Inflation sinks and the BOE to expand QE – business news 18 June 2020.
18 June 2020.
James Salmon, Operations Director.
Inflation sinks, Bank of England expands QE, covid-19, markets, post furlough redundancies, furloughed staff working, PMIs, fair tax retailers and a lot lot more
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.
Covid-19 general news
In the U.S. states including Texas, Florida and Arizona have reported a jump in covid cases, sparking concerns about a second wave of infections.
In Beijing, the new outbreak exceeded 150 cases in China’s worst flare-up since Wuhan.
Qantas Airways Ltd. canceled most international flights until late October after the Australian government said the country’s borders are likely to remain closed until next year.
Markets.
After a strong start, the FTSE100 closed just 10 points higher at 6253 as traders lacked conviction of the direction of risky assets and some profit taking was engaged in. In the US, markets also lacked clear direction with the Nasdaq up 0.15% and the S&P down 0.36%.
Oil prices fell on fears over fresh outbreaks of COVID-19, but prices drew some support from stimulus measures and positive tests of a drug that could save some critical patients.
Gold prices were pressured by a stronger dollar and as optimism over a potential COVID-19 drug and economic recovery dented demand for bullion and supported riskier assets.
Inflation sinks to four-year low
A record fall in fuel prices pushed the UK’s inflation rate down to 0.5% in May, the second full month of the coronavirus lockdown. This means inflation, which was 0.8% in April, remains below the Bank of England’s target of 2%. Fuel prices declined by 16.7% during May, the Office for National Statistics (ONS) said, dragging the Consumer Prices Index to the lowest level since June 2016.
The lockdown has forced the ONS to change the way it collects data on prices as social distancing means that statisticians have to rely to a greater extent on online prices. Jonathan Athow, deputy national statistician at the ONS, said: “The growth in consumer prices again slowed to the lowest annual rate in four years.” Samuel Tombs, chief UK economist at Pantheon Economics, says headline inflation is set to fall even closer to zero in the coming months.
BoE expected to boost QE
The Bank of England is broadly expected to increase its asset purchase programme by at least £100bn today, as the central bank ramps up quantitative easing to shore up the economy. Economists also almost unanimously predict that the Monetary Policy Committee will keep the benchmark interest rate at a record low 0.1%.
Governor Andrew Bailey is set to bolster UK stimulus at the Bank’s Monetary Policy Committee meeting. The expansion of quantitative easing would be an attempt to stabilise financial markets amid a huge increase in government borrowing. While speculation over negative rates has abated somewhat, there’s been some talk that the BoE could impose yield-curve control – something pioneered by the Bank of Japan – in the coming months.
Half of firms expect post-furlough job losses
A YouGov poll shows that half of businesses say they will have to reduce their workforces within three months of the furlough scheme ending.
Of 503 business leaders surveyed, 34% said they would not lay any staff off, while 21% said they would cut 10 or more jobs. The study also found that 48% of bosses said the Government’s response to COVID-19 in regard to business has been good, compared to 38% who said it has been bad.
While eight in ten respondents expect the economy to be in worse shape in a year than it was before the pandemic, six in ten believe their own business will be in the same condition or better than it was before the coronavirus crisis.
One in three furloughed staff told to work
A survey by Crossland Employment Solicitors shows that a third of furloughed employees have been asked to carry out work while receiving funds under the Government’s coronavirus job retention scheme.
Despite ministers warning that employers would be committing fraud if staff were made to work while furloughed, the poll saw 34% of respondents say they had been asked to return to work.
A third of furloughed employees had been asked to carry on doing their usual job, with 29% asked to undertake more administrative tasks and a fifth asked to either cover someone else’s job or to work for a company linked to their employer while on furlough.
HMRC says that as of June 14, it had received 3,079 reports of fraudulent furlough-related claims.
PMI uptick points to optimism
NatWest’s Small Business PMI suggests optimism is increasing, with the index, which monitors output at small private sector firms in the services, construction and manufacturing industries, rising from 14.6 in April to 26.3 in May.
NatWest’s principal economist Stephen Blackman said the uptick shows that “at least, the worst should be behind us.” He notes that while over a third of firms in services expect a further reduction in activity this year, fewer firms now anticipate a reduced workforce than they did in April.
Mike Cherry, national chair of the Federation of Small Businesses, has urged the Government to deliver fresh support for small firms “as they evolve and adjust to the new norm.”
US looks to suspend global tax talks
The US has called for negotiations over a new law to allow European countries to tax the profits of large American technology firms to be suspended. In a letter to finance ministers including Chancellor Rishi Sunak, US treasury secretary Steven Mnuchin said: “This is a time when governments around the world should focus their attention on dealing with the economic issues resulting from COVID-19.”
The letter, which was also addressed to French economy minister Bruno Le Maire and the finance ministers of Italy and Spain, said discussions over a global agreement that would allow countries to tax profits made in their jurisdictions had reached an “impasse”. Mr Mnuchin also reiterated that the US “remains opposed to digital services taxes and similar unilateral measures “.
He warned: “If countries choose to collect or adopt such taxes, the US will respond with appropriate commensurate measures.” The Treasury said yesterday that the UK intended to press ahead with its own digital services tax, which is already enshrined in British law.
Consumers prefer fair tax retailers
A poll for the Fair Tax Mark campaign shows that four in five consumers would prefer to give their custom to a retailer that is paying its fair share of tax. The survey of 2,000 people shows that a proportion want firms benefiting from Government support amid the coronavirus crisis to be forced to agree to terms prohibiting tax avoidance. Fair Tax Mark’s Paul Monaghan said: “The public want businesses to prove that we’re in this together.” Commenting on the findings, the Treasury said: “HMRC will tackle any business that doesn’t pay its fair share of tax.”
KPMG staff could return to office after app released
KPMG staff have been told they will have to download a mobile app to get permission to begin working from the firm’s offices again, as part of a three-stage process involving a risk assessment form.
Anna Purchas, the firm’s head of people, and Tim Jones, its COO, sent an email to workers advising them of the move. Ms Purchas said KPMG employees’ applications to come to work would be manually assessed, with reasons for their request and the amount of space available taken into account. Meanwhile, Deloitte is believed to be developing a similar tool, while PwC is working on a workforce contact tracing app.
EY to shut offices for a day
Staff at EY are to be encouraged to use annual leave, with many employees holding back from taking holidays as lockdown restrictions continue. Part of the firm’s operations will be shut on July 3, “enabling people in several of our businesses to take one day’s holiday that day.” The firm, in a statement, said: “This is intended to protect individual wellbeing while also enabling us to ensure that we continue to serve clients and run our business effectively throughout the year.”
Nationwide increases minimum deposit
Nationwide has announced that it will only lend to borrowers with a deposit of at least a 15%, scrapping its deal for those with 10% of the property’s value amid concerns about falling house prices in the wake of the coronavirus crisis. Nationwide, which before the pandemic offered loans where a deposit of just 5% was needed, said the change, which is due to ” unprecedented times and an uncertain mortgage market”, is “prudent”. It added that the 85% loan-to-value (LTV) ceiling will help protect borrowers from potentially slipping into negative equity. It also noted that the existing mortgage customers will still be able to obtain loans at up to 95% LTV.
Boohoo secures Oasis and Warehouse
Online fashion retailer Boohoo has snapped up the Oasis and Warehouse brands, saying it will pay £5.25m for the online businesses and intellectual property of the two brands from Hilco Capital, which acquired them out of administration in April.
HSBC
HSBC will revive part of a restructuring plan that includes axing 35,000 jobs. Europe’s biggest bank postponed the cuts because of the covid-19 pandemic
London City Airport
London City Airport boss have said there is “clear early demand” for a return to flying. Speaking ahead of the airport reopening for passenger flights on Sunday, chief executive Robert Sinclair said many people want to fly for leisure and business. The airport has been closed to commercial and private flights since 25 March due to the covid-19 pandemic.
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.
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.
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