GDP Rises – business news 11 September 2020.
James Salmon, Operations Director.
GDP rises, trade negotiations, calls to extend furlough plus covid-19, market and other business news.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
GDP rises 6.6%
The UK economy grew by 6.6% in July, according to official figures, but still remains far below pre-pandemic levels.
It is the third month in a row that the economy has expanded.
But the Office for National Statistics (ONS) said that the UK “has still only recovered just over half of the lost output caused by the coronavirus”.
The UK’s economy is still 11.7% smaller than it was pre-lockdown in February.
The 6.6% growth in July is also slower than the 8.7% rise we saw in June.
Commenting on the latest UK GDP figures, Douglas Grant, Director of Conister, said: “Today’s figures show momentum returning to the UK economy, with a 6.6 percent rise in GDP for July reflecting the impact of the partial re-opening of the UK economy and a recovery on the UK’s output.
While the shape of the recovery depends on many known unknowns, for the SME sector, which is entering the final quarter with the challenges of 2019 and 2020 – Brexit and Covid-19 – bundled into one, it is vital that we continue to open new channels for distributing much needed liquidity. SMEs have shown a great deal of adaptability and resilience in the face on changing consumer behaviour and as such it is critical that the government schemes – working in partnership with specialist lenders – continue to support the sector so that we can return to pre-crisis growth levels as soon as possible and avoid the downward spiral of output and job losses.
UK signs first major post-Brexit trade deal with Japan
The UK has signed its first major post-Brexit trade deal with Japan that aims to boost trade between the countries by about £15bn.
International Trade Secretary Liz Truss said it was an “historic moment”. She said it would bring “new wins” for British businesses in manufacturing, food and drink, and tech industries.
Critics however said that while the deal may be of symbolic importance it would boost UK GDP by only 0.07%, a fraction of the trade that could be lost with the EU.
MPs urge Sunak to consider furlough extension for viable firms
MPs on the Treasury Committee are urging the Chancellor to consider a targeted extension of the furlough scheme so businesses with a chance of surviving the pandemic have an opportunity to do so. In a wide-ranging report on the impact of COVID-19 on the economy, the MPs said Rishi Sunak should consider extending the more generous terms for universal credit and have a plan for helping debt-troubled SMEs, or risk a longer recession. The report added that tax rises were likely to stifle economic recovery, but indicated that the Committee would support the Chancellor if he scrapped the Conservative party’s manifesto pledge to maintain the pensions triple lock.
Corruption is the basis of UK’s wealth
The Guardian’s George Monbiot writes on corruption in the UK describing how research has revealed that three offshore centres are responsible for $1.1trn of illegal money flows annually. Monbiot rails against the City’s secrecy (it is exempt from FoI laws) and the freedom to hide ownership details when creating a company. He goes on to say the involvement of Britain’s bankers in global money laundering is a “perpetuation of colonial looting” and claims that processing “everyone else’s corruption is the basis of much of the wealth of this country.” Monbiot adds: “When you start to understand this, the contention by the author of Gomorrah, Roberto Saviano, that the UK is the most corrupt nation on Earth begins to make sense.”
Warning on using life expectancy data for planning
Joseph Lu, director of longevity science at Legal & General Retail Retirement Income, has warned that national life expectancy data is not a suitable tool for retirement planning. He said: “National life expectancy data is not suitable for planning as it implies there is a one in two chance of outliving the figure. It doesn’t account for health, wealth and other important factors. If we would like a 90% chance of achieving life-long financial security, for age 65, plan for living to 100. This means planning for 35 years.”
Burden of crisis must not fall only on working people
Writing in the Express, Gary Stevenson, an “inequality economist” and former trader, talks about a report from Tax Justice UK based on the responses of ordinary people across the UK when asked about tax. He says Brits are increasingly irked by loopholes allowing the wealthy to skirt tax laws and many feel inequality is only growing. With huge rises in government debt as a result of rescuing the economy from the coronavirus crisis, Stevenson says the weight of this burden must not fall just on hard-working people but on the millionaires and billionaires too
How to rebound from COVID without imposing tax rises
In an opinion piece for the Telegraph, John Mills argues that to recharge the economy coming out of the coronavirus crisis, the government should avoid introducing tax rises and spending cuts, and instead look to increase investment in categories with the highest total returns to the economy, which cluster around mechanisation, technology and power; and that to make these industries competitive, the pound should be brought down to a point where it is more profitable to invest in new production facilities in the UK rather than in China or Germany.
Reprieve for tenants facing eviction
A “truce” on enforcement action for tenants facing eviction in England and Wales this Christmas has been announced. The Government also said that evictions will not be enforced in areas subject to local lockdowns as the pandemic continues. Housing Secretary Robert Jenrick added that it has increased notice periods to six months in an “unprecedented measure”.
Failure to return spectators to stadiums will cost clubs £150m a month
The Premier League and English Football League estimate more than £150m could be lost every month across football clubs if Boris Johnson delays the Oct 1 return of crowds. Two of the 12 remaining trial games have now been scrapped after organisers confirmed they were no longer safe to continue. Meanwhile, restricting capacity to 1,000 fans means is not deemed financially viable. Half of financial directors working in the English professional game have concerns over the health of their clubs, according to a survey by BDO. Around 45% of those surveyed said their club’s finances were “in need of attention”, compared to 21% in 2019.
Scots workplaces must be “allowed to open quickly”
The Scottish Chambers of Commerce has warned that businesses will struggle to survive a return to stricter coronavirus measures after Nicola Sturgeon halted any return to offices for at least another three weeks. Its CEO, Dr Liz Cameron, said: “We need to move forward to ensure our economy can recover and stem the loss of jobs where possible. That’s why we need our offices to be allowed to open quickly, particularly those where businesses have worked closely with employees and invested heavily in safety procedures.” Andrew McRae, the Federation of Small Businesses (FSB) Scotland’s policy chair, added that the decision will have “consequences for firms reliant on workers’ footfall in our town and city centres.” He went on to suggest that “innovative new help might be required for those firms currently facing a footfall.”
NatWest tops support lending league
Bank of England data show NatWest has been the biggest user of the Term Funding Scheme for smaller firms so far, which has extended £14.3bn to lenders. NatWest tapped the central bank fund for £5bn while Nationwide drew down £3.2bn, followed by Santander UK at £2.5bn.
Covid-19 general news
Global cases passed 28 million and deaths exceed 909,000.
The Government added Portugal and Hungary to its quarantine list.
Western Europe has now surpassed the U.S. in new daily Covid-19 infection numbers, re-emerging as a global hotspot for the virus having seemingly brought it under control before the summer.
France recorded nearly 10,000 new cases on Thursday, the most since its lockdown ended four months ago. Cases are rising in Denmark too, surpassing neighbor Sweden, which didn’t impose a lockdown.
China began testing a nasal spray vaccine for the coronavirus in what would be a world first
Markets.
The FTSE 100 fell 0.2% yesterday and the pound continued its fall as the UK and EU were set to hold emergency talks over PM Johnson’s decision to breach the Brexit withdrawal agreement by adding several “clarifications”.
The EU has threatened the UK government with legal action if it does not ditch its controversial Internal Market Bill by the end of the month. Angered Tory backbench MPs have launched a bid to amend the new law.
The ECB left interest rates unchanged at record low levels, as it waits to see the trajectory of the Eurozone’s economic recovery. However, market analysts expect further action from the central bank later this year amid signs that the rebound is slowing. Christine Lagarde, its president, said the euro zone was experiencing a “strong rebound” in activity as it emerges from full lockdown. The bank now expects the contraction in the euro zone’s GDP this year to be slightly less than previously forecast, and inflation to undershoot its target of close to 2% for some time.
In the US the numbers claiming unemployment rose with 884,000 initial claims last week. Meanwhile, Democrats blocked a pared-down Republican covid-19 relief bill in a Senate vote. They say it would have done too little to address the economic devastation of the pandemic and were united in opposing it; all Republicans but one voted in favour.
U.S. stocks are headed for a second week of declines after the selloff in megacap tech names resumed, highlighting the lingering concerns over lofty valuations in certain pockets of the market.
In Asia, Nikkei closed up 0.74%. Hong Kong HSI is up 0.70%. China Shanghai SSE is up 0.79%. Singapore Strait Time is down -0.39%. Overnight in the US the S&P 500 dropped -1.76%. and the NASDAQ dropped -1.99%.
Deloitte makes first move to restructure
The Times reports on how Deloitte will become the first Big Four accountancy firm to set out a new governance structure to comply with the Financial Reporting Council’s demands for a break-up of their operations. The Big Four have until the end of next month to tell the regulator how they plan to implement a requirement to separate audit from other parts of their business. Deloitte will establish an audit governance board in January, chaired by Baroness Ford, that will provide independent oversight of the UK audit practice. Additionally, Stephen Griggs, deputy chief executive and managing partner for audit and assurance, will become UK managing partner.
Don’t let Covid-19 bust your business!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?
Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
You put up with the PAIN – now claim the GAIN!
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?
How many of your invoices are paid late each month – 20, 50, 100 or more?
At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim!
At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.
For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.