Business news 1 April 2022
James Salmon, Operations Director.
Ministers urged to cap energy prices for SMEs. ONS: Economy grew by 1.3% in Q4. Expert warns of the economic impact of long Covid . Statutory Demands and Winding up Petitions. And more business news.
Ministers urged to cap energy prices for SMEs
A study by energy analysts Cornwall Insight shows that SMEs have seen average gas bills climb more than 250% between the first three months of 2021 and Q1 2022. Analysts looked at delivered gas prices businesses pay on a 1-year acquisition fixed tariff, calculating how much they may pay in future if energy prices continue to rise. They found that while the typical increase will be 250%, some firms could see bills jump 310%.
Cornwall Insight highlights that the unstable energy market means some suppliers are withdrawing tariff propositions at short notice. Craig Lowrey, senior consultant at Cornwall Insight, said: “Volatile wholesale pricing means finding a new contract as a business customer is even more difficult.” He suggested that there are “many levers to reduce gas prices for small and medium-sized businesses that need to be explored,” adding: “If the Government does not want to see more businesses fail, higher product prices for consumers and resultant economic impacts, it will need to start giving them some attention.”
Energy Prices
UK energy prices rose by 54% from midnight this morning as many supplier websites crashed as consumers rushed to provide last minute readings. The industry has blamed the online problems on advice from Martin Lewis, the consumer savings champion.
ONS: Economy grew by 1.3% in Q4
The Office for National Statistics (ONS) has revised up its UK economic growth estimate for the October to December 2021 period, saying the economy grew at a rate of 1.3% in Q4, rather than the 1% previously estimated. This means GDP was now 0.1% below the pre-pandemic period of Q4 2019, compared with the ONS’ previous estimate of 0.4% below.
Revisions to GDP figures for the past two years show the economy increased by 7.4% in 2021, with this lower than an initial 7.5% estimate.
The ONS figures also show that people opted to dip into their savings in Q4, with the household savings ratio dropping to 6.8% – down from 7.5% in Q3 2021. The data also revealed that high inflation eroded real incomes 0.1% over the closing quarter of 2021.
Martin Beck, chief economic adviser to the EY Item Club, said while the economy saw a solid end to the year, the recovery in consumer spending was already starting to lose momentum. “The momentum behind the consumer recovery has faltered,” he said, adding that the “scope for households to offset the squeeze on real incomes by saving less is looking more limited.”
Barret Kupelian, senior economist at PwC, said the ONS data suggests UK households “are entering a period where they will face a very substantial hit to their living standards with a smaller savings buffer than initially anticipated.
Expert warns of the economic impact of long Covid
Dr Nathalie MacDermott, a specialist in paediatric infectious disease at King’s College London, has warned of the economic impact of officials failing to consider long Covid when lifting restrictions. Flagging concern that long Covid is not being given enough consideration when public health measures are adjusted, she warned: “Economically, that is going to be to our downfall in the coming years.” Dr MacDermott said that the condition will have a substantial impact on people’s ability to work, their earning potential, and costs to government and businesses, adding: “That’s going to be a significant hit to our economy, not just to people’s lives.” The Office for National Statistics estimates that 1.5m people in UK households are living with long Covid.
Statutory Demands and Winding up Petitions
The temporary threshold of a debt being £10k or greater in order to present a winding up petition, expired yesterday, as did the requirement for a creditor to first seek proposals for payment from a corporate debtor 21 days prior to presenting a winding up petition.
Employers struggling to retain graduates
Employers are struggling to retain graduates amid a highly competitive jobs market, according to the Institute of Student Employers (ISE). The analysis shows that firms are retaining just over seven in 10 graduates three years after they join, compared to around eight in 10 last year, with the current retention rate the lowest on record. The ISE said weak pay growth is incentivising young workers to leave their employers, with chief executive Stephen Isherwood adding: “Combined with high inflation and a reduction in spending power, dissatisfaction may create major retention challenges for student employers as workers move roles to seek a pay increase.”
Ukrainian Agricultural goods
Ukrainian President Zelenskiy said that Russia was deliberately damaging its agricultural sector which would push up global food prices. While NATO Secretary General Jens Stoltenburg said ‘Russia is not withdrawing or re-positioning’ but continuing pressure on Kiev. Markets turned negative as if it was brand new news that Russian governments statements are untrustworthy.
The UK savings ratio
The UK savings ratio fell to 6.8% during Q4 2021 compared to 7.5% in Q3 2021 as UK households drew down savings to pay bills. The Office for Budget responsibility expects the savings ratio to hit 3% by the end of 2022
Top Australian firms to inject £28.5bn into UK economy
A group of nine leading Australian firms have committed to inject £28.5bn into the UK economy across projects centred on renewable energy, infrastructure and urban regeneration. Prime Minister Boris Johnson said the investment, which includes both previously announced and newly committed capital, shows the businesses recognise “opportunities across the globe in our dynamic and forward-looking economy.” He added that the “fantastic” schemes will “turbocharge the Government’s efforts to create jobs and growth in every part of the country, and put the UK at the cutting edge of the green industrial revolution.”
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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.