25th October 2021
Good morning Welcome to Autumn Budget week 2021. On Wednesday the Chancellor will announce the government’s tax and spending plan for the second time this year after the Spring Budget in March. The government has already unveiled a series of pledges worth £20bn including one we dive into below.
- £1bn fund to attract foreign investment
- Fast fashion favourite on the ropes
£1bn fund to attract foreign investment
What’s going on?
The government will create a £1.4bn fund to encourage foreign investment into British businesses and attract overseas talent as part of this week’s budget.
Why is this important?
The Chancellor wants to make “the UK the best place in the world to start, grow and invest in a business”.
The £1.4bn “Global Britain Investment Fund” will hand out grants to encourage international businesses to invest in the UK, specifically innovative industries, like automotive and life sciences.
The fund will include:
- £800m investment in the production and supply chain of electric vehicles.
- £354m to support investment in life sciences manufacturing, increasing resilience for future pandemics.
- £312m for the British Business Bank’s start-up loans programme to provide 33,000 loans to entrepreneurs across the UK looking to start or grow their business.
The government said companies with “strategically important investment proposals” would be able to get grants towards their schemes through the fund.
Post Brexit the UK has been looking for ways to attract the best and brightest from around the world.
One way to do this will be with the creation of a talent network set up in innovation hotspots, first in the US and India next year. By 2023 the programme will expand to six more countries and will target universities, research institutions and innovation hubs to attract the best foreign talent to the UK’s science and tech sectors.
Over the weekend the government dished out £20bn in investment plans but on Wednesday it will also have to give detail on how this will be funded – tax increases and spending cuts elsewhere.
Fast fashion favourite on the ropes
Missguided, the fast fashion retailer popular among under-30s, is reportedly seeking £50m of emergency funds. The Manchester based company is under pressure from surging shipping costs and labour shortages that have prevented it from sourcing stock in tight timeframes.
Earlier in the year founder and owner Nitin Passi hired an investment bank to help him find investors to expand the business.
JD Sports had been one of the prospective buyers but has now pulled out over concerns on the supply chain issues.
If Missguided is unable to secure an injection of cash it could be bought by a rival like Asos, In The Style or Shein.
Fast fashion companies import huge amounts of clothes from around the world, most especially in Asia. But this year global shipping routes have faced increased demand as economies reopen post lockdown leading to higher transport costs for retailers. On top of that hubs for fast fashion producers like Vietnam have faced a shortage of workers, particularly in facilities located in Covid hit areas.
The next few days will be crucial to determine the future of Missguided. But its supply chain woes are not unique so this won’t be the last we hear of a retailer in need of emergency funds this side of Christmas.
Stat of the day
11 Picasso works have been auctioned for a total of more than $110 million, after being on display for years in a Las Vegas restaurant
Other stories to keep you in the loop
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- Tesco website and app hit by hackers
- Sainsbury's ends talks to sell banking unit
- Chinese hunger for luxury fuels L’Oréal sales growth
- Nigeria's central bank launches Africa's first cryptocurrency
- Saudi Arabia plans to be carbon neutral by 2060
- David Beckham signs £150m deal to be an ambassador for Qatar
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