This was reflected again and again in the results from companies such as budget airline easyJet which enjoyed a record-breaking summer and a 34% hike in annual pre-tax profits to £610 million. Package holiday giant Jet2 reported a 16% rise in interim pre-tax profits to £772m, latest quarterly profits at British Airways cruised beyond expectations, and TUI recently flagged a continuing strong performance from its UK business as consumers continue to prioritise their diminished spending power on overseas travel.
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“Even in difficult economic times, the annual overseas holiday remains a highly valued and eagerly anticipated experience, often taking precedence over other discretionary spend,” Jet2 chief executive Steve Heapy said in November.
Despite a few glitches, Scotland’s space sector continued to gain momentum as the country prepares for its first vertical rocket launch which is expected next year.
There was a setback in August at Shetland’s SaxaVord spaceport when an engine exploded on the launchpad during testing, but the biggest news was arguably the announcement at the beginning of this month that Orbex – which makes rockets in Forres and was developing its own spaceport in Sutherland – will instead switch its launch operations to SaxaVord.
While questions have been asked about the public funding that has been put into the mothballed facility at Sutherland, most within the sector say the move makes sense.
“The UK’s space industry is developing very quickly and requires the associated economies of scale and synergies to maintain its competitiveness for launch services from Europe,” SaxaVord chief executive Frank Strang said as he welcomed Orbex to Shetland.
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It was also a robust year for Scotland’s commercial property sector, with a report published in August by estate agency Colliers showing that investment in the first half of the year soared to £1.3 billion amid strong demand for high-quality office space.
Total investment in office deals increased to £330m in the second quarter from £90m in the first three months of the year, with much of the leap from the sale of 177 Bothwell Street by HFD Group of Scotland to Spanish investor Pontegadea Inmobiliaria.
Many workers will see their pay packets boosted in the spring following the announcement in October’s Budget that the minimum wage will go up by 6.7% to £12.21 per hour, but employers have warned that this and accompanying increases to their national insurance contributions threatens to hamper growth while also pushing up prices.
Retailers and hospitality providers will be hit particularly hard by the moves from Chancellor Rachel Reeves, with industry group UK Hospitality claiming that “some jobs on minimum wage will become unviable”.
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It is said this is due in large part to a 1.2 percentage point increase in employers’ national insurance contributions, which will rise to 15% from April 5. At the same time, the minimum annual salary at which this becomes payable will fall from £9,100 to £5,000.
In November the boss of Marks & Spencer, chief executive Stuart Machin, warned of potential price increases as a result of these Budget measures. Sainsbury’s has similarly said that it can’t rule out the possibility of price increases, while pub giant Wetherspoons has said that “all hospitality businesses” will have to raise charges to customers.
Pubs, hotels and restaurants are currently in the midst of their busiest time of the year, and while the short-term boost is undoubtedly welcome this alone will not compensate for what has been several punishing years for the hospitality sector as the pandemic rolled over into a cost-of-living crisis that continues to constrain consumers’ disposable incomes.
Earlier this month, the founder of one of the UK’s fastest-growing hospitality groups warned that the Budget has pushed his company into a “loss-making position” with hopes of profitability in 2025 “just a dream”.
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Founding director Nic Wood of Edinburgh-based Signature Group, which has more than 20 venues across Scotland, said increases in business rates and labour costs have put further expansion at serious risk.
“We are fully committed to survival and doing our utmost to boost sales, but despite our efforts, our profits continue to decline year after year,” Mr Wood said. “Several times this year I have found myself asking, what’s the point?
“Every year, we work harder, to sink further. Each year, we drive turnover, and every year, we make less profit than the year before due to the cost pressures and factors out of our control – rate increase, labour cost increases and further taxation.
“Passing these costs on to the consumer is not the answer. They too have a walk-away point.”
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The Budget also delivered unwelcome news for Scotland’s whisky industry, with Mr Reeves announcing that spirts duty will rise in line with retail price index inflation from February. The Scotch Whisky Association (SWA) accused Prime Minister Sir Keir Starmer of breaking his promises to the industry.
“This duty increase on Scotch whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink,” SWA chief executive Mark Kent said.
“On the back of the 10.1% duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.”