Bank of England latest – business news 5 February 2021.
James Salmon, Operations Director.
The latest from the Bank of England, Labour calls for a furlough extension, London leavers, construction contracting, retail footfall, 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.
Bank of England
The Bank of England gave a positive forecast for the UK economic outlook and also signaled negative interest rates were unlikely.
The Bank of England (BoE) expects the UK’s coronavirus vaccination program to drive a rapid rebound of the economy later this year, with Bank economists predicting a 4.2% dip in Q1 before an upturn in economic activity.
Governor Andrew Bailey said the Bank thinks the inoculation drive will “support a sustained recovery throughout the rest of the year”.
The BoE also said it expects GDP to recover to pre-pandemic levels by the first quarter of 2022. It lowered its growth forecast for 2021 as a whole to 5% from November’s 7.25%, but raised its forecast for 2022 to 7.25% from 6.25%.
Despite optimism that a recovery is on the horizon, the Bank said it could introduce negative interest rates if the recovery falters, with Mr Bailey saying that while the Monetary Policy Committee (MPC) could utilise the measure in the event of a downturn, negative rates are not imminent.
MPC members voted unanimously to keep the official interest rate at a record low of 0.1%, with the Bank also opting to leave its quantitative easing bond-buying programme unchanged at £895bn. The bank said that negative interests will eventually be a tool available to them but it would takes 6 months for lenders to be ready for such a move. Also if it were used, it could be in a tiered system. All in all it looks like the bank will use QE rather than negative rates as a marginal tool.
Howard Archer of the EY Item Club said the Bank kept rates on hold as it “chose to look to the brighter longer-term prospects for the economy which will stem from the progressive rollout of the COVID-19 vaccines”.
Analysts feel the likelihood of negative interests have receded causing banking shares and financials to rise.
Labour calls for furlough extension and overhaul
Labour is calling for an indefinite extension and radical reform of the Government’s furlough scheme, saying that action is needed to avert an unemployment crisis. Shadow Chancellor Anneliese Dodds will today urge Chancellor Rishi Sunak to extend the furlough scheme, which is due to stop up at the end of April, until coronavirus-related restrictions are lifted. She will also call for reform, pointing to initiatives in Germany, France and the Netherlands where furlough schemes include incentives and conditions to encourage job retention and training so as to prevent abuse. Business groups including the British Chambers of Commerce have called for the furlough scheme to be extended until the summer, while the TUC has said it should remain in place through 2021.
Remote working could cost economy £95bn a year
Research commissioned by commercial landlord Landsec suggests remote working could cost the UK economy up to £95bn a year. The report found that face-to-face working boosts productivity and innovation, as well as driving investment in residential and commercial property, business events, meetings and travel. It calculates that the direct economic contribution of in-person working typically stands at about £95bn a year. Of course a commercial landlord would have a measure of self interest in encouraging businesses to maintain their previous levels of office space.
London leavers on the increase
The Times’ Melissa York looks at whether London’s population could be set to fall for the first time since 1988 as people opt to relocate, with PwC’s latest economic outlook paper suggesting 300,000 residents could move out of the city. An August survey by the London Assembly saw 4.5% of Londoners, or 416,000 people, say they intend to move out of the city within the next 12 months. Data from Hamptons International shows the number of homeowners buying outside of London hit a four-year high in December.
Construction contractiong
Construction PMIs dropped unexpectedly yesterday below 50 which indicates a contraction. Estimates were pointing at 52.8 but the actual figure came in at 49.2, having previously been 54.6.
Retail footfall
UK Retail Destinations saw their largest footfall plunge in over six months in January, data on Friday showed, after England third national lock-down emptied high streets and shopping centres again. UK retail footfall dropped 77% annually in January, a steeper fall than the 46% contraction in December, a month when various regions, including London, were slapped with tier 4 restrictions.
Covid-19 general news
There were 20,634 new cases (total 3.89m) in the UK yesterday with 915 more deaths (110k total).
Globally 465,405 new cases brought the total to 104.9 million with 2,285,355 deaths. Global vaccine doses passed 119 million.
The government has said that travelers from covid hot spots – those on the UK’s travel ban list) will have to quarantine from the 15th February for 10 days in government approved accommodation. “In the face of new variants, it is important that the government continues to take the necessary steps to protect people and save lives,” the government said in the statement. “With increased police presence at airports and more physical checks at addresses to make sure people are self-isolating, we are taking decisive action.” The 33 countries on the list are mostly in South America and Africa.
The UK is to start testing whether the use of a combination of the AstraZeneca and Pfizer vaccine as two doses will impact the efficacy of vaccinations. If it maintains the efficacy or even improves it, it will allow far greater flexibility in the roll-out.
Men are approximately 1.7 times more likely than women to die from covid-19, according to a recent paper by researchers at Yale University. Men over 30 are at significantly greater risk.
Johnson & Johnson asked US regulators on Thursday for emergency authorization of its single-shot Covid vaccine.
Markets.
Yesterday the FTSE 100 closed at marginally down 0.06% at 6503.72 and the 250 closed up 0.27%. The Euro Stoxx 50 also climbed 0.9% and the 600 0.56%
Financial stocks were up on the reaction to the BOE statements on negative interest rates but the strong pound hurt most of the other blue chips whose income is overseas. Unilever especially fell after it missed quarterly targets.
A return of risk-on market sentiment, after some solid economic data, pushed the S&P 500 and NASDAQ to new record highs. Overnight, the S&P 500 rose 1.09% and the NASDAQ rose 1.23%.
Asian markets reacted positively this morning, up across the board.
Sterling jumped sharply yesterday after the Bank of England indicated that it didn’t want to send a signal to the market on adopting negative rates, Sterling is at 1.143 Euros and 1.369 US Dollars.
Brent Crude is near highs for a year at $59.60 after oil extended gains after the OPEC+ alliance of producers stuck to its reduced output policy and US crude stocks fell, with optimism over a new US pandemic relief bill adding further price support.
Gold is at $1808 after it slipped as the US dollar strengthened and the risk on sentiment returned.
Directors face fines over accounting failures in overhaul of audit rules
A proposed overhaul of the audit industry could see directors banned or hit with large fines for errors in their companies’ accounts. Plans to make directors personally liable for the accuracy of financial statements are set to be included in a Government consultation and follow independent reviews of audit and regulation, as well as a number of financial scandals. The consultation, which is set to focus on reform of corporate governance, audit firms and regulation, is expected to expand the definition of “public interest entities” whose audits are regulated by the Financial Reporting Council (FRC). It is also reported that the reforms will grant the Audit, Reporting and Governance Authority, which will replace the FRC, powers to enforce a formal split between the audit and consulting arms of big accountancy firms.
A Government spokesperson last night said: “Strengthening our corporate governance and audit regime will help to ensure that the UK remains a world leader in corporate transparency and advance its status as a place of the highest standards in audit”. They added that new Business Secretary Kwasi Kwarteng “has been clear that audit reform is a priority for the department.”
Stamp duty holiday sees tax-free sales jump 127%
HMRC data for England and Northern Ireland show that almost a quarter of a million homebuyers paid no property tax in Q4, while the stamp duty holiday saw a surge in sales. Figures show that home sales rose by 16% in the October-December quarter when compared to the same period in 2019. On a quarter-by-quarter basis, transactions were up 44% on Q3. Of the sales recorded in Q4, 218,300 were entirely tax-free – a 127% jump on Q4 2019’s tax free transactions. Year-on-year, residential stamp duty receipts fell 22% in Q4, with a 33% increase on Q3’s total. Richard Donnell of property website Zoopla said: “More people have saved on stamp duty, but more sales of high value property have reduced the hit on tax revenues.”
Barratt boss backs cladding tax on developers
David Thomas, chief executive of Barratt Developments, says he would support a tax on developers to help cover the cost of the cladding scandal and ensure that buildings meet changes to regulations since the Grenfell Tower fire. Saying that there is a “collective responsibility” to address the issue of buildings covered in flammable cladding, Mr Thomas said: “There’s been talk about how it can be funded and, from our perspective, we would support a prospective levy on the wider industry.”
Savers overcharged £125m in pension tax
Savers have overpaid a collective £125m in pension tax over the course of 2020 after withdrawing money under the pension freedom rules. Close to £26m was reclaimed from HMRC in the last three months of 2020. Over-55s have reclaimed £693m in overpaid pension tax since pension freedoms were introduced in April 2015.
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.