Business News - 30th May 2017 - CPA | The Credit Protection Association

Business News – 30th May 2017

The FTSE100 touched a new all-time high on Friday mainly on the back of Sterling weakness leading the high foreign earning stocks such as BATS, Johnston Matthey and GlaxoSmithKline higher. Sterling dropped after opinion polls indicated that Teresa May’s lead over Labour had dropped from 20 to 5 points with less than 2 weeks until polling day.

The US economy

The US economy grew more quickly than expected at the start of the year amid a large increase in investment, revised data showed. Revised data from the Department of Commerce revealed that US gross domestic product expanded at an annualised rate of 1.2% during the first quarter of 2017, which was stronger than the preliminary estimate of 0.7%. Economists had anticipated a smaller upwards revision to 0.9%. Household consumption grew at a 0.6% pace over the quarter, marking a sharp slowdown from the 3.5% pace of growth seen during the previous three-month stretch. Non-residential investment on the other hand was very strong and was revised higher as well, from an initial estimate of 9.4% to 11.4%.

Renewable Energy

Rare good weather in Britain led to solar panels supplying one-quarter of the UK demand for electricity for the first time, according to the National Grid. Solar power in the UK produced a maximum of 8.7 gigawatts on Friday, 24.3% of the total electricity being used in the country at the time. Temperatures reached 28 degrees in some places across Britain on Friday, with the record solar level being reached at around midday. Head of National Grid’s control room operations Duncan Burt told The Independent that the increasing trend of using solar power is likely to continue. “We now have significant volumes of renewable energy on the system and as this trend continues, our ability to forecast these patterns is becoming more and more important,” Burt said.

Climate Deal?

Leaders from the world’s major industrialised nations failed to persuade US President Trump to back a landmark climate deal at a G7 summit in Sicily on Friday after hours of talks that were described by Germany’s leader as “controversial”. Paolo Gentiloni, the prime minister of Italy, said the group was also inching closer to finding common language on trade, a contentious issue between Trump – elected on an “America First” platform – and the six other leaders. But on the issue of climate, there was no breakthrough.

Euro & Italy

The Euro us tumbling broadly this week as traders are betting on an early election in Italy, that creates some political uncertainty again. Leaders of major political parties are going to discuss, in the coming weeks, a new electoral law with a proportional system similar to the German model. And it’s believed that an agreement is close between the leaders that could pull ahead the elections original scheduled in early 2018.

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British Airways

British Airways were running around “95%” of flights to and from London’s Heathrow and Gatwick airports on Monday following a weekend computer outage that grounded the company’s aircraft at both hubs and caused delays worldwide. “We are running at…just over 95% of the flights: That means…all long-haul flights in Heathrow…[and] just over 90% of the short-haul flights in Heathrow and all flights in Gatwick,” BA chief executive Alex Cruz said in a video published on the company’s Twitter feed. He said that over 75,000 passengers had been affected by the weekend computer failure and that two-thirds of them would have reached their destinations by the end of Monday, which was a public holiday at the end of a long weekend in Britain. British media have speculated the disruption could cost BA, part of International Consolidated Airlines Group SA, up to GBP150 million.

III

Voters back tax rise to fund NHS

A survey for the Independent i reveals widespread support for putting an extra penny in the pound in income tax to raise an estimated £6bn a year for the NHS. Support for the Lib Dem flagship policy was strongest in the South-west of England, where 81.5% of respondents said they would be prepared to pay the extra. And even in the region with the lowest support – the South-east of England – 77.1% said they would pay.

French officials in talks with banks about leaving London

François Villeroy de Galhau, the governor of the French central bank, has said that officials in France are having serious talks with financial institutions looking to move away from London as Britain prepares to quit the EU. Mr Villeroy de Galhau also stepped up the campaign to claim the City’s lucrative euro-clearing business by declaring that it is impossible for it to remain in London. The financial sector contributed about £71bn to the Exchequer last year, according to PwC, and removal of euroclearing could cost the City 83,000 jobs, according to EY.
The Independent, Page: 55 The Times, Page: 37

Independent i, Page: 6 Yorkshire Post, Page: 4

Are the Tories the party of low taxes?

Jeremy Nutall in the Independent i examines whether the Conservatives really are the party of lower taxation, as claimed by Theresa May. He concludes that it is broadly true that the Tories, both historically and in recent times, have been inclined to lower spending, and so levels of tax than Labour. But, he adds, it is also fair to say the Conservatives tend to overplay the extent of this difference.

Independent i, Page: 7

CFO optimism rises

Deloitte’s latest CFO Survey shows business optimism and risk appetite have continued to rise from post-referendum lows. The value of M&A deals between the rest of Europe and the UK has more than trebled, from $4.2bn in the first quarter of 2016 to $13.2bn in 2017. The findings come as the proportion of UK CFOs expecting M&A activity to decrease over the next three years as a result of Brexit fell from 40% immediately after the referendum to 11% in the first quarter of 2017.
Yorkshire Post, Yorkshire Vision, Page: 16

Small firms hit by rates relief delay

Small businesses across England, promised financial help to ease the burden of hikes in business rates, are still waiting. In the March Budget, the Chancellor promised that firms losing small business rate relief would not see their bills increase by more than £50 a month. However, the money has yet to flow to most businesses. Rates specialist CVS says 24,986 small businesses have lost all, or part, of their small business rates relief, and the delays are causing “panic and confusion”. The BBC notes that as the U-turn was announced after the new bills were already printed, and although local authorities are legally able to adjust existing bills, without the necessary published guidance from government they have no guarantee they will receive the money back from Whitehall.

BBC News

Migration plans would double UK unemployment

A study by the Migration Matters Trust has found that Theresa May’s plans to cut net migration to under 100,000 a year would almost double unemployment in the UK to more than 3m. It claims British workers would be the main losers from lower economic growth caused by the country having fewer people to drive business expansion and, in turn, consumer demand and spending.

The Independent, Page: 3

London home to most multimillionaires

Data compiled by GlobalData WealthInsight has shown that London is home to more multimillionaires than any other city in the world. The number of multimillionaires living in the capital has grown by 3.4% to 4,549 in the past year. London was followed by Tokyo, Singapore and New York. Dublin is also becoming more popular with the world’s wealthiest, due in part to Ireland’s low corporation tax regime.

Independent I, Page: 40