Category: 3. Business

Scotland’s space sector will receive a £4.6m funding boost to accelerate breakthrough technologies, the UK Space Agency has announced.

The funding includes a £3.7m sum from the Agency’s National Space Innovation Programme (NSIP), which will go towards four Scottish universities to advance innovations in the likes of satellites and ways of monitoring pollution from space.

The news comes on the opening day of the biggest space industry event ever held in the country, Space-Comm Expo Scotland.

More than 2,300 delegates, 100 speakers and 80 exhibitors are attending the conference at Glasgow’s SEC campus.

Dr Natasha Nicholson, chief executive of Space Scotland, said the new investment was a vote of confidence in the country’s space sector.

“These projects demonstrate the strength of our research base and the talent driving advancements in secure communications, environmental monitoring, and resilient navigation — technologies that will shape the future of global space infrastructure,” she said.

The four universities receiving funding include the University of Edinburgh, for work developing an instrument to measure pollution from space.

Also benefitting are the University of Strathclyde, to develop a satellite navigation system that doesn’t rely on GPS, and Heriot-Watt University to help build a quantum communication transmitter for small satellites.

Strathclyde will receive further funding as part of a consortium led by the University of Bristol. It is developing a UV-based device to enable secure data transmission between satellites, strengthening cybersecurity in orbit.

Scotland Office Minister Kirsty McNeill, who is giving a keynote speech at the expo, said the Scottish space sector was now “a vitally important industry”.

She said: “With our globally renowned expertise in designing and building satellites and rockets, world-leading universities and research centres analysing and applying space data, a commitment to sustainability and unrivalled geographical launch advantages, Scotland is rightly positioned at the forefront of the ever accelerating space revolution.”

The Scottish government’s Business Minister Richard Lochhead said the funding will help accelerate the industry.

“Scotland’s space sector and wider supply chain is already delivering on its significant economic potential but also helping solve some of the world’s most important challenges from climate change to telecommunications,” he said.

“This funding from the National Space Innovation Programme will help accelerate this work, leveraging our world-class universities to ensure the country’s industry remains at the forefront of space technology development and advancement.”

Further funding includes £350,000 for Space Scotland to strengthen capabilities in Earth Observation and In-Orbit Servicing and Manufacturing (ISAM) by fostering new partnerships between academia, industry, and government.

Another £410,000 of funding will go towards the OXYGEN project, aimed at making lunar exploration more sustainable. Partners in the project include the University of Glasgow.

The two day Space-Comm Expo will include talks and panels on topics including spaceports, rocket launches, satellite manufacturing, computing, AI and robotics.

Speakers include James ‘JD’ Polk, the chief health and medical officer at Nasa, astronaut and pilot David Mackay and Dr Sian Proctor, the first woman commercial spaceship pilot.

Space Agency statistics show that Scotland accounts for 13% of total UK space sector employment, with about 7,120 people employed, making it the third-largest employer after London (33%) and the South East (17%).

Tesla privately warned the UK government that weakening electric vehicle rules would hit battery car sales and risk the country missing its carbon dioxide targets, according to newly revealed documents.

The US electric carmaker, run by Elon Musk, also called for “support for the used-car market”, according to submissions to a government consultation earlier this year obtained by the Fast Charge, a newsletter covering electric cars.

The Labour government in April worried some electric carmakers by weakening rules, known as the zero-emission vehicle (ZEV) mandate. The mandate forces increased sales of EVs each year, but new loopholes allowed carmakers to sell more petrol and diesel cars.

New taxes on electric cars in last week’s budget could further undermine demand, critics have said.

Carmakers including BMW, Jaguar Land Rover, Nissan and Toyota – all of which have UK factories – claimed in their submissions to the consultation in spring that the mandate was damaging investment, because they were selling electric cars at a loss. However, environmental campaigners and brands that mainly manufacture electric vehicles said the rules were having the intended effect, and no carmakers are thought to have faced fines for sales in 2024.

Tesla argued it was “essential” for electric car sales that the government did not introduce new loopholes, known as “flexibilities”.

Changes “will suppress battery electric vehicle (BEV) supply, carry a significant emissions impact and risk the UK missing its carbon budgets”, Tesla said.

The chancellor, Rachel Reeves, alarmed carmakers further at the budget with the promised imposition of a “pay-per-mile” charge on electric cars from 2028, which is likely to reduce their attractiveness relative to much more polluting petrol and diesel models. At the same time, she announced the extension of grants for new electric cars, which the sector has welcomed.

Tom Riley, the author of the Fast Charge, said: “Just as the EV transition looked settled, the budget pulled it in two directions at once – effectively robbing Peter to pay Paul. If carmakers push again for a softer mandate, Labour only has itself to blame when climate targets slip.”

Tesla, Mercedes-Benz and Ford objected to their responses being shared, and were only obtained on appeal under freedom of information law. Several pages were heavily redacted, with one heading left showing Tesla called for “support for the used-car market”. Tesla declined to comment on whether that support would include grants.

In contrast, the US carmaker Ford and Germany’s Mercedes-Benz lobbied against more stringent rules after 2030 that would have forced them to cut average carbon dioxide emissions further – potentially allowing them to sell more-polluting vehicles for longer.

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Ford strongly criticised European governments for pulling support for electric car sales, saying that “policymakers in many European jurisdictions have not delivered their side of the deal”. Ford has U-turned after previously backing stronger targets.

The US carmaker also pointed to the threat of being undercut by Chinese manufacturers that “do not have a UK footprint and benefit from a lower cost base”.

Mercedes-Benz argued that the UK should cut VAT on public charging from 20% to 5% to match home electricity, and added that it should consider a price cap on public charging rates.

Tesla also called for a ban on sales of plug-in hybrid electric vehicles with a battery-only range of less than 100 miles after 2030 – a limit that would have ruled out many of the bestselling models in that category.

Ford, Mercedes-Benz and Tesla declined to comment further.

Surging investment in data centres to fuel the AI tech boom and rising household spending on essentials like electricity and rents buoyed economic growth through the three months to September.

National accounts figures showed real GDP expanded by 2.1% in the year, accelerating from 2% in June.

Despite positive signs that the private sector is starting to drive economic activity after a period of strong government support, the quarterly pace of growth was a disappointing 0.4% – well shy of the predicted 0.7% rate.

And after accounting for population growth, there was no rise in real GDP per capita in the quarter, and only a 0.4% increase over the year to September, highlighting the ongoing weak improvements in living standards.

Still, Belinda Allen, CBA’s head of Australian economics, said the national accounts showed how far the economy had come.

“It was just a year ago that (annual) growth was anaemic at just 0.8%,” Allen said.

“Fast forward a year and households are spending again thanks to strong income growth driving better sentiment, businesses are investing, residential construction is taking place and the public sector is placing a floor underneath growth.”

This welcome upswing, however, means the economy may now already be bumping up against its capacity to grow without sending inflation higher – a key risk that will be considered at next Monday’s meeting of the Reserve Bank’s monetary policy board.

Ahead of the release of the GDP figures, the RBA’s governor, Michele Bullock, said it was unclear how much more economic activity could pick up without adding to price pressures.

After inflation jumped to 3.8% in the year to October – well above the 2-3% target range – Bullock at senate estimates said the board would be trying “to determine the extent to which it (the recent increase in inflation) is temporary, or the extent to which it’s giving us a signal that there’s some more permanent pressures in the economy”.

Analysts and investors have largely written off any further rate cuts, and are now foreshadowing the chance the next move will be a hike.

A major positive in the latest national accounts was a boom in business investment, which lifted by 2.9% in the three months and which the ABS attributed to “major data centre investment across NSW and Victoria”.

It was the fastest quarterly growth in private investment in four-and-a-half years, and contributed half a percentage point to overall economic growth in the quarter.

Analysts also noted a lift in productivity growth, although at 0.8% over the year remained relatively weak and a major challenge for the country’s growth prospects.

With homebuilding also contributing in the quarter, Jim Chalmers in a statement highlighted that the economy was now expanding at its fastest annual pace in two years.

“The best way to improve living standards and continue to get more growth into the future is to make our economy more productive and resilient and our budget more sustainable, and that’s our focus,” the treasurer said.

Households in the three months to September were forced to shell out more on power bills, as electricity rebates rolled off, and on other essentials like rent, food, and on health – the last “due to a prolonged and severe flu season,” the ABS said.

While spending on essentials climbed by 1% in the latest quarter, against a 0.6% rise in the previous three-month period, discretionary spending fell 0.2%, after jumping by 1.5% in the quarter before.

A more cautious consumer was also reflected in a rise in households’ savings rate to 6.4% in the September quarter, from 6%.

The 66m tonnes of pollution from plastic packaging that enters the global environment each year could be almost eliminated by 2040 primarily by reuse and return schemes, significant new research reveals.

In the most wide-ranging analysis of the global plastic system, the Pew Charitable Trusts, in collaboration with academics including at Imperial College London and the University of Oxford, said plastic, a material once called revolutionary and modern, was now putting public health, world economies and the future of the planet at risk.

If nothing is done, plastic pollution will more than double in the next 15 years to 280m metric tonnes a year, the equivalent to a rubbish truck full of plastic waste being dumped every second. Much of the waste is made up of packaging.

This will damage every aspect of life; from the economy, to public health, to climate breakdown, the report, Breaking the Plastic Wave 2025, said.

“This rapid growth will harm human health and livelihoods through increased levels of land, water and air pollution, exposure to toxic chemicals, and risk of disease, and lead to higher rates of ingestion and entanglement among other species, resulting in more animals suffering illness, injury and death,” the authors said.

The production of plastic, which is made from fossil fuels, is expected to go up by 52% from 450m tonnes this year to 680m tonnes in 2040, twice as fast as the waste management systems across the world, which are already struggling to cope.

It is the packaging sector, an industry that creates items such as soft film, bags, bottles and rigid tubs for vegetables, margarines, drinks, fish and meat, that is causing plastic production increases. Packaging used more plastic than any other industry in 2025 and will continue to do so in 2040, the report found.

The single largest source of plastic waste across the world comes from packaging, which is used once then thrown away, and much of which is not recyclable. In 2025 it made up 33% globally of plastic waste, causing 66m tonnes of pollution to enter the environment each year.

But packaging pollution could be almost eliminated with concerted action such as deposit return schemes and reuse – where consumers take empty boxes or refillable cups to supermarkets and cafes. Combined with bans on certain polymers and substituting plastic for other materials, plastic pollution could be cut by 97% in the next 15 years, the research found.

“We have the ability to transform this, and nearly eliminate plastic pollution from packaging,” said Winnie Lau, project director, preventing plastic pollution, at the Pew Foundation.

“There are two key tools to decrease pollution from plastic packaging by 97% by 2040. The biggest of these are reuse and return systems, which will remove two-thirds of the pollution. The second is the reduction of plastic production for packaging and the use of other materials like cardboard, glass, metal and banning certain polymers.”

As well as polluting the environment, human contact with plastic – from children playing with toys, to people living next to petrochemical plants – is causing serious health problems.

“Plastic products contain more than 16,000 intentionally added chemicals as well as myriad unintentionally added contaminants,” the report said.

“Studies have already linked many of these chemicals to a range of health effects, such as hormone disruption, decreased fertility, low birth weights, cognitive and other developmental changes in children, diabetes and increases in cardiovascular and cancer risk factors.”

The global plastic system’s annual greenhouse gas emissions are also expected to rise from 2.7GtCO₂e (gigatonne CO₂ equivalent) in 2025 to 4.2 GtCO₂e in 2040, an increase of 58%. If plastic production were a country, its emissions would be equivalent to the third-largest emitter by 2040, behind only China and the US.

But transformation is possible, the authors say. If interventions in waste management, production cuts, and reuse and return systems take place, plastic pollution could be reduced by 83%, greenhouse gas emissions by 38%, and health impacts by 54%. This would save governments globally $19bn (£14bn) each year in spending on plastic collection and disposal by 2040.

“Hope remains,” said Tom Dillon, of Pew Charitable Trusts. “The global community can remake the plastic system and solve the plastic pollution problem in a generation, but decision-makers will need to prioritise people and the planet.”

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Within weeks of Donald Trump’s “liberation day” in April and the ensuing widespread panic after the sweeping escalation of the US president’s trade policy, KPMG had a tariff calculation model ready that it says saved its clients “hundreds of millions of dollars”.

The Big Four firm was “first to market” with the model, according to Stephen Chase, KPMG’s global head of AI and digital innovation, a feat he says would have been impossible without sustained investment in AI technology for over a decade. 

Being first to advise has become the new competitive edge for accounting and consulting firms as they push out AI across their businesses, particularly for large legacy firms competing with nimble AI-native start-ups. From trawling mass data sets during audits to find high-risk transactions to drafting consulting documents in minutes, the technology is expected to reorganise how professional services firms work.  

Soon after, Chase adds, KPMG snatched an audit bid from the jaws of a rival firm by showing off its AI capabilities to the client. “They were going to go with one of our competitors,” he says.

The rival firm had planned to send the customary “army of people” to manage the major task of transitioning the audit, but KPMG showed the client their AI audit platform, Clara, which the firm says can consume the same volume of information faster, with fewer people. “They went from sceptical to KPMG client,” he adds.

For smaller accounting firms, AI is proving just as helpful. Nearly half of UK firms with turnover up to £500mn reported at least a small rise in productivity from using AI, equivalent to reclaiming almost half a 40-hour week, a study by Xero and the Centre for Economics and Business Research found.

About half of finance and accounting professionals now use AI every day, compared with 33 per cent last year, according to a study by the Wharton School of the University of Pennsylvania published in October.

“The efficiency gains are real, though uneven — as you’d expect with any new technology,” says Dhiren Rawal, managing director and head of global shared services at consultancy Alvarez & Marsal. “In practice, this is what AI adoption looks like: small, practical changes that add up to a genuine shift in how people work. The technology is easy to acquire; the differentiation comes from how well it’s applied.”

Consultants are already using AI to test new scenarios, extract figures and draft complex materials in “minutes rather than hours”, Rawal says. “In transaction advisory, AI tools surface patterns in financial and operational data that would have taken days to uncover manually. In restructuring, they can classify and compare thousands of contracts within hours.”

He added that the biggest impact will come from depth, not scale. “Most firms, including ours, are learning that the hard part isn’t adopting AI, it’s integrating it safely and intelligently into complex workflows. That means tightening data foundations, building clear lines of accountability, and ensuring people understand both the strengths and limits of the tools they use.”

At KPMG, experiments on contained work groups show that AI productivity gains so far tend to range between 10 and 15 per cent, and up to 80 per cent for specific tasks, says Chase. 

But for global firms — which mostly operate through separate partnerships operating under a shared brand — the pace of AI adoption varies by country.

“The honest truth is we have member firms . . . where we have an adoption rate of 100 per cent . . . and we have countries where the adoption rate is . . . maybe 70 per cent,” says Christian Stender, global head of AI for tax and legal at KPMG International. “There are differences, maybe also from a cultural perspective.”

Partners tend to use AI less than employees, Chase adds. “I always give my partners a hard time, like ‘you got to lead from the front’,” but “they do different work, so you would expect the usage patterns of an associate to be different than they would be for a partner.”

Aiming for productivity gains alone will not move the needle, says Jonathan Keane, strategy and consulting lead at Accenture for UK, Ireland and Africa. “Gains only come when companies use AI to redesign processes and ultimately rethink whole business domains. That’s where the step-change in efficiency and growth will come from. To get there, the foundations must be right — clean, well-governed data; secure and interoperable systems; and people who understand how to work alongside AI.”

For KPMG’s Chase, the debate has already moved on from productivity. “I think we’ve long since passed the question of are we getting productivity, right? One of the questions everybody wants to know is, are we getting ROI [return on investment] out of it?”

He adds: “We’re all feeling tremendous pressure for ROI delivery . . . This is the year of ROI.”

Companies’ rapid embrace of artificial intelligence tools to write software is driving demand for systems to ensure the code these tools produce is not riddled with bugs and security flaws.

Start-up Antithesis on Wednesday announced a $105mn funding round led by trading firm Jane Street, the latest in a series of software testing and security groups to raise capital this year.

Will Wilson, Antithesis’ co-founder and chief executive, said “everybody adopting AI coding tools . . . will produce a huge volume of software . . . and put current approaches to software testing and software validation under enormous strain”.

Jane Street’s investment highlights how users of “vibe coding” tools — which write software with little to no human oversight — are increasingly concerned about costly errors that could be lurking in the AI-generated code.

“It’s not a coincidence that Jane Street is a massive user of AI coding,” Wilson added.

The quantitative trading firm uses custom software to make lucrative bets across financial markets. It is among Antithesis’ largest customers and requested to lead the round, according to the companies.

Jane Street also holds stakes in AI groups Anthropic and Thinking Machines Lab. Doug Patti, a software engineer at the firm, said Antithesis’ technology “has helped [Jane Street] uncover issues that no other testing method could find”.

Tech groups from Microsoft, Google and Nvidia to Coinbase and Klarna have led adoption of AI tools such as Anthropic’s Claude Code, Anysphere’s Cursor and Lovable over the past year, claiming they have supercharged their developers’ productivity.

A recent Gartner survey of software engineers found that almost two-thirds of organisations were using AI coding assistants in some form.

AI coding start-ups have raised billions of dollars as investors back them as a leading practical application of AI for businesses. Anysphere’s valuation has shot up from $2.5bn at the start of 2025 to $29bn last month, making it one of the fastest-growing start-ups of all time.

Start-ups such as Antithesis, which promise to vet this AI-generated software, are now attracting investment too.

In May, New York-based OX Security raised $60mn from investors including Microsoft and IBM Ventures to scale up its “VibeSec” security testing system. Palo Alto-based Endor Labs raised $93mn in April after releasing a tool used by companies — including OpenAI — to test for bugs and suggest or make fixes.

Antithesis tests software by creating a simulation of a company’s IT system and exposing the new code to automated user behaviour that would take months to test in the real world.

Gartner predicts that the US application security testing market will grow to $5.1bn this year, up from $3.4bn in 2023, as some studies show code written by AI systems is prone to errors.

“The problems with vibe coding stem from the sheer volume of code they produce,” said Michael Fertik, an early investor in Anysphere who also runs Modelcode.ai, a start-up that uses generative AI to rewrite ageing applications. “AI produces 10,000 times more code than any given human per year, so the risks are amplified and multiplied.”

That challenge is greater when AI coding is used in the labyrinthine IT systems upon which many large companies rely, where small changes can trigger an unforeseen cascade of problems.

Testing of dozens of advanced AI models across 80 coding tasks by Veracode, which makes application security tools, found that almost half of AI-generated software contained security flaws.

Another study published in the journal Empirical Software Engineering in December 2024 found vulnerabilities in at least half of programmes generated by the AI models from OpenAI, Google and Meta available at that time.

“While [large language models] can be useful for automating simple tasks . . . directly including such codes in production software without oversight from experienced software engineers is irresponsible and should be avoided,” researchers wrote in the paper.

AI programming systems continue to improve, but even early advocates have begun to sound the alarm over the reliability of these systems.

Andrej Karpathy, the influential former OpenAI and Tesla AI researcher who coined the term “vibe coding” in February, said he believed these AI-based systems were underdelivering on their creators’ promises.

“I kind of feel like the industry is making too big of a jump and is trying to pretend like this is amazing and it’s not. It’s slop,” Karpathy said, using a pejorative term for unhelpful or low-value AI-generated material.

“We’re at this intermediate stage,” he told the Dwarkesh Podcast in October. “The models are amazing [but] they still need a lot of work.”

Antithesis’ Wilson compared the AI coding boom to the offshore outsourcing trend of the 1990s and early 2000s, when early enthusiasm for shifting software development to locations with lower salaries was undermined by “the cost of telling whether the software that you received does exactly what you wanted it to do.”

Josh Albrecht, co-founder of Imbue, which offers a tool that coordinates coding assistants, said that if used correctly AI systems could “write much more robust code than in the past”.

“The problem comes where someone doing this doesn’t really understand software engineering. That’s where you get the security vulnerabilities,” he said.

AI coding providers are starting to tackle the problem themselves. Anthropic in August added automated security reviews to Claude Code.

Some in the industry see much of the revenue from securing AI-generated software ultimately flowing back to companies such as Anthropic, OpenAI and Google that develop the foundation models upon which vibe-coding tools are built.

“Vulnerabilities are happening faster thanks to AI, and we are selling software to squash those vulnerabilities faster thanks to AI,” said Dipto Chakravarty, chief product and technology officer at Black Duck, an application security company.

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HSBC has appointed the former KPMG partner Brendan Nelson as its new chair after a chaotic search process that left the job vacant for several weeks.

Nelson, who has been serving as interim chair since the start of October, is a surprise choice for a position that requires the diplomatic skill to bridge China and the west as well as deep banking experience.

HSBC’s failure to secure a high-profile chair will raise questions about the effectiveness of the board at one of London’s largest listed companies.

Nelson — who is 76 years old and has spent most of his career in the UK — may be seen as a temporary appointment until the bank can secure another candidate.

Speaking at the Financial Times Global Banking Summit on Tuesday, before the announcement was made, chief executive Georges Elhedery said Nelson did not want to serve a full term of six to nine years.

The former accountant would stay in the role “for as long as it takes until the board and the nomination committee identify the right chair”, Elhedery said.

HSBC said the decision was made after a “robust process” that looked at both internal and external candidates.

Among those in the mix, analysts said, had been former chancellor of the exchequer George Osborne and Goldman Sachs Asia boss Kevin Sneader.

“Since assuming the role of interim group chair, Brendan has demonstrated his excellent leadership capabilities backed by his strong banking and governance credentials,” said Ann Godbehere, the senior independent director who led the recruitment process.

Nelson spent 25 years at KPMG, rising to become the head of its global financial services practice, and has previously served as a non-executive director at BP and NatWest. He joined HSBC’s board in September 2023.

He replaces Sir Mark Tucker, who stepped down in September this year to become chair of insurer AIA.