Business News 28th July 2017
CPA hopes to inform, with its daily bite-size business news on Friday 27th July 2017, filled with stories we think will interest our members and visitors.
Markets Round up
Yesterday markets were broadly flat in the UK despite the flurry of companies reporting before their executives jetted off into the sun. The FTSE 100 closed down 0.1% at 7443 while the 250 performed better closing up 0.6% at 19,879. The FTSe was dragged down by Astrazeneca after its lung cancer treatment had failed to meet objectives. Elsewhere Diegeo impressed while Lloyds didnt. European stocks were level too with the Euro Stoxx 50 closing up just 2 points at 3493. US shares faltered with the S&P500 falling 0.1% to 2475 and the Nasdaq falling 0.6% to 6382 off the back of earnings reports. Asian stocks picked up that baton and ran with it as traders took profits and ran. Oil continues to strengthen with WTi up to $49.1 and Brent at $51.7. The pound strengthened against the euro to €1.1178 and fell against the dollar to $1.3085.
SMEs bullish despite economic uncertainty
Almost 80% of SMEs believe their business will grow in the next 12 months, despite uncertainty generated by the Brexit vote and the general election. Smith & Williamson’s latest Enterprise Index found 78% are predicting growth while only 37% expect the economy to improve over the coming year, down from 50% in the first quarter of 2017. Guy Rigby, head of entrepreneurial services at Smith & Williamson, said both the government and larger businesses need to support small businesses more to help them through a challenging period, and to ensure the UK “remains the premier place to start, develop and scale-up a business.”
P2P Finance News
Brexit
Parliamentary politics may be on hold at the moment, but with the Article 50 clock ticking, Philip Hammond seems to want to get ahead of the curve. At a meeting earlier this week, the Chancellor told business leaders he wants to negotiation a simple “off-the-shelf” transition deal with Brussels to maintain current trading relations with Europe for at least two years after Brexit, as reported in the Financial Times. Hammond echoed calls from some in the business community saying he wanted a “standstill” transition whereby companies would have full access to the Single Market and Customs Union, followed by a further “implementation phase” for when a new deal is established.
Irish Border
Irish Prime Minister Leo Varadkar wants the Irish sea to become the post-Brexit border with the U.K., without any customs and immigration control at the land border with Northern Ireland, the Times reported.That would upset members of the Democratic Unionist Party, MPs from Northern Ireland, because it would blur its identity as part of the U.K. The newspaper quoted DUP MP Ian Paisley Jr. as saying that “the only people discussing a sea border are people who should know better.” The Irish government has turned away from a solution that would use surveillance technology such as cameras to patrol the land border between Northern Ireland and the Republic of Ireland, the newspaper said.
Costly Fruit
British households are in for a rude awakening when they see just how expensive oranges from Spain and artichokes from France will become with Brexit, the Institute for Fiscal Studies warned in a report about what leaving the EU will mean for grocery bills. About 30 percent of food sold in the U.K. is imported, and 70 percent of that comes from the EU, the report said. The poorest 10th spend 23 percent of their income on food compared with 10 percent for the highest earners, it said.
Amazon
Amazon beat revenue estimates but fell short on earnings in the second quarter, as it continued to invest in areas of growth. The company’s shares fell more than 3% in after-hours trading. EPS: 40 cents per share vs. $1.42 per share expected, Reuters analysts estimated; Revenue: $37.96bn vs. $37.18bn expected, Amazon Web Services (AWS) revenue: $4.1bn vs. $4.08bn expected.
Astrazeneca
Pascal Soriot, the chief executive of FTSE pharmaceutical company AstraZeneca is under increased pressure after £10bn was wiped from the firm’s market value yesterday. This was a result of the revelation of major setbacks in one of its key lung cancer drug trails. The failure of the first stage of the ‘Mystic’ drug trails is not the end for the treatment itself, with a second stage of results due to be announced next year. Soriot has called for patience, however this did little to assure investors and Thursday saw the share price crash 15%.
HMRC overcharging thousands of pensioners accessing pots
The Express details how savers taking lump sums from their pensions are being overcharged because HMRC assumes they will be withdrawing the same amount each month. Steve Webb, director of policy at Royal London, said: “It is outrageous that in just three months HMRC has over-taxed people by more than £26m. The rules need to be changed so that only basic rate tax is deducted and any extra tax due is collected through the normal tax return process. This would be a far fairer system.”
Daily Express
Manufacturers fail to utilise R&D tax credit
A large percentage of UK manufacturers are not taking advantage of research and development (R&D) tax credits, according to new statistics from RSM. Only 59% of manufacturers questioned have claimed R&D tax credit and just 39% of companies surveyed felt very confident that they could access R&D credits or business grants.
Manchester Evening News
Consumer confidence falls to lowest level since Brexit vote
Consumer confidence has returned to a level not seen since the immediate aftermath of the Brexit vote, according to the latest GfK survey. Consumers’ expectations fell in each of the five main categories bar one in July with the main consumer confidence index falling a further two points after a five-point dip in June to hit a reading of -12. However, both GfK and a separate Lloyds survey found confidence in personal finances was up slightly.
Financial Times, Page: 3
Delaying a rate rise makes problems worse
Writing in the Standard, Andrew Sentance, senior economic adviser at PwC, questions the BoE’s continued determination not to raise interest rates, despite its fears over increasing consumer borrowing. “The MPC has put off raising interest rates for too long already, and delaying further is likely to make our economic problems worse, not better,” he says.
Evening Standard, Page: 48
Treasury official handed BoE role
Senior Treasury civil servant Sir Dave Ramsden has been selected as the Bank of England’s new governor for markets and banking, replacing Charlotte Hogg who resigned in March. Sir Dave will also become a member of the Financial Policy Committee, the Prudential Regulation Committee and the Court of the Bank of England. Chancellor Philip Hammond said: “Sir Dave’s unrivalled experience at the centre of UK economic policy for more than two decades gives him the thorough grounding needed to be successful in his new role.”
BBC News
Hammond: Labour not being straight with the public
Conservative MPs are piling the pressure on Jeremy Corbyn to explain his economic policies. In a letter to John McDonnell, the shadow chancellor, they claim Labour plans would mean public sector net debt will be £250bn higher than under the Conservatives by 2021-22, costing taxpayers an extra £5.8bn a year in interest payments. Chancellor Philip Hammond said: “Labour would take out an enormous loan but are pretending they wouldn’t have to make cuts elsewhere to pay for it. They aren’t being straight with the public.”
The Daily Telegraph, Page: 2
Previous News pages
Business News 27th July 2017
Business News 26th July 2017
Business News 25th July 2017
Business News 24th July 2017
Business News 21st July 2017
Business News 20th July 2017