Weekly Briefing: £29.5 billion investment boost for the UK, private sector returns to growth & UK leads Europe for VC tech funding

In this week’s briefing, we take a look at the announcements made by the Prime Minister regarding investment pledges into the UK from global firms, the year’s venture capital activity across Europe, and more. 

UK Economy

Global Firms Pledge Almost £30 Billion to UK Economy

• At Monday’s Global Investment Summit in London, Prime Minister Rishi Sunak announced that some of the world’s leading businesses have committed £29.5 billion of investment to new UK projects. 
• The pledges will provide billions for the UK’s most innovative sectors, including tech – which already attracts the highest level of investment in Europe and last year became the third in the world to be worth $1 trillion – renewables, housing and infrastructure.
• Making up the £29.5 billion is investment from businesses such as Australia's IFM investors, who will invest £10 billion into large-scale infrastructure and energy transition projects, and Microsoft, who have pledged £2.5 billion to build critical AI infrastructure in the UK. 
• More than 12,000 jobs will be created by this new wave of investment, and it follows a £2 billion investment from Nissan which will secure thousands of jobs in Sunderland, and a new Investment Zone in the North East which will also create 4,000 jobs.
• Prime Minister Rishi Sunak said: "Today’s investments, worth more than £29 billion, will create thousands of new jobs and are a huge vote of confidence in the future of the UK economy. Global CEOs are right to back Britain – we are making this the best place in the world to invest and do business."
  
  

UK Private Sector ‘Returns to Growth’

• According to the latest S&P Global / CIPS Flash UK PMI, November’s data has indicated a stabilisation in UK private sector output after three months of marginal reductions. 
• S&P Global have found November’s PMI score to be 50.1 (up from October’s 48.7), with any figure above 50 suggesting growth. 
• This comes as many economists predicted the previous three-month slump would continue, forecasting a PMI of 48.4.
• The improvement was reportedly the result of a return to business activity expansion in the service economy – which includes hospitality firms, banks and estate agents – alongside a softer downturn in manufacturing production.
• Tim Moore, Economic Director at S&P Global Market Intelligence, said: “The UK economy found its feet again in November as the service sector arrested a three-month sequence of decline and manufacturers began to report less severe cutbacks to production schedules. Relief at the pause in interest rate hikes and a clear slowdown in headline measures of inflation are helping to support business activity. Prominently cited areas of strength were corporate budgets for technology investment and general spending on essential business services.”

Venture Capital

UK Leads Europe For Tech VC Funding

• UK tech businesses are projected to secure the highest amount of venture capital in Europe this year at $12 billion, according to Atomico’s 2023 State of European Tech report. 
• France and Germany raised the second and third most VC funding in Europe, at $8 billion and $7.8 billion respectively. 
• Whilst the total amount invested into the European tech ecosystem in 2023 is on track to be $45 billion, it is a 38% drop from 2022’s total of $82 billion and 55% down on 2021’s over $100 billion total. 
• But referencing this fall in funding, the report states that “while the decline from the peak in 2021 is large, it’s worth highlighting that 2023 is on track to be the third-largest year on record by total capital invested, and is on track to come in at four times the volume seen 10 years ago in 2014. In fact, the resetting of investment levels appears to reflect a correction to the long-term upwards trajectory, following two outlier years of overheated activity.”
• The UK is also leading in start-up creation, accounting for half of all new businesses launched across Europe this year.

A Final Note

There’s some significantly positive news regarding investment into the UK economy and the UK’s VC investment activity in this week’s briefing, and it’s excellent to see such confidence in UK businesses and the burgeoning tech sector in particular. 

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