Tag: business

Renewed growth in Scottish private sector activity

  • Headline Business Activity Index at 51.0 in February, up from 47.1
  • Recovery in growth of new orders as firms cite greater demand
  • Price pressures continue to cool

The Scottish private sector registered the first rise in private sector activity for seven months in February according to the latest Royal Bank of Scotland PMI® data.

The Business Activity Index – a measure of combined manufacturing and service sector output – moved back within in the expansion territory, printing 51.0, up from 47.1 in January, as growth resumed across both the manufacturing and service sectors, with the former leading the expansion.

Panel members reported an improvement in demand conditions and growth in new clients helped boost activity. New orders also rose, following seven consecutive months of decline.

The upturn in new orders helped with the first rise in workforce numbers in three months. Furthermore, despite remaining stubbornly high, cost pressures continued to diminish. All in all, the positive performance of the Scottish private sector fed into higher levels of confidence.

Inflows of new business rose across Scotland in February, ending a seven-month period of decline. Upturns were similar across the two sub-sectors. Panel members noted growth in sales and new projects and clients helped revive growth.

New orders also rose at the UK level. However, the pace of increase was stronger than that observed for Scotland.

Sentiment was firmly positive and improved further from December’s recent low across Scotland in February. Expectations were largely pinned on new product launches, increased marketing and projected growth in customers and sales.

That said, optimism across Scotland remained muted when compared to the UK as a whole.

Employment rose across Scotland, following back-to-back months of decline. The respective seasonally adjusted index ticked up to a five-month high, signalling a rate of job creation that was firmer than the long-run average. According to anecdotal evidence, employment increased to meet order intakes and replace leavers.

The pace of job creation across Scotland was faster than the UK-wide average, which also recorded a rise in employment for the first time in three months.

Private sector companies across Scotland continued to reduce their backlogs during February, stretching the current sequence of reduction to nine months. Improved efficiency and previous months of fewer orders allowed firms to complete unfinished orders. That said, the pace of depletion was the weakest in the aforementioned sequence, reflecting only a fractional decline at service providers.

In contrast, backlogs of work rose across the UK as a whole for the first time in four months.

A rapid rise in input costs was registered across Scotland in February. Respondents blamed the latest increase in private sector expenses on energy prices, higher costs from suppliers and inflation generally. While historically elevated, the rate of input price inflation was the softest in 21 months and weaker than the UK-wide average.

Scotland registered one of the slowest increases in input prices among the 12 UK regions, ahead of the North West and East of England.

Charges levied for the provision of Scottish goods and services rose sharply in February. Inflation, Brexit and higher costs from suppliers continued to push charges up, according to anecdotal evidence. However, the pace of increase slowed notably to the weakest since April 2021.

Of the 12 monitored regions, Scotland reported the weakest incline in output charges.

Continued…

Source: Royal Bank of Scotland, S&P Global.

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: “Private sector output registered growth mid-way through the first quarter of 2023.

“The headline index signalled a mild expansion in output and marked the first month of increase since July 2022. Firms reported that a revival in customer demand and growth in new clients helped boost sales and activity.

“Growth in business requirements resulted in higher intakes of staff across both goods producers and service providers, while backlogs fell for the ninth month running.

“Furthermore, with inflationary pressures continuing to cool off, the Scottish private sector reported a modest performance overall, a change from the contractions seen since last August. Additionally, with confidence strengthening to an 11-month high, we hope that the upturn across Scotland will continue in the coming months.”

Supporting Scotland’s women entrepreneurs

Report identifies 31 ways to reduce gender gap and boost economy

The Scottish Government will carefully consider proposals to support more women into entrepreneurship, First Minister Nicola Sturgeon has said following publication of a wide-ranging independent review.

Pathways: A New Approach for Women in Entrepreneurship was commissioned by the Scottish Government to identify ways to unlock untapped potential, close the gender gap and boost Scotland’s economy.

The review – led by Ana Stewart, an entrepreneur and investor, and co-authored with Mark Logan, chief entrepreneur to the Scottish Government – makes 31 recommendations. The steps include:

  • providing start-up training and support in a range of pop-up locations to help more women, and other primary care givers, access services
  • integrating entrepreneurial education into schools and further education
  • clarifying existing access pathways into entrepreneurship
  • improving access to start-up and growth finance
  • tracking and measuring progress towards full representation in entrepreneurship

Commenting on the report,  First Minister Nicola Sturgeon said: “I welcome Ana Stewart and Mark Logan’s work in delivering a powerful review of the barriers facing women in entrepreneurship in Scotland and presenting a compelling set of recommendations aimed at removing them.

“The review’s findings are challenging but underline the need to tackle the root-causes, as well as the immediate barriers, of this inequality.

“Fully realising the entrepreneurial potential of women in Scotland will not only promote greater equality in our society, it will also deliver significant benefits for the economy. 

“The Scottish Government will respond quickly to the review as a whole, and its recommendations.”

Review chair Ana Stewart said: “This review has, through a combination of extensive stakeholder engagement and robust data analysis, revealed that women face many significant barriers to entrepreneurship.

“Only one in five businesses in Scotland are female-led, while start-ups founded by women received only 2% of overall investment capital in the last five years. By taking a root cause and effect approach, our recommendations focus on dramatically increasing female participation rates to drive a vibrant and fairer entrepreneurial economy.”

The First Minister welcomed the publication of the review on a visit to Roslin Innovation Centre, where she met Ishani Malhotra, Chief Executive of Carcinotech, and Dr Kate Cameron, who founded Cytochroma.

Read the review report, Pathways: A New Approach for Women in Entrepreneurship.

pathways-new-approach-women-entrepreneurshipDownload

Business Gateway partners with the UK’s first ‘Dr of Social Media’ to uncover the power of social listening for businesses

Business Gateway has announced a free online DigitalBoost event with Dr Jillian Ney, the UK’s first ‘Dr of Social Media’, which will equip Scottish businesses with the knowledge to harness their internet data.

Taking place on Monday, 27th February at 1pm, the hour-long webinar ‘Social Media Listening with Dr Jillian Ney’ will explore social listening – defining what it is, how it can benefit business owners, and offer tips on how to achieve impact in cost-effective ways.

Award-winning digital anthropologist Dr Jillian Ney is the founder of Glasgow-based The Social Intelligence Lab, a global community for professionals working with social and internet data.

She has worked in the industry for over a decade as a researcher, consultant, spokesperson, and author. She has been voted as one of the most influential women under 30 in digital marketing, has given two TED Talks: “Connectedness and the Digital Self” and “Social Media: The Value Lies in the Data”, and has presented her work at SXSW, Social Media Week, NATO, and 10 Downing Street.

Dr Ney began her PhD in social media and consumer behaviour in 2007 at the University of Strathclyde.

She discovered that by analysing how people present themselves and interact online, you can gather valuable insights about their behaviour in the real world. Since then, she has been creating methodologies to help businesses understand what is driving customer behaviour by applying behavioural science to social data and other online data sources.

‘Social Media Listening with Dr Jillian Ney’ will be hosted as a Q&A with Business Gateway’s Chief Officer, Hugh Lightbody. Dr Ney will offer expert guidance on how businesses can use online data to identify insights on their target audience and stay competitive, as well as explore the changing impact of the internet on the business landscape.

Dr Jillian Ney said: “Social listening is a powerful tool that can help businesses of all sizes gain a deeper understanding of their audience and stay ahead of their competition, but it is easy to get swept up in the hype of what the technology and data can offer.

“During the webinar, I will demystify this hype to help businesses concentrate on what’s important. I’m delighted to partner with Business Gateway on this session, hopefully encouraging more businesses to discover the untapped potential that lies in their social data.”

Hugh Lightbody, Chief Officer at Business Gateway, added: “We are thrilled to have Dr Jillian Ney join us for this webinar.

“She has led the field in social and internet data and her insights on how technology is changing people’s behaviour online and offline will help equip businesses with the tools and knowledge they need to succeed.

“Digital know-how is a fundamental skillset for business owners, as the opportunities the online world presents are huge.  We hope this webinar, delivered as part of our DigitalBoost programme, provides a valuable resource as businesses navigate the ever-changing digital landscape.”

For further information and to book a place on the webinar, visit: 

www.bgateway.com/events/social-media-listening-with-dr-jillian-ney-25615

Business Gateway is Scotland’s national business advisory service, offering free advice and support to anyone starting a new business, as well as to thousands of existing businesses with the ambition and potential to grow. Its DigitalBoost programme focuses on digital upskilling through free online resources and webinars from expert consultants.

For further information, visit: https://www.bgateway.com/

Scottish private sector remains in downturn in January

  • Private sector activity falls at a quickened pace in January
  • Downturn in new orders extends to seventh month
  • Marked drop in service sector new business

The Scottish private sector reported a further fall in total activity during January according to the latest Royal Bank of Scotland PMI® data.

The Business Activity Index – a measure of combined manufacturing and service sector output – fell from December’s five-month high of 48.3 to 47.1, signalling a quickened contraction in private sector output, and extended the current run of contraction to six consecutive months.

The rising cost of living, supply chain disruptions and a slowdown in the housing market all contributed towards the latest downturn in activity.

At the sector level, January data revealed that service firms led the decline, registering faster rates of reduction in both business activity and new orders compared to their manufacturing counterparts.

New business received across the Scottish private sector posted a further contraction in January. Moreover, the pace of decrease quickened from December’s three month low, signalling a sharp reduction in new work.

The downturn was led by a faster fall in new business received at service providers, while goods producers reported the softest decline in eight months. A slow housing market, transport strikes and squeezed disposable incomes were all in part blamed for the drop in new orders.

Of the 12 monitored UK regions, Scotland registered the sharpest pace of contraction in incoming new business.

After weakening for the second month running, business expectations across Scotland improved during January and printed a six-month high. Optimism largely stemmed from anticipation of new projects and increased activity. That said, the latest reading continued to post below the survey average as worries over the war in Ukraine, energy crisis, slowdown in the real estate sector and the cost-of-living crisis weighed on growth expectations.

Additionally, business sentiment across Scotland registered the third-weakest in the UK, ahead of Northern Ireland and the North East of England.

For the second month running, workforce numbers contracted across the Scottish private sector in January. The rate of job shedding was modest overall and only fractionally quicker than that seen in December. Where a drop in employment was noted, firms cited resignations, redundancies and retirements.

The drop in workforce numbers across Scotland contrasted with the no change seen at the UK-level.

The levels of unfinished work fell during January across Scotland’s private sector, thereby extending the current trend seen since last June. Moreover, the respective seasonally adjusted index ticked down from December’s four-month high, signalling the fastest rate of depletion in the aforementioned sequence. According to anecdotal evidence, lower orders allowed firms to work through previous contracts.

The rate of backlog depletion across Scotland was the fastest of all the 12 monitored UK regions.

Firms across Scotland’s private sector recorded a sharp rise in prices during January, thereby stretching the current run of inflation to 32 months. While the rate of incline measured the softest since May 2021, the latest upturn was still marked and historically elevated. According to anecdotal evidence, the incline in input costs was linked to higher prices for raw material, energy and transport, inflation and higher wages.

The pace of input price inflation across Scotland was the second-softest among the UK regions, behind the North West of England.

Private sector firms across Scotland raised their charges for goods and services for the twenty-seventh month running in January. Though the pace of charge inflation slowed to a three-month low, it remained stronger in context of survey data. The rise in charges reflected increasing cost pressures.

Adjusted for seasonality, the Prices Charged Index for Scotland posted below the UK-wide figure.

Source: Royal Bank of Scotland, S&P Global

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: “The start of the year revealed that the downturn in Scottish private sector activity that began last August was extended into 2023.

“Moreover, the latest decline in private sector activity accelerated. It seems unlikely that the sector will bounce back anytime soon as services firms were severely impacted by the depressed demand conditions and the current economic climate.

“The step back in client activity has also resulted in firms trimming their workforce numbers for the second month running. Alongside an ongoing drop in the level of unfinished work, a further reduction in payroll numbers can be expected.

“However, the latest figures indicate that perhaps the worst of inflation has passed. Nonetheless, the current rates of input price and output charge inflation are still elevated and can be detrimental to the health of the Scottish private sector.”

Scottish businesses set to benefit from new specialist finance support

Lloyds Bank has appointed Jamie Kemp to the role of Invoice Finance Area Director for Scotland and the North East, as it strengthens its support for businesses across the region.

Jamie has over 11 years of experience in the finance sector, with experiencing spanning across retail, private and commercial banking. Over the last 4 years, Jamie has specialised in Invoice Finance and has been recognised by UK Finance as their Top Foundation and Certificate student.

In his latest role, Jamie held the title of Business Planning Manager for the Invoice & Asset Finance Sales division where he was responsible for overseeing and supporting national delivery and performance.

Jamie Kemp commented: “I am delighted to lead a team of highly experienced Invoice Finance professionals to deliver bespoke solutions for small to medium sized enterprises. The current climate is making the cost of operating more and more challenging for businesses.

“I’m looking forward to supporting those businesses based in the North East and Scotland through these challenging times as much as possible in my new role alongside my team.”

Ben Stephenson, the Head of Specialist Client Solutions at Lloyds Bank, added: “We are pleased to welcome Jamie into the role of Invoice Finance Area Director. He brings with him a wealth of banking and finance experience, which will stand him in good stead to excel in this role and provide exceptional service for our clients.”

While starting his new role, Jamie is also hiring for an Invoice Finance Field Sales position (Associate Director level) based in and around Glasgow. The role has been designed to attract enthusiastic and talented individuals which may be new to the Invoice Finance industry.

It offers a substantial period of training, supported by a comprehensive learning plan, which includes undertaking the Invoice Finance Foundation Course, UK Finance’s entry-level qualification. This should ensure that the successful candidate has the best possible start to a career in Invoice Finance.

Overdue invoices in Scotland hit 2022 high, new R3 research shows

The number of overdue invoices in Scotland has reached its highest level for this year, according to new research from R3, the insolvency and restructuring trade body.

R3’s analysis of data provided by Creditsafe shows the number of invoices in Scotland that have gone past their payment deadline rose to 593,114 in October – the highest recorded monthly figure in 2022, and 13,941 more than September’s figure of 579, 173.

The monthly rise in late payments has been mirrored across the UK, with the South East of England and Scotland seeing the biggest jump between September and October rising 4.1% and 2.4% respectively.

The number of Scottish-based firms with overdue invoices on their books has also risen, with 101,835 companies failing to meet payments on time between August and October – an increase of 1,016 companies from the previous three months.

Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland, says: “The increase in late payments we’ve seen in October 2022 suggests that more and more businesses are either financially distressed or potentially concerned about their cash flows and that more businesses – those on the receiving end of the late payment – are going to potentially have issues paying their own staff and suppliers.

Richard, who is Restructuring Partner at Johnston Carmichael, continues: “Those businesses that are struggling – whether that’s because they’re behind on payments or because they’re waiting for overdue invoices to be paid –need to have a contingency plan in place for mitigating the issue.

“I urge any directors worried about their company’s cash flows or finances to seek advice from a qualified restructuring professional as soon as they can.

“It can take courage but having an early discussion whilst pressures in the business aren’t severe can be the difference between a successful turnaround or a decline into financial distress. 

“You won’t know what tools are available in the toolkit of a restructuring professional unless you ask and if anyone knows how to avoid an insolvency it’s professionals who deal with them every day.”

Royal Bank of Scotland: Downturn deepens amid falling demand

  • Business Activity Index falls to 45.8 in October from 48.0 in September
  • Contraction in new orders quickens
  • Growth in employment further weakens

The contraction across Scotland’s private sector firms deepened during October, according to the latest Royal Bank of Scotland PMI® data. Adjusted for seasonality, the Business Activity Index posted below the neutral 50.0 threshold for the third month running, at 45.8, indicating a sharp decrease overall.

Inflows of new business also went into further decline, the latest downturn being the most severe in 20 months. To further add weakness across the sector, inflationary pressures reaccelerated from September’s recent low, as service providers reported quicker upturns in input costs and charges during October.

The gloomy performance resulted to the softest intake of workers in 18 months, with goods producers reporting their first reduction in employment since January 2021.

New business received at Scottish private sector firms fell sharply during October. The rate of decrease quickened from September to the fastest in the current fourth-month sequence of reduction.

Of the two sub-sectors, manufacturing firms reported the steeper downturn. Companies noted that looming recession, economic uncertainty and the cost of living crisis weighed on client activity.

The downturn in incoming new business across Scotland outpaced the UK-wide average.

Output expectations for the year ahead across private sector firms in Scotland strengthened in the three months to October. The increase in confidence was underpinned on planned expansions and investment, with firms also hopeful of future economic stability. That said, sentiment was relatively muted in context of historical data.

Business confidence across Scotland was broadly in line with that recorded for the UK as a whole.

Employment across the Scottish private sector expanded for the nineteenth month running in October. However, amid a cooldown in hiring activity at service providers, with goods producers reporting their first contraction since January 2021, the overall rate of growth ticked down to the joint-lowest in the aforementioned series.

The rate of job creation across Scotland remained softer than that seen at the UK level, which similarly also slowed in October.

October’s survey showed a sustained fall in levels of outstanding business across Scotland’s private sector. The respective seasonally adjusted index posted below the neutral 50 threshold for the fifth consecutive month, the latest reading signalling the fastest depletion in work outstanding since January 2021. As per surveyed businesses, declines in new orders allowed firms to work through previous backlogs.

The rate of contraction in Scotland was the third-fastest across the UK, ahead of Northern Ireland and Wales.

October data signalled a robust rise in input costs across Scotland’s private sector, thereby extending the run of inflation to 29 months. Adjusted for seasonality, the latest reading increased from September’s 13-month low as a result of a reacceleration in input price inflation reported at service firms. The uptick in average costs was attributed to higher wages and utilities, cost of living crisis and general inflation adding strain on costs.

Despite being severe, the pace of input price inflation was however, softer than the UK average.

In line with the upturn in average cost burdens, charge levied by Scottish private sector firms also inclined from September’s recent low at a quickened rate during October.

The rate of charge inflation across Scotland posted weaker than the UK-wide average which slowed during October.

Source: Royal Bank of Scotland, S&P Global.

Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: “The Scottish private sector reported a third month of contraction during October. The downturn in activity quickened on the month, as stubbornly high inflationary pressures, the ongoing cost of living crisis and a threat of recession deterred growth. New orders received at firms also fell further.

“Employment trends across the sector indicated a slowdown in hiring activity over the recent months. The latest upturn was the joint-softest in the current 19-month sequence of expansion. At the same time, the level of outstanding business also fell at a much sharper rate. The data thus suggesting the further weakness in the labour market will not be surprising.

“As we proceed into the final quarter of the year, market conditions are set to become more challenging. The aggressive interest rate hikes, the decline in the value of sterling against the dollar and the rebound in post-COVID demand phasing out, all amidst the ongoing cost of living and energy crises, all point to an extremely difficult period for Scotland.”  

Almost 1.7 million overdue invoices in Scotland in Q3, new R3 research shows

New research from insolvency and restructuring trade body R3 reveals Scottish firms had almost 1.7 million overdue invoices on their books in the last quarter.

R3’s analysis of data provided by Creditsafe shows 1,696,445 invoices were overdue in Scotland in Q3 – an increase of 7.1% from Q2’s total of 1,583,353.

Scotland and the West Midlands saw the biggest quarter-on-quarter rise in overdue invoices across the UK, followed by Northern Ireland (6.9% increase), the East Midlands (5.4%) and East Anglia (5.2%).

And Scottish businesses’ debt burden has been increasing steadily since the beginning of the year, rising from 552,897 unpaid bills in July, to 564,375 in August and 579,173 in September.

Almost 101,500 Scottish businesses reported that they had late payments on their books in Q3 2022 – a figure which peaked at 33,936 firms in September.

Richard Bathgate, Chair of insolvency and restructuring trade body R3 in Scotland, says: “This research highlights late payment is a growing issue in Scotland, and would suggest that businesses are facing ongoing cash-flow challenges, whether that’s supplier or client side …

“For small businesses that rely on regular income, even if just one client fails to pay or there is a delay in payment, that can have a serious effect – and in some cases, may mean they become financially distressed or insolvent.”

Richard, who is Restructuring Partner at Johnston Carmichael in Aberdeen continues: “I would urge the directors of any businesses who are worried about the impact of late payments or are worried about their ability to pay their invoices to seek professional advice.

“There are many steps that can be taken to support businesses, but they can only be taken if you move quickly and act early before the issue spirals.”

Nationwide survey shows drop in confidence across business leaders as economic turbulence bites

A major new survey of small and medium-sized businesses across the UK has shown a dramatic dip in confidence amidst rising inflation and wider economic turbulence.

The Be the Business Productive Business Index (PBI), now in its fifth edition, shows business owners and directors forecasting a negative shift in their prospects over the next three months due to the difficult economic environment.

The Productive Business Index, unique amongst UK business surveys, tracks changes in five key areas of business activity shown to impact on productivity. Management capability; Technology adoption; Training, Development and HR; Operating efficiency; and Innovation.

Key findings include:

  • The first-ever negative change in headline figure since the Index launched;
  • Two in five businesses are seeking efficiencies as a direct result of inflation;
  • Business leaders feel less confident that they have the management skills to handle the current economic situation, but are fighting back with plans to improve

Anthony Impey MBE, CEO of Be the Business, said: “These findings tell a stark story – following two years of unprecedented challenge, many businesses are struggling to cope with the latest turbulence in the UK economy.

“For the first time ever, our Productive Business Index shows a decrease in the optimism and outlooks of business leaders. Having been through the challenges of the pandemic and the ongoing supply chain and workforce issues, it highlights how heavily the economic situation is weighing on them.

“The headline figures are concerning, but it’s encouraging to see more leaders digging deep and looking for ways to improve themselves and their business to help navigate the next year. Business owners are tired, but they’re being forced to pedal harder in response to the difficult conditions they’re facing. It’s vitally important that they’re given all the support they need so that improving their business and boosting productivity is as easy as possible.”

The Be the Business’ Productive Business Index’s headline score, running from 0 to 200, decreased for the first time this quarter, from 121.1 to 115.6, indicating a fall in the productivity of firms.

In response to inflation, two-fifths (38%) of business leaders are planning to respond by finding efficiencies, one quarter (26%) will prioritise growth opportunities, and about one in six (15%) are considering reducing headcount to help their business survive.

Despite fighting through the previous two years of ups and downs, business outlook has fallen for the first time since Q4 2020, with half (50%) of leaders not confident in their business’ ability to respond to sustained inflation.

However, leaders are increasingly looking to improve their businesses and performance as they look to survive these new challenges.

Beneath the figures: Bruised UK firms are still looking to improve in the face of decreasing confidence

The consistent pressure on business leaders over the last several years – from the pandemic through to supply chain issues and now the escalating cost of living crisis – appears to have had a negative impact on them.

Business leaders feel less confident in their management skills as they look to navigate an increasingly challenging autumn and winter.

While belief in capabilities is down, business leaders continue to respond positively, by looking to bolster their skills as managers and invest time and money in their business over the next year:

  • Over half (56%) of UK business leaders believe their management teams have the right blend of skills, an 8% decrease from Q1 2022.
    • However, determination and the drive to improve shine through, with 45% expecting to spend more time on management and leadership activities – a 9% increase in only 6 months.
  • Just 54% of business leaders believe they have the skills and talent needed to succeed, a 10% decrease from Q1 2022
    • But 4 in 10 (40%) have plans to reassess pay, rewards and incentives to improve employee motivation, an increase of 8% on the last PBI.
  • There has been a significant drop (9%) in the number of business leaders that feel their company fosters innovation and new ideas from employees.
    • Yet, 41% of business leaders plan to develop new ideas, an increase of 7% compared to the beginning of the year.

The contrast between lower confidence and intent to improve is striking in the data on capabilities, and demonstrates the determination from business leaders to succeed in spite of the volatile economic context.

The Fall Guy: Kwasi Kwarteng sacked

CHANCELLOR Kwasi Kwarteng has been sacked, carrying the can for the ill-judged ‘mini-budget’ which has caused economic turmoil since it was announced three weeks ago today.

‘I’m going nowhere’ Kwarteng, Prime Minister Liz Truss’s choice as Chancellor, was recalled from an IMF meeting in Washington DC this morning to be told the news.

Prime Minister Liz Truss will desperately hope that the departure of close ally Kwarteng will appease the markets. She made the following brief statement confirming a humiliating U-turn this afternoon:

Good afternoon,

My conviction that this country needs to go for growth is rooted in my personal experience.

I know what it’s like to grow up somewhere that isn’t feeling the benefits of growth.

I saw what that meant and I am not prepared to accept that for our country.

I want a country where people can get good jobs, new businesses can set up and families can afford an even better life.

That’s why from day one I’ve been ambitious for growth.

Since the 2008 financial crisis, the potential of this great country has been held back by persistently weak growth.

I want to deliver a low tax, high wage, high growth economy.

It’s what I was elected by my party to do.

That mission remains.

People across this country rightly want stability.

That is why we acted to support businesses and households with their energy costs this winter.

It’s also the case that global economic conditions are worsening due to the continuation of Putin’s appalling war in Ukraine.

And on top of this, debt was amassed helping people through the Covid pandemic.

But it is clear that parts of our mini budget went further and faster than markets were expecting. So the way we are delivering our mission right now has to change.

We need to act now to reassure the markets of our fiscal discipline.

I have therefore decided to keep the increase in corporation tax that was planned by the previous government. This will raise £18 billion per year.

It will act as a down-payment on our full Medium-Term Fiscal Plan which will be accompanied by a forecast from the independent OBR.

We will do whatever is necessary to ensure debt is falling as a share of the economy in the medium term.

We will control the size of the state to ensure that taxpayers’ money is always well spent.

Our public sector will become more efficient to deliver world-class services for the British people.

And spending will grow less rapidly than previously planned.

I met the former Chancellor earlier today. I was incredibly sorry to lose him. He is a great friend and he shares my vision to set this country on the path to growth.

Today I have asked Jeremy Hunt to become the new Chancellor.

He is one of the most experienced and widely respected government ministers and parliamentarians.

And he shares my convictions and ambitions for our country.

He will deliver the Medium-Term Fiscal Plan at the end of this month.

He will see through the support we are providing to help families and businesses including our Energy Price Guarantee that’s protecting people from higher energy bills this winter.

And he will drive our mission to go for growth, including taking forward the supply side reforms that our country needs.

We owe it to the next generation to improve our economic performance to deliver higher wages, new jobs and better public services, and to ease the burden of debt.

I have acted decisively today because my priority is ensuring our country’s economic stability.

As Prime Minister, I will always act in the national interest.

This is always my first consideration.

I want to be honest, this is difficult. But we will get through this storm.

And we will deliver the strong and sustained growth that can transform the prosperity of our country for generations to come.

Kwarteng’s replacement – and the UK’s fourth Chancellor in a tumultuous 2022 – is none other than veteran former health secretary Jeremy Hunt.

Hunt supported Rishi Sunak – who’s predictions on the economy have been proved painfully accurate – in the recent Tory leadership election.

Hunt himself was an early casualty in the recent Tory leadership election and was also once voted as the most unpopular front-line politician of all time!

Clearly another popular choice … what could possibly go wrong?

HM Treasury issued the following statement this evening:

Government update on Corporation Tax

  • The Prime Minister has set out that the way the government is delivering on its mission to achieve a low tax, high wage, high growth economy is to change.
  • The legislated increase in the Corporation Tax rate from April 2023 will go ahead, with most small businesses benefitting from the new small profits rate.
  • Chancellor Jeremy Hunt will deliver the Medium-Term Fiscal Plan on 31 October, detailing action to get debt falling as a percentage of GDP over the medium term.

The government has today [Friday 14 October] announced that Corporation Tax will increase to 25% from April 2023 as already legislated for, raising around £18 billion a year and acting as a down payment on its full Medium-Term Fiscal Plan.

The decision has been taken in recognition of the need to ensure the UK’s economic stability and reassure markets of its commitment to fiscal discipline, after elements of September’s Growth Plan went further and faster than markets were expecting.

The Prime Minister has set out that the government is prepared to do whatever is necessary to ensure debt is falling as a share of the economy in the medium term and to ensure that taxpayers’ money is well spent, putting public finances on a sustainable footing.

The previously announced small profits rate of Corporation Tax will be maintained. Smaller or less profitable businesses will not pay the full 25% rate, and companies with less than £50,000 of profit – the large majority – will not see any increase at all, continuing to pay Corporation Tax at 19%.

The UK’s corporate tax regime will remain competitive and supportive of growth at the 25% rate, continuing to be the lowest rate in the G7. As part of the forthcoming tax review, the government will look at how the tax system can go further to promote growth and investment.

The government is committed to growing the economy and taking forward supply-side reforms that will ignite strong and sustained growth that delivers prosperity for the UK.

Chancellor of the Exchequer Jeremy Hunt will set out the government’s Medium-Term Fiscal Plan on 31 October, alongside a full forecast from the independent Office for Budget Responsibility.