to be slowest growing city in the UK
Scotland is predicted to be one of the UK’s slowest-growing regions over the next three years, and could fall behind the national average according to the EY’s 2025 Regional Economic Forecast. While all areas of the UK are set to see steady economic growth over the next three years, London and the East of England (both 1.7%) are the only two areas expected to grow at a faster pace than the UK average, with the slowest rates of gross value added (GVA) growth expected in Scotland (1.4%) and the North East of England (1.3%). According to EY, Aberdeen is forecast to see the slowest GVA growth in the UK between 2025 and 2028 at just 0.9%, and is the only location over the period where average annual GVA growth is expected to be below 1%.
https://www.digit.fyi/ey-aberdeen-set-to-be-slowest-growing-city-in-uk