Businesses return to growth – business news 17 December 2020.
James Salmon, Operations Director.
Businesses return to growth, inflation falls to 0.3% in November, loan schemes hold off insolvencies, pandemic hits self-employed numbers and earnings, 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.
Businesses return to growth
UK businesses have returned to growth this month following a downturn driven by the England-wide lockdown in November, with the IHS Markit purchasing managers’ index (PMI) climbing to 50.7 in December from 49 in November on an index where a figure above 50 indicates expansion. Manufacturing led the way, with the sector’s PMI reading hitting a three-year high of 57.3, while the services sector, which makes up about 80% of the economy, saw a reading of 49.9. Chris Williamson, chief business economist at IHS Markit, said the PMI data suggests the blow dealt to the economy by the second wave of coronavirus infections “has so far been far less harsh than the first wave.” However, he added that the recovery “lacked vigour”.
Inflation falls to 0.3% in November
Inflation fell to 0.3% in November from 0.7% in October, Office for National Statistics (ONS) figures show. Discounting by clothing retailers helped pushed the consumer prices index down, with bigger discounts than usual offered on Black Friday. ONS deputy national statistician for economic statistics Jonathan Athow noted the impact of the “significant restrictions” in place across the UK. PwC economist Hannah Audino commented: “The acceleration of consumer price growth over the past two months has been cut short”, noting that “most of the main groups of goods and services experienced a fall in prices between October and November”. Yael Selfin, chief economist at KPMG, believes that prices could rise in the coming months, with “border frictions” as a result of Brexit driving up prices. She added that if a Brexit deal is agreed, inflation could rise to an average of 1.3% next year from 0.9% in 2020. Howard Archer, chief economic adviser to EY Item Club, believes consumer price inflation is likely to “edge back up” through December and in 2021.
Loan schemes hold off insolvencies
The Independent’s Ben Chu says that while large numbers of firms have been hit financially by the coronavirus crisis, the number of business insolvencies has fallen this year, with this in large part thanks to state-backed bank loans. Colin Haig of restructuring trade body R3 says the reason the impact of the pandemic “hasn’t shown up in the insolvency statistics yet is because of the extensive support the government has provided”. He adds: “Without it, we’d be in a very different situation – and a very grave one at that.” Mr Chu highlights that across a number of Government loan schemes, 1.5m firms have tapped £65bn of credit, while Bank of England figures show that net bank lending to SMEs in the year to October was more than 40 times higher than the average of previous years. With the Bank saying further support will be needed, the Treasury is working on a successor to the loan schemes. Mr Chu warns that if officials make the new scheme considerably more rigorous, many firms could find themselves facing insolvency.
Pandemic hits self-employed numbers and earnings
The Telegraph’s Jon Yeomans looks at the impact the coronavirus crisis has had on Britain’s self-employed workers, noting that while the number of freelancers peaked at 5m in March, the pandemic has seen the total fall 9% to 4.56m in October. Figures from IPSE, the professional body for self-employed workers, show earnings for self-employed workers fell 25% in Q2, with the nationwide lock-down hitting incomes. While HMRC analysis says 2m freelancers had utilised Government support to the tune of £5.1bn by August 31, campaign group Excluded UK calculates that 1.6m self-employed people have missed out as they did not meet the eligibility criteria.
Chancellor: Borrowing not sustainable
With Government borrowing hitting more than £22bn in October, Chancellor Rishi Sunak says current levels are unsustainable. Office for National Statistics data shows that between the start of the financial year in April and October, the state borrowed £215bn, with this driven by the coronavirus crisis and the cost of the Government’s response. Mr Sunak has told the Spectator: “It is clearly not sustainable to borrow at these levels. I don’t think morally, economically or politically it would be right.”
Chancellor urged to extend tax return deadline
The Chancellor has been urged to extend the self-assessment tax return deadline beyond January 31, with concern that people will need more time to analyse their finances in greater detail due to the impact of the coronavirus outbreak. Moore has asked the Chancellor and HMRC to give taxpayers at least an extra month to deal with their tax return. The firm’s Tim Woodgates said pushing the deadline back is “essential to avoid causing more anxiety and stress” to those who are shielding, adding that a “blanket extension is the best option”. Noting that late-payment can result in fines, Mr Woodgates said HMRC is “snowed-under” and will not have enough time to deal with appeals against penalties “without falling behind elsewhere.” “Compared to overall tax take, the penalties for late filing are immaterial,” he added.
Migrants led jobs boom
Analysis shows that migrants have driven a jobs boom in economic hotspots in the last 20 years, with analysis by the Resolution Foundation think-tank showing that migrant workers accounted for 67% of net employment growth in the South East, 74% in the West Midlands and 107% in Outer London. Policy analyst Kathleen Henehan said: “Migrant workers played a big role in growth of the UK labour force over the last 25 years.” She highlighted that the UK has been attracting fewer migrant workers since the Brexit referendum, adding that the new immigration regime “will reinforce this major change for the UK labour market.”
Ministers urged to ease in new border rules
Blick Rothenberg has urged the Government to introduce an implementation period for post-Brexit border rules, arguing that businesses still know very little about what the new procedures will be as a deal is yet to be agreed with the EU. The firm’s Alex Altmann said: “With the end of the customs union being two weeks away the Government need to show flexibility now”.
House prices climb 5.4%
Data from the Office for National Statistics shows that property prices rose by 5.4% year-on-year in October, up from a 4.3% increase recorded in September. The increase, which was driven by a surge in buyers looking to complete deals before the stamp duty holiday comes to an end on March 31, pushed prices to a record average of £245,000. Scotland led the way on price rises, with the average climbing 6% to £163,000. Prices in England, Wales and Northern Ireland grew 5.4%, 5.8% and 2.4% respectively. EY Item Club believes house prices could fall by 5% over the first half of 2021, “before activity gradually improves” over the second half of the year. It said this will “allow prices to stabilise and then start to firm” as the economy “establishes a firmer footing”, noting that very low borrowing costs should help, with the Bank of England unlikely to lift interest rates from 0.10% during 2021. PwC economist Jamie Durham warned that there is a risk activity “could drop off sharply” once the stamp duty holiday comes to an end.
Covid-19 general news
There were sharp spike with 25,161 new cases (total 1.91M) in the UK yesterday with 612 more deaths (total 65,520).
Globally 734,370 new cases brought the total to 74.1 million with 1,650,313 deaths.
Following criticism from leading medical journals yesterday, the government is sticking to its plans to temporarily ease restrictions over the festive period, though Prime Minister Boris Johnson urged “extreme caution” as families meet.
The U.K. expects its regulator to to announce whether it will the AstraZeneca & University of Oxford vaccine within weeks, potentially delivering a major boost to the economy.
Germany reported over 45,000 cases on Thursday morning, its biggest-ever jump. They have started a new partial lock-down to slow the Covid-19 virus surge. Non-essential shops and schools have been closed.
Denmark is heading into a lockdown after registering a record number of cases
The US recorded a daily record of 3,835 deaths.
The French president Macron has been diagnosed with Covid.
Brazil hits 7 million cases
Markets.
Yesterday the FTSE 100 closed up 0.86% and the 250 climbed 1.07% helped by strong international sentiment and Brexit optimism. This positivity stemmed from an EU statement that fishing rights were now the only remaining sticking points. Sterling is at 1.112 Euros and 1.361 US Dollars. Brent Crude is at $51.2 and Gold is at $1877.
Overnight, the DOW dropped -0.15%, the S&P 500 dropped -0.18% and the NASDAQ rose 0.50% as markets contemplated the virus, potential stimulus and the weakening dollar.
Asian Markets were broadly positive, with China ending higher for the fourth straight session, powered by healthcare, consumer staples and financials sectors,
BMW has warned that a hard Brexit will pose a risk to its earnings momentum and would cost hundreds of millions of euros in extra costs.
US retail sales data was disappointing, declining 1.1% worse than consensus forecasts of -0.3%. This was partly blamed on escalating virus concerns.
Bitcoin jumped above $20k for the first time since the cryptocurrency was invented.
Eurozone PMI business activity stabilised in December, the PMI data rose to 49.8 from 45.3 in November reaching a two month high. The data suggests the Eurozone has stabilised following lock-down measures.
Bank of England
The Bank of England’s rate-setting monetary-policy committee meets today. While rate policy is unlikely to change, they will be watched for any language regarding QE or negative interest rates.
Heathrow
The UK Supreme Court gave Heathrow Airport the go ahead to seek planning permission for a third runway, overturning a previous court ruling saying the then-government had been wrong, on climate grounds, to let the project proceed. Heathrow Airport has said a third runway cannot be completed until 2030 at the earliest even assuming the work starts soon. Boris Johnson, the local MP for Uxbridge, north of the airport, opposes the runway.
US Stimulus
The US congress said they were close to agreement on new stimulus worth around $900bn to reduce the economic pain caused by the pandemic, extending unemployment benefits and other measures.
The US Federal Reserve has announced plans to keep buying government debt in a bid to boost the faltering US economy. Since June the Fed has been buying $80bn in Treasury bonds and $40bn in mortgage bonds per month and today pledged to buy assets at least at that pace for the “coming months”.
Google
Ten US states, including Texas, filed a lawsuit against Google, alleging antitrust breaches. They claim the firm abused its “monopolistic” position in digital advertising, including by striking a deal with Facebook to rig auctions for internet ad space. In October the US’s Department of Justice separately launched an investigation into Google’s dominance in search and potential un-competitive actions.
US trade
The current US administration is in talks with the UK to try to seal a quick mini-deal to reduce trade tariffs before they hand over to Biden.
Donald Trump’s trade chief, US Trade Representative Robert Lighthizer told the BBC he was hopeful for a deal that could see punitive tariffs on Scottish whisky lowered. The UK recently said it would drop tariffs against the US over subsidies for aerospace firms in a bid to smooth the way for a post-Brexit trade deal with Washington.
Sunak plays down wealth tax talk
Chancellor Rishi Sunak has suggested that a one-off wealth tax may not be his preferred option as the UK looks to rebalance the books in the wake of the coronavirus crisis. With the Wealth Tax Commission having proposed a 1% tax on those with personal wealth of more than £500,000 – which would be spread over five years, Mr Sunak has addressed the matter in an interview with the Spectator. Responding to the suggestion that a one-time wealth tax did not sound like a Conservative policy, the Chancellor said: “I think that’s right, in the sense that we’re a party that believes in aspiration. Actually, we should be celebrating aspiration.” Mr Sunak did note, however, that he is yet to read the Wealth Tax Commission report. While the commission says such a levy would raise £260bn, the Telegraph highlights that critics have warned it would punish asset-rich, cash poor families a nd could force some people to sell their homes.
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 extra 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.