Latest news with #FraserofAllanderInstitute
The National
01-08-2025
- Business
- The National
Labour urged to reverse 'damaging tax on Scottish jobs' by SNP
The Fraser of Allander Institute released its latest quarterly business monitor on Thursday which showed that Scottish businesses are showing 'tentative signs of recovery' following a difficult start to the year. The report, based on a survey of more than 300 businesses across all 32 of Scotland's local authorities, showed that while net balances remain in negative territory, there are signs of resilience among Scottish firms following a poor first quarter. However, the report highlighted the continued impact of increased employer national insurance contributions (NICs), with more than 60% of Scottish firms having to adjust operations by cutting back on hiring, increasing prices, or reducing employee benefits. READ MORE: Revealed: The full text of SNP's independence strategy Almost 40% of businesses said they expect further adjustments to come. Following the report, the SNP have called for a better deal for Scottish [[business]]es, including a full review of damaging NIC hikes. However, the party said that ultimately independence is the only long-term route to delivering stability, growth and prosperity for the people and businesses of Scotland. Kenneth Gibson MSP echoed the party's calls as he said Scottish firms are being forced to 'absorb the consequences' of the UK Government's decisions. (Image: Scottish Parliament TV) He said: 'Scotland's [[business]]es are doing their best to recover, despite being held back by Westminster's economic mismanagement - not least Labour's decision to hike employer National Insurance Contributions. 'Scottish firms are being forced to absorb the consequences of a Labour government that has no regard for Scotland. Labour must listen to businesses and urgently reverse its tax on jobs. Gibson added: 'This report shows what the SNP has long been saying: businesses in Scotland are resilient, forward looking, and adaptable. But without the powers of independence we remain at the mercy of decisions taken at Westminster that do not reflect Scotland's needs or ambitions. 'Only with independence can we build a fairer, more resilient economy that works for Scotland's businesses and delivers economic stability, support for exporters, and a long term plan for sustainable growth." The report also highlighted that almost a quarter of businesses expect moderate to strong economic growth in the Scottish economy over the next 12-months. Meanwhile, nearly three quarters of businesses surveyed said they still expect growth to remain in the weak to very-weak territory. The Fraser of Allander Institute said the recovery in the second quarter had 'thus far failed to crystallise into durable improvements in overall business sentiment', and noted firms are continuing to be affected by unpredictability around trade and tariffs. Josh Hampson, knowledge exchange assistant at the Fraser of Allander Institute, said: 'The ongoing uncertainty around trade continues to show up in the sharp decline in the export activity from what was already seen as a weak starting point in the first quarter of 2025.' He added: 'Economic policy and political uncertainty are uppermost in the minds of Scottish businesses, even more than traditional factors such as borrowing costs or staff availability.' The UK Government has been approached for comment.
Scotsman
31-07-2025
- Business
- Scotsman
National insurance hike hammering Scottish businesses with more pain to come - Fraser of Allander Institute
'Economic policy and political uncertainty are uppermost in the minds of Scottish businesses' Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Scottish businesses are showing 'tentative signs of recovery', but confidence remains fragile and the hike in national insurance payments is hitting hard, a key survey today suggests. The latest quarterly business monitor from the Fraser of Allander Institute points to improvements in the volume of new business activity, turnover, employment and capital investment. The closely-watched survey is based on the findings from 300 businesses across all 32 local authorities in Scotland. Advertisement Hide Ad Advertisement Hide Ad While the overall net balances remain in negative territory, companies polled reported a recovery after a tough start to the year during the first quarter. Business owners were hit with higher national insurance contributions (NICs) in April. The only category where the net balance deteriorated even further in the second quarter from the opening three months of the year was export activity, as businesses reported a sharp decline from what was seen as a weak starting point in the first quarter. The report also found that more than 60 per cent of businesses have adjusted their operations because of the rise in employer national insurance contributions (NICs), which kicked in from April, with many adapting to this through a combination of strategies, including cutting back on hiring or cancelling increases in their workforce, adding the extra costs on to prices, and reducing employee benefits and compensation packages. Nearly 40 per cent of those quizzed expect to make more adjustments down the road. Advertisement Hide Ad Advertisement Hide Ad Sanjam Suri, knowledge exchange fellow at the Fraser of Allander Institute, which is based at the University of Strathclyde, said: 'The results in the second quarter marked a recovery of sorts after a very difficult first quarter. However, it's clear that overall business confidence remains challenged. 'The tentative signs of recovery have thus far failed to make a dent in the economic outlook for the rest of the year. While most businesses have adjusted to changes in NICs, nearly 40 per cent of firms plan on making more adjustments, suggesting that the full impact of these changes are yet to materialise.' Almost a quarter of businesses expect moderate to strong economic growth in the Scottish economy over the next 12-months. While this number has increased from the first quarter, nearly three quarters of businesses surveyed still expect growth to remain in the weak to very-weak territory. Broader inflationary trends continue to affect businesses with 75 per cent of companies expecting increased employee costs over the coming six months. Advertisement Hide Ad Advertisement Hide Ad The institute said the relative recovery in the second quarter had 'thus far failed to crystallise into durable improvements in overall business sentiment', which continues to be affected by unpredictability around trade and tariffs. Josh Hampson, knowledge exchange assistant at the Fraser of Allander Institute, said: 'The ongoing uncertainty around trade continues to show up in the sharp decline in the export activity from what was already seen as a weak starting point in the first quarter of 2025.
STV News
04-07-2025
- Business
- STV News
Economic slowdown linked to global uncertainty amid Trump tariffs
A slowdown in growth in Scotland's economy is 'largely due to higher global uncertainty' – with experts saying this is linked 'particularly' to US President Donald Trump's trade tariffs. The Fraser of Allander Institute also highlighted a recent rise in inflation this year as having 'played a role' as the economy 'faltered'. Economics experts at the Strathclyde University-based think tank have now downgraded their forecasts for growth. Speaking as its latest quarterly economic commentary was published, institute director Professor Mairi Spowage said: 'After a strong start to the year, the Scottish economy has faltered in March and April and is essentially the same size in real terms as it was six months ago. 'Unfortunately, the wider business environment and global events are still taking a toll on businesses and consumers, which is having a dampening effect on spending and business investment.' The think tank now expects economic growth of 0.8% in 2025 and 1.0% in 2026 – which is a slight downgrade from its April forecasts of 0.9% and 1.1%. It noted Scottish real GDP grew 0.4% in the first quarter of 2025, compared to 0.7% in the UK as a whole. The think tank said: 'A pattern of lower growth in Scotland has persisted, leading to a weaker recovery from the pandemic than the UK generally.' Looking at the latest data, it found Scotland's economic growth had 'remained slow', with rises in the first months of 2025 having been 'partially offset' by decreases in March and April. The report said: 'The slowdown in growth this year is largely due to higher global uncertainty, particularly from the announcement of tariffs in the US and elsewhere. 'With the CPI (Consumer Prices Index) rate at 3.4% in May 2025 after staying below 3% throughout 2024, an uptick in inflation has also played a role.' The think tank said its latest forecasts 'reflect greater uncertainty and difficult economic circumstances'. It also noted that businesses had reported a slowdown of activity in the first quarter of 2025 compared to the same period last year. The report said this 'decline in activity may reflect the impact of increases to employer national insurance contributions as well as uncertain conditions, particularly from trade and tariff decisions taken by the US government'. It said the 'difficult conditions for business have been echoed in the labour market', with the think tank noting pay growth has been 'slow' and the number of employees has fallen 0.9% from last year. It also said there was 'some indication that the proportion of people living beyond their means in Scotland may have increased compared to this time last year' – but added other indicators of financial stability 'seem to be holding steady'. Get all the latest news from around the country Follow STV News Scan the QR code on your mobile device for all the latest news from around the country
The National
04-07-2025
- Business
- The National
UK Government hindering Scotland's economy, says SNP
Experts said spiralling costs, uncertainty over trade tariffs imposed by the United States, and a rise in employer National Insurance Contributions imposed by the Labour UK Government have all hampered Scotland's economy. Economics experts at the Strathclyde University-based think tank Fraser of Allander Institute have now downgraded their forecasts for growth. READ MORE: I'm an SNP MP. This is why we abstained on proscribing Palestine Action The think tank now expects economic growth of 0.8% in 2025 and 1.0% in 2026 – which is a slight downgrade from its April forecasts of 0.9% and 1.1%. It noted Scottish real GDP grew 0.4% in the first quarter of 2025, compared to 0.7% in the UK as a whole. Last year, Chancellor Rachel Reeves announced in her autumn budget that employers' NICs would rise from 13.8% to 15%, while the threshold at which firms would start paying also increased. At the time, business leaders described the policy changes as a 'life or death' hike for microbusinesses and SMEs. The SNP said they have long warned that the current UK fiscal system is unfit for Scotland's economic needs, and with independence, Scotland would be able to build an economic model with full fiscal powers, which works for the country. SNP MSP Gordon MacDonald said Scottish businesses need a government which works with them and not 'against them'. (Image: Archive) He said: 'These findings should ring alarm bells in Westminster. Scotland's businesses are resilient - but their ability to invest, grow and employ is being strangled by a Westminster government entirely out of touch with the needs of our economy. 'Scottish businesses need a government that works with them, not against them. While the UK government refuses to reform immigration to match our labour needs, and hikes taxes on employers trying to stay afloat, the SNP is doing everything we can with one hand tied behind our backs. 'Only with the full powers of independence, over tax, immigration, trade and energy, we could chart a fairer, more sustainable path for Scottish growth. 'Until then, the SNP will continue to press Westminster to reverse damaging policies like the employers national insurance hike and to develop a migration and trade policy that supports, rather than sabotages, Scottish jobs and businesses'. Looking at the latest data, the think tank found that Scotland's economic growth had 'remained slow', with rises in the first months of 2025 having been 'partially offset' by decreases in March and April. Speaking as its latest quarterly economic commentary was published, institute director Professor Mairi Spowage said: 'After a strong start to the year, the Scottish economy has faltered in March and April and is essentially the same size in real terms as it was six months ago. 'Unfortunately, the wider business environment and global events are still taking a toll on businesses and consumers, which is having a dampening effect on spending and business investment.' The report said: 'The slowdown in growth this year is largely due to higher global uncertainty, particularly from the announcement of tariffs in the US and elsewhere. 'With the CPI (Consumer Prices Index) rate at 3.4% in May 2025 after staying below 3% throughout 2024, an uptick in inflation has also played a role.'
Daily Record
04-07-2025
- Business
- Daily Record
Donald Trump blamed for sluggish Scottish economy after tariffs slapped on exports
Experts warned economic recovery from repeated covid lockdowns was weaker in Scotland than the rest of the UK. Donald Trump's decision to slap tariffs on exports to the United States has been blamed for the sluggish state of the Scottish economy. Experts at the independent Fraser of Allander Institute today downgraded their forecasts for Scottish economic growth to just 0.8 per cent in 2025 and one per cent in 2026. And the think-tank warned economic recovery from repeated covid lockdowns was weaker in Scotland than the rest of the UK. They said poor growth was "largely due to higher global uncertainty" – linked "particularly" to the US President's trade tariffs. Professor Mairi Spowage said: "After a strong start to the year, the Scottish economy has faltered in March and April and is essentially the same size in real terms as it was six months ago. "Unfortunately, the wider business environment and global events are still taking a toll on businesses and consumers, which is having a dampening effect on spending and business investment." It noted Scottish real GDP grew 0.4 per cent in the first quarter of 2025, compared to 0.7 per cent in the UK as a whole. The think tank said: 'A pattern of lower growth in Scotland has persisted, leading to a weaker recovery from the pandemic than the UK generally.' The report added: "The slowdown in growth this year is largely due to higher global uncertainty, particularly from the announcement of tariffs in the US and elsewhere. "With the CPI (Consumer Prices Index) rate at 3.4% in May 2025 after staying below 3% throughout 2024, an uptick in inflation has also played a role." Looking at the latest data, it found Scotland's economic growth had 'remained slow', with rises in the first months of 2025 having been 'partially offset' by decreases in March and April. Tory MSP Craig Hoy said: "While there's no question external factors are impacting Scotland's economy, it's clear anti-business SNP policies are also stifling growth. "The Nationalists' failure to fully pass on the rates relief available to businesses south of the border, coupled with them making Scotland the highest taxed part of the UK, explains why the growth rate here is even lower than the anaemic rate Keir Starmer is presiding over. "Scotland is currently saddled with two disastrous, high-tax-low-growth, left-wing governments." Deputy First Minister Kate Forbes said: "It is clearer than ever that Scotland's economy is being impacted by challenging global trading conditions and uncertainty – conditions mirrored across the rest of the UK. "We are taking ambitious steps to grow the economy by pursuing new investment, building export potential and driving and capitalising on the Scottish innovation at the forefront of many key global industries. "But we are doing all of this without the full economic powers needed to fully address the issues facing Scottish businesses. We need decisive action from the UK Government to counter the damaging economic impacts of Brexit and business uncertainty."
