Business News - 16th May 2017 - CPA | The Credit Protection Association

Business News – 16th May 2017

UK inflation at highest since 2013

The UK’s inflation rate rose last month to its highest since September 2013, official figures show. Inflation now stands at 2.7% – up from 2.3% in March – and above the Bank of England’s 2% target. Last week, the Bank of England warned that the Consumer Prices Index (CPI) would peak at 3% this year because of the fall in sterling after the Brexit vote. Higher air fares were the main reason, which rose because of the later date of Easter this year compared with 2016. Rising prices for clothing, vehicle excise duty and electricity also played a part, but a fall in the price of petrol and diesel slightly offset this.

BBC

EU Tightens Brexit Negotiating Language as Positions Harden

The European Union governments tightened their Brexit negotiation stance as they prepare for talks with the U.K. over its departure from the bloc. The EU toughened its language on a future transitional arrangement that would help companies adapt to Britain’s new status, specified demands on citizens’ rights and clarified the role of European courts, according to the latest draft negotiating directives obtained by Bloomberg News. Any transitional phase, from the time the U.K. formally exits the EU to the start of a possible trade deal, must be “clearly defined, limited in time and subject to effective enforcement mechanisms,” the draft, dated May 15, said.

bloomberg

Debt judgements rise by a third

Figures from the Registry Trust reveal nearly 300,000 debt judgments were filed against individuals in English and Welsh county courts in the first three months of 2017. It is the highest quarterly figure for more than 10 years and represents a 35% rise compared with the first quarter of last year. Joanna Elson, the chief executive of the Money Advice Trust, warned that the trend was likely to continue as people feel rising inflation levels eating into their wages.

The Guardian, Page: 21

Lib Dems propose start-up allowance

The Lib Dems are planning to offer budding entrepreneurs a “start-up allowance” to help cover living costs in the first six months of setting up their business. The party would give individuals up to £2,600 (£100 a week), while also expanding the British Business Bank to make it easier for firms to borrow. It also intends to review changes to business rates.

Yorkshire Post, Page: 4

Labour’s top tax rate could hit extra 1m workers

Labour is expected to propose lowering the threshold for the 45p rate of income tax from £150,000 to £80,000 when it launches its manifesto today. The move would bring nearly 1m more workers into the tax bracket, according to the Telegraph. Senior Labour figures have also suggested that a 50p rate of tax may be reinstated for the highest earners, while IHT allowances could also be cut, as the party looks to find an extra £4.5bn to fund the NHS. Meanwhile, the Guardian reports that Labour’s manifesto will include a proposal that aims to disincentivise excessive pay by charging companies a 2.5% levy on earnings above £330,000, and 5% on those above £500,000. The rates mean that companies will have to pay £4,250 extra for every worker receiving £500,000 in pay and perks. Labour has also announced a tax raid on business, with corporation tax set to rise from 19% to 26% and Capital gains tax also likely to be increased.

The Guardian, Page: 1, 7 The Daily Telegraph The Independent, Page: 8 The Times Financial Times, Page: 2 Daily Mail, Page: 1-2 Daily Express, Page: 6-7 The Sun, Page: 10

Companies told to put pensions before dividends

The Pensions Regulator has warned that it will take a tougher line on companies that prioritise shareholder dividends over plugging pension deficits. The regulator used its annual funding statement to warn that pension fund trustees should hold companies to account. “Trustees need to ensure that contributions to the scheme feature prominently in their employer’s considerations and that its legal obligations to the scheme as a creditor are recognised ahead of shareholders with no legal entitlement to dividends, but who may exert pressure on the employer to obtain them,” it said.

The Times, Page: 40 Financial Times

Sterling heads towards $1.30

Sterling is close to heading back above $1.30 for the first time since September as investors cut their short positions amid hopes that a hard Brexit is less likely and ahead of an expected surge in inflation. Traders claim to have been reassured that Theresa May will not lead the country into a hard Brexit.

The Times

Oil Prices its highest in more than three weeks, topping $52 a barrel after Saudi Arabia and Russia said that supply cuts need to last into 2018, a step towards extending an OPEC-led deal to support prices for longer than first agreed.

Gold rose as U.S. political turmoil, a missile test by North Korea and a worldwide cyber attack fuelled demand for safe-haven assets, while weaker than expected U.S. data pushed the dollar lower, making gold cheaper for holders of other currencies.