Business News 30th August 2017
CPA hopes to inform, with its daily bite-size business news on Wednesday 30th August 2017, filled with stories we think will interest our members and visitors.
Markets Round up
The FTSE recovered partially from the morning lows yesterday by 50 points to fall only 64 to 7337 (0.9% down on the day) after being hit by negative sentiment in the Asian markets, following north Korea’s missile testing over Japan. the morning dip below 7300 was the indexes lowest point since the beginning of May. The FTSE 250 also fell 0.7% to 19,528. The European indexes were also down with the Euro Stoxx 50 & 600 both down 1% to 3388 & 368.4 respectively. US shares however stabilized as investors started to shake off concerns about Korea with the S&P500 up 0.1% to 2446 and the Nasdaq up 0.3% to 6302 despite Trump responding to the Korean Missile launch by saying “all options are on the table” and the ongoing disaster in Houston. Asia carried that momentum forward as Japanese indexes climbed 0.6%, The Hong Kong Hang Seng climbed 1.2%, Korea climbed 0.3% and India climbed 0.8%. Only China failed to join the party with the CSI 300 flat overnight.
Oil prices slipped lower as the market grappled with the shutdown of 13 percent of the refining capacity in the United States after a hurricane ripped through the heart of the country’s oil industry. WTI is down to $46.1 and Brent to $51.4.
Gold prices continue to inch up their highest since November at $1311.3 as mounting geopolitical tensions over a new North Korean missile launch stoked demand for safe-haven assets and weighed heavily on the dollar and equities.
The Euro weakened slightly (0.5%) against the pound to 1.081. The US dollar strengthened 0.5% to 1.2915. The Yen weakened 1% to 142 as investors returned to “risky” assets.
Late payments put economy at risk
The FSB has warned that big businesses which delay payments to their smaller suppliers are putting the economy at risk. National chairman Mike Cherry said that a third of payments made to small firms are being paid late. “These practices are immoral, with the largest businesses using their dominant position to squeeze small suppliers and improve their cashflow,” he warned.
SME Mortgages
A new business bank for SMEs, has completed its “mobilisation” phase and has now opened for business. Redwood Bank is offering secured SME mortgages for business owners, as well as for experienced commercial and residential property investors.
House price growth slows
House price growth slowed to 2.1% in August, from 2.9% in July, amid fears Brexit-fuelled inflation is placing pressure on household spending, says the Nationwide. Property values fell for the first time since May, down 0.1% month-on-month to an average of £210,495. However, property prices are still predicted to rise by 2% in 2017.
Credit Card debt
One in five people struggling with debts have seen their credit card limit automatically increased – a higher proportion than for cardholders in general, a charity has claimed. Citizens Advice said 18% of those struggling financially had seen the limit increased without request, compared with 12% overall. It wants a ban on increases without a cardholder’s explicit consent. The regulator has estimated that 3.3 million people are in persistent debt. In a report published earlier this year, the Financial Conduct Authority (FCA) said that “customers in persistent debt are profitable for credit card firms, who do not routinely intervene to help them”.
Revenue falls at a fifth of small firms
A fifth of SMEs polled by Citibase say they have recorded a fall in revenues as a result of the Brexit vote. The quarterly poll of 1,000 firms also highlights declining confidence among small employers. However, a study by private-equity firm ECI Partners shows that the UK’s fastest-growing businesses are still keen to export to Europe. The survey showed that half of 350 firms questioned during July and August said they expected revenues would climb by at least 20% this year.
Evening Standard, Page: 38
Business rates warning went unheeded
The government has been accused of failing to act on warnings that small firms would be hit by a punitive ‘staircase tax’ because of changes to business rates. According to the Times, the government was warned of “adverse consequences” for businesses by the Royal Institution of Chartered Surveyors, the Rating Surveyors’ Association and the Institute of Revenues Rating and Valuation. The groups are said to have written to Marcus Jones, the local government minister, in February last year, after a Supreme Court ruling which means that offices on different floors are now treated as separate companies when it comes to calculating business rates. In his reply, Mr Jones defended the changes, which have hit 30,000 small businesses with rates increases of up to £15,000.
The Times, Page: 13
NI changes push up pensions costs
Changes to NI mean Britain’s lowest-paid self-employed workers are about to see a fourfold increase in the cost of their pensions contributions. From April, the Government is simplifying the tax system for the self-employed and scrapping the Class 2 NI category. Consequently, anyone who wants to continue protecting their entitlement to the full state retirement pension will instead have to pay the much higher Class 3 rate of £14.45 a week, or £733 a year.
Independent i, Page: 2
Big companies’ tax underpayment rises 14% to £24.8bn
HMRC says large firms potentially underpaid £24.8bn in tax in the year to March – up 14% on last year and 31% higher the sum from two years earlier.
Brexit
European Commission president Jean-Claude Juncker has delivered a fresh rebuke to Theresa May over her Government’s handling of the Brexit process. Juncker said official papers setting out the government’s positions were not satisfactory and it was “crystal clear” that an “enormous amount” of issues needed to be settled before talks on a future trade deal could begin. Officials from Brussels and the UK were continuing negotiations in the latest round of the withdrawal process, but Juncker’s comments are further evidence of the European Union’s frustration with the approach being taken by the Prime Minister and Brexit Secretary David Davis. Junker said the UK “hesitates showing all its cards” but said “none” of the government’s position papers was “satisfactory”. His rebuke to the approach being taken by Prime Minister Theresa May and Brexit Secretary David Davis came after Brussels’ chief Brexit negotiator Michel Barnier said he was concerned about the lack of clarity and insisted “we must start negotiating seriously”.
US Housing
US house price growth was steady in June, according to the S&P/Case-Shiller National Home Price Index. The 20-ctiy index was up 5.7% in the year, unchanged from the previous month and in line with economists’ expectations. Meanwhile, the national home price NSA index covering all nine US census divisions was up 5.8% in June compared to a 5.7% increase the previous month.
Self Driving Delivery Test
In the next few weeks self driving delivery cars will be tested on some of Domino’s customers in the US city of Ann Arbor in Michigan. The aim is not to test if self-driving cars work, but to see if customers are happy to go out of their homes to collect the pizza from an empty car. The research is being carried out with Ford, which plans to start making self-driving vehicles in 2021.
Or see our recent previous news pages
Business News 29th August 2017
Business News 23rd August 2017
Business News 22nd August 2017
Business News 21st August 2017
Business News 18th August 2017
Business News 17th August 2017
Business News 16th August 2017
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