Business News - 23rd May 2017 - CPA | The Credit Protection Association

Business News – 23rd May 2017

Firstly the thoughts of all at CPA are with the friends and family of those killed and injured in the bomb blast in Manchester last night at the Manchester Arena.

Manufacturing reaches New Highs

The Manufacturing sector is driving a rise in business confidence in the United Kingdom according to the Credit Managers Index which is produced quarterly by The Chartered Institute of Credit Management. The 1.5-point rise in manufacturing confidence sees it close at 62.7, an all-time CMI high. This brings it to a 3.7-point year-on-year rise and the second successive quarter that the sector has risen. This demonstrates the positive effect that currency fluctuations are having on the UK’s exporting market since the Brexit referendum.

Linked Finance receives FCA authorization

Irish P2P lender Linked Finance has received full authorization by the UK’s Financial Conduct Authority (FCA) enabling it to move into the UK market. CEO Niall Dorrian commented: “It puts us ahead of the curve in terms of preparing for any regulation of the sector in Ireland. It also demonstrates to lenders and borrowers here at home that Linked Finance operates to the highest standards.”

Irish Independent

Transferwise to launch international bank account for SMEs

Transferwise, the online forex platform, is launching an international bank account for SMEs. Taavet Hinrikus, the firm’s founder and CEO, said that the Borderless service would enable balances in 15 currencies and make transfers at the real mid-market exchange rate.

The Times, Page: 48 Financial Times, Page: 18

Brussels wants all member states to adopt euro by 2025

A leaked European Commission reports states that the EU wants all states which have not so far adopted the Euro to start using the single currency by 2025. Nine of the 28-member state in the EU are currently not part of the single currency. The UK and Denmark are exempt, but the remaining seven nations all agreed to adopt the euro when they joined. The Telegraph reports that EC plans for a eurozone fiscal union include a dedicated treasury backed by an employment or social security fund bringing an unprecedented level of shared risk. “This is something that will set alarm bells ringing in Northern Europe,” said Guntram Wolff, director of the Breugel think tank in Brussels. “However you design this, it will lead to fiscal transfers,” he said. “All forms of insurance lead to moral hazard and then you have to deal with it.”

Daily Express The Daily Telegraph

Brexit fears could cost UK top FDI spot

Concerns over Brexit could lead to Britain losing the top spot for FDI in Europe, according to EY. Its study found that 31% of investors expect the UK’s attractiveness for FDI to decline over the next three years, with 9% of respondents saying Britain’s withdrawal from the EU would cause them to shift their investment plans from Britain to Europe. Mark Gregory, the chief economist at EY, said: “The research suggests that the EU referendum vote and its aftermath may be having an influence on global perceptions of the UK’s medium to long-term attractiveness. Decisions on the majority of investments made in 2016 would have been made up to three years ago, which helps to explain the UK’s solid performance last year.”

Independent i, Page: 43 The Daily Telegraph

Workers suffer low pay to fund pension deficits, report says

Workers may be suffering from lower pay as a result of their employers spending millions of pounds to keep their pension schemes afloat, according to a report by the Resolution Foundation, which says such employees are unfairly losing an average of £200 a year, even when they are not entitled to the pension pots.

BBC News The Sun, Page: 12 Daily Mail, Page: 61

EU accused of anti-City ‘protectionism’

Former Conservative party treasurer Michael Spencer has denounced efforts by some EU countries to strip London of key financial services after Brexit. Speaking to BBC Radio 4’s Today programme, he said: “Damaging London, in my opinion, will also damage Europe and I think it is in the interests, certainly of the UK but certainly of the EU as well, to make sure that London’s capability as a global financial centre remains properly intact and undamaged”.

BBC News

Scrutiny looms for investment consultants

The Times’ Patrick Hosking considers the possible review of the investment consultant industry by the CMA, which according to the FCA, which is considering a referral to the regulator, is handicapped by serious conflicts of interest. Aon Hewitt, Mercer and Willis Towers Watson dominate the industry and a change of recommendation by one of them is enough to boost flows into the approved asset manager by 19% in the following quarter, says Hosking. Consultants have been trying to woo the CMA with concessions but the FCA’s initial report suggests these moves may not be enough.

The Times

Accountants are increasingly ambitious, survey reveals

Accountants are increasingly ambitious in their career progression routes, as well as wanting more recognition for their work, according to Hays’ What Workers Want report, which revealed over two thirds aspired to reach senior positions such as CEO and CFO. Of the 2,100 accounting and finance employers and employees surveyed, over three quarters (76%) claimed to be ambitious with private sector accountants (81%), part qualified accountants (76%) and credit controllers (75%) among the most ambitious.

CCH Daily

Tories face taxing times as Labour spends freely

The Conservatives have said a cap on care cost liabilities would not require new tax rises or spending cuts as Theresa May defended the principles of the party’s social care policy. An editorial in the Mail accuses Jeremy Corbyn of gross duplicity in his criticisms of the Tories’ solutions, stating that Labour’s plan to slash the IHT allowance will affect many more families than the planned Tory care reforms. Beyond the care issue, Mr Corbyn’s plans to abolish tuition fees would cost £9bn, funded through increases to corporation tax. However, it has been pointed out that bringing forward the policy to this financial year would not give Labour time to increase the tax. Writing in the Telegraph, William Hague says the Tories are being honest with voters and that Labour has spent its tax rises many times over. Finally, experts from Oxford Economics say a Labour spending spree funded through high debt and taxes might bring a short-term boost, but in the long run would pull the economy down. By contrast, a Tory government would generate stable growth.

The Times, Page: 1, 2, 10-11 Daily Mail, Page: 8-9, 16 The Daily Telegraph, Page: 5, 18

Scots back 50p tax rate

A YouGov poll for the Times shows that more than two thirds of Scottish voters support plans by Nicola Sturgeon to reintroduce the 50p top rate of income tax for the highest earners. There is also backing for SNP proposals to make middle-income earners pay more than their counterparts in England, although by a narrower margin. Some 40% would like to see the extra revenue directed towards improving public services, compared to 40% who oppose the idea. Despite the positive reaction from the electorate, the survey also revealed that just 37% of Scots want tax increases used to replace money taken away by welfare cuts, while 49% are not in favour.

The Times, Scotland

Richard Evans’ tips for Tory tax simplification

In response to the Conservatives’ pledges to simplify the tax system, the Telegraph’s Richard Evans argues that, other than pensions, strong candidates for abolition or amendment should include the stamp duty surcharge for second homes, the two-tier inheritance tax system and the new tax regime for buy-to-let income. “I’d suggest that the length of the self-assessment tax return is a good proxy for the complexity of the system as it applies to ordinary taxpayers. A reduction of, say, 25% in the number of pages would be a welcome achievement,” he says.

The Daily Telegraph

Half think Tories will hike income tax, poll says

Over half think the Conservatives will raise income tax if they win the general election, according to Ipsos MORI, which found that despite the Government’s promises to take less tax from the less well-off, just one in three believe it will not. Among Conservative voters, almost half (46%) think a Conservative government will raise taxes.

Evening Standard, Page: 7

Conservative Climb Down

Theresa May’s Conservative party has been forced into a climbdown on a controversial manifesto promise known as the ‘dementia tax’ following sharp criticism of the party’s social care policy. May has now said there will be an “absolute limit” on the increase in social care costs for older citizens, during a campaign event for the Welsh Conservatives. May did not give further details on the plan to introduce the cap or how much it would be. Her suggestion that opposition Labour Party leader Jeremy Corbyn had made “fake claims” that some people would lose their homes under the policy were also found to be incorrect when the Guardian revealed that the manifesto carried no limit on how much people could end up paying for their care in old age.

Government to Review Zero Hour Contracts

The Government inquiry into controversial working practices is set to call for employees on zero-hours contracts to be given the right to request a move onto fixed hours. The “right to request” fixed hours will be similar to the present right to request flexible hours. Employers would have to respond “seriously” to the request and give reasons for their decision.

BBC news

House Prices

House prices rose for the fifth month in a row in May, according to a new survey that runs counter to recent industry research based on sale completions. Rightmove found that new homes coming onto the market were selling for an average 1.2% more than the month before, when there had been a 1.1% monthly rise but was slower than the 1.3% and 2.0% in March and February.

Business is blooming for women start-ups

New research from Oxford Economics shows that one in 170 people in the UK now works for a small creative business, making and selling unique products or gifts. The report was commissioned by notonthehighstreet.com. “In the last 10 years, thousands of creative small businesses have emerged all over the UK, creating jobs, driving wealth creation and contributing significantly to the economy,” says notonthehighstreet.com’s chief executive Simon Belsham. “Perhaps most importantly, however, these businesses are highlighting the huge change under way in the UK workforce – a transformation that is seeing more women in work and more people turning to self-employment and flexible working.” And some 89% of the notonthehighstreet.com partners are owned by women.

BBC news

U.S. Markets

U.S. shares rose, boosted by technology shares and by defense companies, which gained after the United States and Saudi Arabia signed a multi-billion dollar arms deal.

Germany

Germany’s economy expanded at a faster pace, as estimated in the first quarter, on domestic and foreign demand, data published by Destatis showed. Gross domestic product grew 0.6% sequentially, in line with preliminary estimate and faster than the 0.4% expansion seen in the fourth quarter. This was the fastest growth since the first quarter of 2016, when GDP climbed 0.7%. On a yearly basis, the calendar-adjusted growth slowed slightly to 1.7% from 1.8% a quarter ago. At the same time, the price-adjusted GDP climbed 2.9%, following the previous quarter’s 1.3% expansion.

Oil prices fell after President Trump proposed the sale of half the U.S. strategic oil reserves, even as producer club OPEC and its allies cut output to tighten the market

Gold prices were steady