Chemicals Industry
Sir Jim Ratcliffe has raised concerns over the imminent extinction of the UK’s chemicals industry, attributing the issue to high energy prices and carbon taxes. Ineos’s synthetic ethanol plant in Grangemouth, operational for over 40 years, recently closed, resulting in 80 job losses and impacting 500 indirect roles. This closure leaves the UK reliant on synthetic ethanol imports. The upcoming shutdown of Scotland’s last oil refinery at Grangemouth will further result in 400 job losses. Ratcliffe criticized the UK’s energy strategy, pointing out the closing of 10 chemical complexes in the past five years and a 40% drop in chemical production since 2021. The Chemical Industries Association echoed these concerns, emphasizing the need for immediate government action to reduce energy and carbon costs for competitiveness. The government criticized Scotland’s lack of an industrial strategy, pledging to develop a comprehensive UK-wide strategy. Ineos seeks globally competitive pricing for natural gas and hydrogen and a supportive trade policy to aid UK manufacturing.
Labour’s Focus on Economic Growth
Prime Minister Sir Keir Starmer, addressing the need to boost the United Kingdom’s economic growth, pledges to make the UK the top destination for artificial intelligence companies by eliminating planning restrictions and establishing “AI growth zones.” Despite recent economic setbacks and market turmoil that have pressured Chancellor Rachel Reeves to consider spending cuts or tax hikes, Starmer remains focused on fostering a conducive environment for AI and technology sectors. Reeves, returning from China, will urge regulators to remove barriers to growth. Business confidence has dipped due to high inflation and tax increases, leading to reduced hiring and capital expenditure plans among UK companies. Starmer backs Reeves’ fiscal policies, believing they will stabilize the economy over time.
egal Proceedings Against Alleged Smuggler
Adriatik Hysenlika, alleged leader of an Albanian human smuggling gang, is contesting his deportation from the UK to Belgium where he faces a ten-year prison sentence. Hysenlika, who entered the UK in 1998 and received citizenship in 2007, argues that deportation would violate his human rights due to Belgium’s overcrowded jails and would separate him from his two-year-old son. The National Crime Agency arrested Hysenlika following a request from Belgium, where he was convicted in absentia for 60 immigration offenses. He allegedly earned over £1 million by smuggling migrants into the UK. An application to revoke his UK citizenship is currently under process as he remains in London’s Wandsworth jail. Additionally, Office for National Statistics data show a high arrest rate among Albanians in the UK, with significant deportation figures.
Investment Banking Shifts
In 2024, JPMorgan overtook Barclays to lead the UK investment banking fee league tables, with $549 million in revenue and a 10% market share. This ascendancy was driven by a 57% jump in UK investment banking fees, significantly fueled by a 42% increase in mergers and acquisitions (M&A) revenue, while the initial public offering (IPO) market remained sluggish. Although Barclays had previously led the league tables in 2023, JPMorgan’s extensive UK investment banking team, bolstered by recent talent acquisitions, has solidified its top position. Despite a 9% decline in IPOs to $1 billion, the overall boost in fees was primarily attributed to the revival of M&A activities. Additionally, Barclays retained its top spot in the UK debt capital markets, securing $150 million in fees, with JPMorgan capturing 23% of the UK equity capital market fee pool.
Automotive Market Entry
A new Chinese car brand, Xpeng, is set to enter the UK market with its affordable electric vehicle (EV), the G6, aiming to rival Tesla’s Model Y. The G6, designed by JuanMa Lopez, features advanced technology, including the ability to automatically slow down when passing signs indicating speed limit changes. The all-electric SUV, priced competitively around £35,000, offers a distinctive design with a length of just under five meters and a width of almost two meters. The standard model includes a 66kWh battery with a range of 270 miles and fast-charging capabilities. Interior features include a glass roof, an 18-speaker audio system, reclining front seats, a 10.2-inch central screen, and advanced safety and convenience features. UK sales are expected to start in March.
Employment Outlook
Due to significant tax increases in the October budget, large UK businesses are planning to reduce hiring at the quickest rate since the COVID-19 pandemic, as per a Deloitte survey of chief financial officers from 63 major companies. These businesses are also curtailing investments, discretionary spending, and hiring due to the £25 billion hike in employer social security charges. The survey, conducted from December 3 to 16, revealed a considerable drop in employment intentions and capital expenditure plans. Despite a two-year low in business optimism, the overall sentiment is less bleak than the lows seen in 2020 and 2022. Although Britain is deemed a better investment destination than the euro zone, its attractiveness has declined more sharply relative to other regions, with the U.S. considered more favorable. According to a separate survey by Make UK, 57% of manufacturers plan to increase investment once the government clarifies its long-term industrial strategy this year.
Tourism Development in Belfast
A £100 million tourist attraction, Belfast Stories, is set to open in Belfast in 2030. As part of a £1 billion regeneration project, it will act as both a visitor attraction and a cultural hub, telling the city’s story through tales from residents and visitors. The project will include a rooftop garden, multiple floors, and is anticipated to attract over 700,000 visitors annually, creating up to 1,
