Business news 1 September 2023
James Salmon, Operations Director.
MPs want a crackdown on late payments. Help SMEs with new tech adoption. Inflation, Ftse100 reshuffle, car production, tolls, Wilko & more business news that we thought would interest our members.
MPs want a crackdown on late payments
A new YouGov survey shows most MPs want tougher measures to crack down on late payments. The survey commissioned by the UK’s largest accountancy bodies – the Association of Accounting Technicians and the Association of Chartered Accountants – recently found that two-thirds of MPs think the Prompt Payment Code should be made compulsory for organisations with over 250 employees. The code is voluntary and Federation of Small Businesses research found that in every quarter in 2022, most small businesses experienced late payments.
FSB: Help SMEs with new tech adoption
The Federation of Small Businesses (FSB) has urged the Government to support small enterprises in adopting new technologies, as their research shows that these businesses have less access to government funding compared to corporate giants. The FSB’s report, titled “The Tech Tonic,” reveals that 70% of tech-savvy small ventures have integrated new tech innovations, resulting in a 15% average revenue rise. However, affordability remains a major barrier to innovation, with the average cost of introducing new technology for small firms being £27,000 over three years. The FSB urges the Government to allocate over half of direct R&D funding to SMEs and establish a tax-relief scheme for businesses actively trying to enhance their products and processes. The British Chambers of Commerce also echoes these calls, urging politicians to spur economic growth by addressing high interest rates, inflationary pressures, and other key issues.
BoE must ‘see through job’ of fighting inflation
Huw Pill, chief economist of the Bank of England, has indicated that he will vote for a 15th successive interest rate rise, despite the risk that it could harm the economy. Speaking at a research conference in South Africa, Pill emphasised the need to “see the job through” in the battle against inflation and ensure a lasting and sustainable return to the 2% target. However, he also hinted that rates may be left at the current level of 5.5% due to the danger of needlessly damaging growth and jobs. The Bank of England has raised rates at every meeting since December 2021, with inflation still running at 6.8%. Pill acknowledged the risk of pushing rates too high, but stressed the importance of not being complacent. The key question for policymakers is how companies and households will respond to increased inflation pressures.
FTSE 100
The FTSE 100’s quarter reshuffle saw Marks and Spencer promoted to the top index with Insurer Hiscox and builder Persimmon relegated to the second tier 250 index.
Car Manufacture
UK Car Production rose year-on-year for the sixth month in a row in July, as the global chip shortage eased and the numbers of electric cars and hybrids rose. Production from UK factories rose by 31.6% in July compared to last year, according to new data from the Society of Motor Manufacturers and Traders, although output remains 29% below 2019.
Eurozone Inflation
Eurozone Inflation came in higher than analysts had expected for the month of August, although it was unchanged from the previous month, complicating the role of the region’s central bank. Headline inflation was at 5.3% for August, according to preliminary data by the European statistics office. That’s above the 5.1% expected but unchanged from July.
US Consumers
US Consumer Spending rose by the most in six months in July as Americans bought more goods and services, but slowing monthly inflation rates cemented expectations that the Federal Reserve would keep interest rates unchanged next month. The report from the Commerce Department suggested the economy gathered momentum early in the third quarter. Consumer spending is being supported by a tight labor market, with other data showing first-time applications for unemployment benefits unexpectedly falling last week.
AOG Technics
A London based company called AOG Technics has been identified by European aviation regulators as the supplier of bogus parts for repairs of jet engines used in many older-generation Airbus SE A320 and Boeing Co. 737 planes.It has yet to be determined how widespread the fake parts are and how many fake parts have been installed or how many or which aircraft might be affected.
UBS
UBS continues to bed in Credit Suisse after its enforced marriage earlier this year. The Swiss bank said 3,000 jobs will go in Switzerland as part of a US$10 billion cost-cutting drive relating to the merger.
Home sales down 16% in July compared with last year
Figures from HMRC show the number of home sales taking place in July was 16% lower than in the same month a year earlier. Across the UK, 86,510 residential property sales were recorded, up by 1% compared with June
Meanwhile UK House Prices saw further weakness in August, according to the latest Nationwide house price index on Friday. House prices fell 0.8% month-on-month in August, picking up pace from a 0.3% fall in July. On an annual basis, prices are now 5.3% below their August 2022 peak, accelerating from a 3.8% fall in July. Nationwide noted this was the weakest rate since July 2009. The average house price in August was £259,153 on a non-seasonally adjusted basis, down from £260,828 the previous month.
Toll roads and tax hikes needed to offset fuel duty losses
More toll roads should be brought in to plug a potential blackhole in the Treasury’s coffers due to electric cars, according to a consultancy advising the Government. Ministers and think tanks are pushing for radical changes to how drivers are taxed to offset the estimated £35bn loss in fuel duty revenue over the next few decades. Arup, a global infrastructure consultancy, has suggested income tax hikes and road taxes could cover the lost fuel duty revenue.
HMV owner edges closer to rescue deal for Wilko
The owner of HMV is finalising a deal to rescue the majority of Wilko’s operations, with the retailer’s administrators, PwC, reportedly consulting on the terms of an agreement with Doug Putman on Thursday. According to sources, Mr Putman intended to acquire more than 300 of its 400 stores, meaning that between 8,000 and 9,000 jobs of a total workforce of 12,500 could be saved. However, PwC was forced to begin redundancy proceedings after a separate bid to rescue the whole group fell through. Some 269 support centre workers in Worksop will have their last day with the business on Monday.
Treasury to encourage more consumers to invest in stock market
As part of a drive by the Government to get more savers investing in the stock market, ministers are considering nudging savers into investment Isas rather than cash accounts. Treasury insiders said ministers are keen on simplifying the Isa regime amid concerns that not enough savers are investing their savings in stocks and shares – only around 10% of Isa savers hold money in stocks and shares. The Financial Conduct Authority is also keen to see savers invest as it will help bring down inflation and bring better returns that rates offered by most high street banks.
New market launched to facilitate investment in unlisted UK growth companies
City traders have launched a new market that aims to make it easier for big investors to buy shares in unlisted UK growth companies. The market, created by JP Jenkins in collaboration with Winterflood Securities, will match buyers and sellers in UK growth businesses. The Evening Standard notes that demand for unlisted assets continues to soar, with EY putting the value of private capital markets worldwide at more than $22trn.
Does the Government really want to stope economic crime?
Margaret Hodge and Theodore Agnew say in a piece for the Times that Britain’s failure to tackle the problem of illicit wealth is harming the country’s reputation. Dame Hodge, Labour MP for Barking, and Lord Agnew, a Tory peer, point out that the Government is set on rejecting amendments to its Economic Crime Bill that would ensure lawyers, bankers and accountants can no longer turn a blind eye to criminal behaviour. “Surely there is no honest business, small or large, that doesn’t want procedures in place to prevent money laundering and fraud.” Additionally, secretive trusts are not mandated to publish the details of their beneficiaries, with around 7,000 trusts still able to obscure the ownership of more than 20,000 properties. “If the Government truly wants to go after Russian oligarchs, kleptocrats and criminals, then it must put tribal politics aside and reconsider the amendments put forward.”
Agricultural Property Relief to be scrapped from April 2024
Investors with money in vineyards and woodland on the Continent are set to lose valuable inheritance tax reliefs from April 2024. Inheritance tax exemptions for owners of European farmland and forestry will be abolished, restricting the relief to the British mainland. The change, announced in the March 2023 Budget, is expected to impact a small number of British taxpayers but could have serious consequences for farmers, expats, and investors with land overseas.
Latest Insolvencies
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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!
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.