Business News Round Up (29/04/2025)
Trade uncertainty to hit UK growth and investment outlook
The EY ITEM Club has downgraded its GDP growth expectations for 2025 to 0.8%, down from the 1% predicted in February’s Winter Forecast, and has revised its 2026 forecast down from 1.6% to 0.9%. While the start of 2025 appeared to show economic momentum building, the weaker global economy and market uncertainty created by trade disruption are expected to limit spending in the second and third quarters of this year as businesses and consumers become more cautious. This caution is expected to continue into 2026 and will be combined with the longer-term effect of tariffs on businesses and consumers. The EY ITEM Club Spring Forecast assumes that the US will operate with an average tariff rate of more than 20% for much of the rest of the world, which is expected to make it challenging for some UK exports to reach key markets, whilst weakening goods demand and restraining growth.
Scottish Gov must ‘close the skills gap’ warns CBI Scotland
CBI Scotland is calling on the Scottish Government to make closing the skills gap a top priority in the upcoming Programme for Government, in the hope of boosting productivity and long-term, sustainable growth. In a letter to the first minister, John Swinney, CBI Scotland argues for a coordinated national skills strategy and action plan with clear targets and metrics, setting out the role of businesses and education institutions, as well as the government, in future-proofing the labour market. Setting out its Programme for Government submission, the business group also called for greater support for upskilling and rapid retraining, with a stronger focus on aligning skills funding with industry needs and striking a better balance between university education and work-based learning. According to CBI Scotland, this could help Scotland build on its strengths, including a highly educated workforce, renewable energy expertise, world-class natural resources, and two green freeports.
https://www.digit.fyi/scottish-gov-must-close-the-skills-gap-warns-cbi-scotland
UK mid-sized firms eye international trade routes amid turbulence
Expanding or exporting overseas is a top priority for nearly one in three (32%) mid-sized businesses over the next year despite complex international trade conditions, according to the latest research from accounting and business advisory firm, BDO. BDO’s survey of 500 mid-sized business leaders, suggests they have been planning for supply chain disruption and new international tariffs by working to build new routes into international markets. Almost two in five (37%) expect to increase exports in the next year, rising to over half of businesses in the retail and wholesale (52%) and technology (56%) sectors. Many are targeting more sales towards Africa (35%), Australia (38%), and Asia (30%). Europe remains a healthy market for UK mid-sized businesses, with 41% planning for more exports to flow to the European Union over 2025.
https://www.digit.fyi/uk-mid-sized-firms-eye-international-trade-routes-amid-turbulence
Pandemic pivots become permanent as UK small businesses gear up for growth
New research shows most UK small businesses have permanently adopted changes made during the pandemic, boosting resilience and accelerating digital transformation. Five years after the first COVID-19 lockdown, Britain’s small businesses have emerged not just changed, but transformed, according to new research from Funding Circle. An overwhelming 92% of small and medium-sized enterprises (SMEs) that altered their business models during the pandemic have made those changes permanent. Whether shifting to new customer bases, embracing technology or rolling out new services, these businesses have turned short-term survival strategies into lasting blueprints for success. Technology has emerged as a critical driver of this transformation. Nearly half (47%) of SMEs are now prioritising digital investment over physical expansion, with many adopting new systems that enable long-term planning and agility. In fact, 63% of business leaders reported changing their entire approach to planning, strategy and decision-making since the pandemic.