Business News Round Up (28/10/2025)
Reeves could face £20bn Budget hole as UK productivity downgraded
The government is facing a bigger-than-expected hole in the public finances as it prepares for next month’s Budget. A downgrade to the UK’s productivity performance from the government’s official forecaster could lead to the chancellor facing a £20bn gap in meeting her tax and spending rules, the BBC understands. Rachel Reeves has confirmed both tax rises and spending cuts are options in next month’s Budget. The Treasury declined to comment on “speculation” ahead of the Office for Budget Responsibility’s (OBR) final forecast, which will be published on 26 November alongside the Budget. The OBR will deliver its final draft forecast, including productivity – a measure of the output of the economy per hour worked – to the Treasury on Friday. The forecaster had previously assumed a partial bounce back in productivity growth, but this has never materialised.
https://www.bbc.co.uk/news/articles/c0rpve82jxvo
Scotland sees slower growth in tech startups
Scotland’s technology startup rate lagged in ninth place out of 12 UK nations and regions in the third quarter of the year. New figures show a 26% rise in incorporations in Scotland to 471 from 375 in the corresponding quarter last year. The figure was down 7% on the second quarter which produced 507 new companies. The Q3 figure was well short of the 141% jump in Wales, 51% in the West Midlands and 41% in the North West. Only the south east and Yorkshire and Humber (both 21%) and Northern Ireland (6%) produced a lower number of new firms than Scotland. Audit, tax and consulting firm RSM UK insisted the overall trend is of strong growth. Nationally, RSM’s analysis found a total of 15,470 new tech companies were incorporated in Q3 2025, jumping 36% from 11,368 in the same quarter last year.
Greater Manchester’s economy is showing ‘resilience’ and ‘steady confidence’
Manchester’s economy continues to show signs of steady growth, according to two reports about businesses across Greater Manchester. At an event on Friday 24 October, The Growth Company and GM Chamber of Commerce presented the latest findings from their respective Situation Report and Quarterly Business Survey and Quarterly Economic Survey (QES). The event, held at Alliance Manchester Business School, brought together representatives from businesses and local government around the region. It is the first time that both organisations have collaborated to deliver an event to showcase the main findings and emphasise the broader industrial trends being seen across Greater Manchester. The Growth Company’s Situation Report and Quarterly Business Survey derives its economic data and outlook from local business surveys. Its findings are based on 756 responses completed between the 2 July 2025 and 2 October 2025 by clients from the GM Business Growth Hub and MIDAS.
KPMG: Scottish VC investment soars by over 200% in Q3
Venture capital (VC) investment into Scotland’s start-up and scale-up businesses soared by more than 200% in the third quarter of 2025, according to the latest KPMG Private Enterprise Venture Pulse report. Scottish businesses raised £116.1 million in the third quarter of 2025. A total of 23 investments were completed between July and September, the same number as Q2, signalling the sustained confidence of VC investors in supporting Scotland’s small business ecosystem. The largest raise was the £67.5m investment in Stirling-based DL Mining, a leading cloud mining service platform. Software also dominated more broadly, with almost a third (30%) of Scottish VC investments in Q3 made into the sector. The increase in VC investment comes as KPMG’s recent mid-year Private Enterprise Barometer found that the appetite for Scottish businesses pursuing equity finance is gaining momentum, with more than a quarter (29%) of the country’s businesses now open to VC investment.
https://www.scottishfinancialnews.com/articles/kpmg-scottish-vc-investment-soars-by-over-200-in-q3