Business News Round Up (22/11/2022)
Scotland sees ‘significant slowdown’ in commercial property deals
Investment into Scottish commercial property saw a significant slowdown in the third quarter, with just £200m transacted. Property agent Colliers stated that this took Scottish investment volumes for the year to £1.7bn – around 15% ahead of the corresponding 2021 figure, but a slowdown from the first half of this year. Cross border capital accounted for half of all activity by value in the year-to-date, which is above the 2021 average of 42%. PonteGadea Immobiliaria, Heimstaden Bostad and Ares Management were the most acquisitive overseas buyers by value so far this year. Oliver Kolodseike, research director at Colliers, commented: “Scotland isn’t immune to the wider economic challenges that are sweeping the UK and as such, we are seeing the Scottish commercial property market find itself in the middle of a re-pricing. “By the end of the year, we expect to see significant outward shifts in yields across the board, particularly if the low volumes traded in the third quarter are anything to go by.” The retail sector saw a total of £70m invested, driven by the acquisition of Glasgow’s West End Retail Park and Cumbernauld Retail Park for £34.5m and £24.5m respectively. The industrial sector experienced a quiet third quarter, with just over £20m transacted across three deals, the largest being Custodian REIT’s purchase of a 92,000 sq ft warehouse, currently let to Gist, for £11m. Despite weak figures, the £320m transacted during the first nine months of 2022 is well above the 10-year annual average of £240m.
https://www.insider.co.uk/news/scotland-sees-significant-slowdown-commercial-28552904
Energy crisis to affect UK economy most among G7 nations
Inflation exacerbated by worker shortages and misdirected energy support will cause the UK economy to contract more than any other among the seven most advanced nations next year, a report says. A sharp downgrade for the UK economy — which is expected to shrink by 0.4 per cent in 2023 and grow by only 0.2 cent in 2024 — is forecast by the Organisation for Economic Co-operation and Development. Growth is also predicted to flatten out in September 2023. Germany is the only other G7 country set for a contraction in gross domestic product next year, with a 0.3 per cent drop, the report says. Italy will see only paltry growth of 0.2 per cent, while the US will eke out 0.5 per cent expansion. GDP is set to rise by 0.6 cent in France, 1 per cent in Canada and 1.8 per cent in Japan. The UK is also the third worst performing nation of all the G20 advanced countries, with only Russia and Sweden having a bigger decline in GDP, at 5.6 per cent and 0.6 per cent. Compared with the average of all the world economies, the UK’s performance is set to trail behind the 2.2 per cent in global growth predicted for next year. But this is still a sharp slowdown on the 3.1 per cent expected in 2022 because of the energy crisis and trading sanctions sparked by Russia’s war on Ukraine. The OECD also took aim at the UK government’s support efforts to cap energy bills at about £2,500 ($2,955) until April. It said they would push up inflation and mean households and businesses would be hit by higher interest rates as a result, as policymakers look to rein in price and wage rises.
North West retailers warned of increased fraud risk due to cost of living crisis ahead of Black Friday
As Black Friday approaches, RSM UK is warning North West retailers of the increased risk of fraud, both to their businesses and their customers. Data from UK Finance shows that nationally last year there was a total of 195,996 authorised Push Payment (APP) scams, with almost £77 million defrauded from businesses, and a staggering £506 million stolen from consumers. This type of scam occurs when criminals use social engineering to trick businesses and consumers into sending payment for goods and services to a fraudulent account, often via fake online advertisements or phishing emails. A recent report from the National Audit office demonstrated that fraud represented 41% of all crimes against individuals in the year to June, and yet the same report claimed that The Home Office does not have a clear understanding of how much fraud is costing the economy, or what is being spent on tackling the problem. Head of Retail Jacqui Baker, based at RSM in Liverpool, said: ‘With the UK economy losing millions to fraudsters at a time when retailers and consumers are already battling against the cost of living crisis, it’s clear more needs to be done to tackle online fraud. Unfortunately, as we head into a recession that’s expected to last around 12-18 months, we anticipate a further increase in this type of fraud. During the last recession we saw a rise in crimes like burglary and car crime, but this time it’s likely to be online fraud. We know that more people working from home during the pandemic drove an increase in fraud. It now seems it’s the criminals who are working from home, with thieves able to dupe businesses and consumers into sending them money without ever needing to leave the house.’
UK government borrows less than expected in October, but worse to come
Britain’s government borrowed less than expected in October, data showed on Tuesday, although the budget deficit is likely to balloon in the months ahead thanks to energy bill support measures and a slowing economy. The Office for National Statistics (ONS) said headline public sector net borrowing totalled 13.549 billion pounds ($16 billion) last month. A Reuters poll of economists had pointed to a higher reading of 22 billion pounds, largely because the figures were expected to show large first payments under the government’s energy bill support to households and energy suppliers. Tuesday’s data showed a relatively modest 3.4 billion pounds of “other” subsidies – an initial indicative estimate of the energy bill support measures. That figure excluded the Energy Bills Relief Scheme for businesses, as estimates were not yet available, the ONS said. Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said the full cost of these measures would show up in the coming months.