Business news 1 August 2023
James Salmon, Operations Director.
Consumer borrowing hits five-year high. Retail inflation, house prices, recession odds, the FTSE 100 and more business news that we thought would interest our members.
Consumer borrowing hits five-year high
Bank of England data shows that the amount of money borrowed by consumers rose to a five-year high in June, with £1.7bn borrowed last month following a £500m decrease in lending in May. The increase came as people took out £1bn on personal and car loans, with this up £500m on the month before. Borrowing on credit cards remained stable at £600m.
The report also revealed that households have £215bn of consumer debt, with just over £66bn on credit cards and almost £149bn of other debts, including overdrafts and hire purchase agreements. Meanwhile, rising interest rates have encouraged consumers to return to saving after a record amount was withdrawn in May. An additional £3.4bn was deposited with banks and building societies in June, following net withdrawals of £3.1bn the month before.
If you are concerned about outstanding payments due from your customers, talk to CPA about our Overdue Account Recovery service. We resolve on average 84% of accounts referred to us, while maintaining your goodwill. We encourage your late payers to pay you direct, in an ethical, efficient, economic and effective manner.
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.
Retail inflation
The British Retail Consortium reported a fall in retail prices for the first time in two years. Retail prices were 0.1% lower in July than in June. Annual inflation dropped to 7.6% in July from 8.4% in June. The figures offer some relief for households struggling with the cost of living and interest rate rises.
House Prices
UK House Prices fell by 3.8% in annual terms in July, the largest drop since July 2009, mortgage lender Nationwide said on Tuesday. The reading was in line with the consensus from a poll of economists. House prices fell 0.2% month-on-month, Nationwide said.
Recession odds
Economists are pricing a 60% chance of a recession in the USA in the next twelve months. For the Euro zone, it’s 50% and for us in the UK the odds are somewhere in between.
FTSE 100 sees best performance since April
London’s FTSE 100 has recorded its best month since April, ending July 2.2% higher than at the start of the month. The positive performance was driven by hopes that UK inflation has turned a corner, boosting investor confidence. The index also started the week on a positive note, as markets anticipate another interest rate hike by the Bank of England.
Government backs North Sea
The Prime Minister announced a further shift in energy policy, announcing they will grant hundreds of new licenses for oil and gas production in the North Sea, as the Tories shift their approach to energy and the environment. The move is about “strengthening our energy security,” Rishi Sunak said. “We’re still heavily impacted by what happens when energy supplies are weaponized by dictators.” Although few beleive the North Sea can have a meaning impact on energy Security and they encourage a move to renewables instead.
“Of course I am committed to net zero,” Sunak said. “But I’m also committed to our energy security and we will get to net zero in a proportionate and pragmatic way that doesn’t unnecessarily burden families with costs or hassle that they don’t really need in their lives.”
Farage & Coutts
Nigel Farage says Coutts have offered to keep his bank account open and that is seeking legal costs from the unit of NatWest Group Plc. He said that a Coutts executive had written to him. Farage says he’s keen to meet the bank. “I’ve sent back a solicitor’s letter,” he said by phone. “I do want to sit down and have a meeting to find out at the meeting how many other people at Coutts and NatWest this has happened to.”
HSBC
HSBC launched a new $2bn share buyback programme after comfortably beating expectations in the second quarter. In the three months to June, pretax profit hit $8.8bn, over $4bn higher than last year and surpassing the $8bn predicted by analysts. The strong performance reflected the impact of rising interest rates around the world. HSBC lifted its full year net interest income guidance to over $35bn and upgraded its forecast for its return on tangible equity, a key measure of profitability.
BP
BP on Tuesday reported a sharp fall in second-quarter profits on the back of weaker fossil fuel prices, echoing a trend observed across the energy industry. The British energy major posted second-quarter underlying replacement cost profit, used as a proxy for net profit, of $2.6 billion. Analysts had expected BP to report second-quarter profit of $3.5 billion
Greggs
Greggs announced growing sales and pre-tax profit during the first half of the year as hopes rest on easing inflation. Sales in the six months to July jumped 16% to £844mln on a like-for-like basis, “reflecting the exceptional value that Greggs offers to customers,” the company said in a statement.
Energy review will not reverse windfall tax
Prime Minister Rishi Sunak has confirmed that there will be a review of the oil and gas sector’s tax regime. Ministers say the focus is on the long-term investment climate of the North Sea, noting that changes to the Energy Profits Levy – a windfall tax on the sector – will not be considered. The levy is currently set at 35%, with this on top of the special 40% corporation tax rate oil and gas producers pay.
6 in 10 mid-sized firms are locked in tax disputes
More than half of British mid-sized firms are locked in disputes with the taxman over potential unpaid tax, a sign of the troubles companies encounter when trying to navigate the UK’s complex web of levies. Some 61% of 500 firms surveyed by BDO are embroiled in a tax dispute with HMRC. There were also 39,500 open tax tribunal appeals at the end of March, an 8% jump from the previous year.
Critics suggest that simplifying the regime could prevent companies from not paying tax they are unaware they are exposed to, which would reduce strain on HMRC staff workloads. BDO partner Talia Greenbaum said: “The UK’s tax system can be very complex and difficult to navigate, so it’s no surprise that this can result in business tax disputes. Simplifying and modernising the system would certainly help to reduce these difficulties.” An HMRC spokesperson said: “We recognise the importance which mid-sized businesses bring to the UK and have focused our efforts on developing customer insight to better understand the needs of this diverse group and the challenges they face.”
Eurozone economy grows and inflation dips
Europe´s economy has grown modestly after months of stagnation, with 0.3% growth across the 20 countries that use the euro currency in Q2 when compared to Q1. The overall figure was boosted by 0.5% growth in France and 0.4% in Spain, while Ireland’s growth of 3.3% was the largest in the bloc. Meanwhile, inflation in the eurozone fell to 5.3% in July, from 5.5% in June.
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Why should you become a CPA member!
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 some time to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!
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.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.