Business News Round Up (23/05/2023)
Gap between the highest and lowest performing cities is narrowing
The gap between the highest and lowest ranked UK cities in PwC’s Good Growth for Cities Index is narrowing, as the economic wellbeing of the cities at the bottom of the Index has improved at a faster rate than those at the top. The Demos-PwC Good Growth for Cities Index ranks 50 of the UK’s largest cities (generally considered those with populations of at least 350,000 people), plus the London boroughs as a whole, based on the public’s assessment of 12 economic measures, including jobs, health, income, safety, and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment, and business startups. Oxford, Swindon, Exeter, Bristol, and Southampton make up the top five cities in the overall Index. Cities in the lower performing end of the Index include London, Bradford, Middlesbrough and Stockton, Birmingham, and Manchester. Oxford is the top performing city, with a strong performance on economic measures such as income, employment rates and life expectancy helping it to maintain first place. However, it is improving at a slower rate than lower performing cities, such as Bradford. While Bradford is at the bottom of the ranking, it is increasing its score more significantly on factors such as skills and income distribution where it performs above the national average. New analysis shows that people are prioritising work-life balance more than in previous years as post-pandemic changes to working patterns allow people greater flexibility, greater control over working location and supporting better work-life balance. As a result, this is helping to unlock good growth in many cities across the UK.
Equity investment in Scotland hits new record
Equity investment secured by Scottish businesses reached a record £953 million in 2022, an increase of 26% from £754m in the previous 12 months. The Risk Capital Market report based on Beauhurst data confirms that Scotland’s investment market has retained its position as one of the best performing across the nations and regions of the UK. It is surpassed only by the ‘Golden Triangle’ of London, the South-East and East of England, for both deal numbers and amount raised. Despite a modest fall in the number of deals completed (407 in 2022 compared with 424 in 2021), the value of investment secured was bolstered by a number of large deals valued at £50m plus which delivered the record investment value in the year. Scotland’s strengths include investment into spinouts and a growing number of companies attracting later stage and international investment. Spinouts from Scottish universities continued to attract significant investment with £235 million secured by 58 spinouts making it a record year for spinout value, up 53% on 2021 (£154m).
IMF says it no longer expects UK recession this year
The UK will escape a recession this year, the IMF said on Tuesday, adding that the country’s economy had been “buoyed by resilient demand in the context of declining energy prices”. But the fund cautioned that Britain risked being stuck with persistent inflation unless interest rates stay high for longer. “Economic activity has slowed significantly from last year and inflation remains stubbornly high,” the fund said, while adding that “the outlook for growth, while improving somewhat in recent months, remains subdued”. The IMF predicted earlier this year that the UK economy would shrink by 0.5 per cent between the final quarter of 2022 and the final quarter of this year. But, in a significant upgrade, it said the economy was now set to expand 0.4 per cent in 2023, reflecting stronger wage growth, more supportive fiscal policy and a faster easing in the global pressures of energy prices and supply chain blockages. It expects GDP to grow 1 per cent in 2024 and to average 2 per cent in 2025 and 2026. But the IMF warned inflation was now set to remain above the Bank of England’s 2 per cent target for six months longer than it had forecast last month, until mid-2025.
https://www.ft.com/content/26ac0f8b-90d2-4096-b196-4aa638b0462e
Scottish cities outperform UK average on skills for younger workforce
Scottish cities are performing above the UK average when it comes to the ratio of house prices to earnings and skills among 16 to 24 year-olds. The latest PwC Good Growth for Cities Index revealed that Edinburgh leads the way, sitting 15th – compared with 19th last year – with above-average performance against indicators of economic success, including work-life balance and skills for those aged 25 and over. Glasgow, meanwhile, was relatively the weakest of the Scottish cities, despite moving from 42nd in last year’s index to 35th this year, while also tracking above the UK average on work-life balance. Aberdeen sits among the top six most improved UK cities within the whole index, in 31st place, compared with 37th last year. The report also sets out expected economic growth for Scotland in 2023 and 2024 – predicting it to sit eighth out of the UK’s 12 nations and regions in terms of growth. The index, compiled with educational charity Demos, ranks 50 of the UK’s largest cities – generally considered those with populations of at least 350,000 people – plus the London boroughs as a whole, based on the public’s assessment of 12 economic measures, including jobs, health, income, safety, and skills, as well as work-life balance, housing, travel-to-work times, income equality, high street shops, environment, and business start-ups.
https://www.insider.co.uk/news/scottish-cities-outperform-uk-average-30041819