Business news 1 December 2023
James Salmon, Operations Director.
Small business owners hit by cost of living crisis. Finance chiefs expect inflation to fall. Strikes, Metro Bank, Alistair Darling, Tax cuts, Wilko & more business news that we thought would interest our members.
Small business owners hit by cost of living crisis
Three out of four small business owners in the UK say that the cost of living crisis has impacted their Christmas income, according to a survey conducted for Small Business Saturday. The poll of more than 250 independent business owners found that one in three of the country’s 5.5m small firms is suffering from inflation from inflation and rising prices. Michelle Ovens, director of Small Business Saturday, has urged consumers to support small businesses, saying: “If we all make a conscious effort, we can collectively turn this situation around.”
Finance chiefs expect inflation to fall
Businesses expect prices to fall over the coming year but have warned that wage growth will remain high. The Bank of England’s Monthly Decision Maker Panel, a poll of finance chiefs, shows that firms expect output prices to fall over the next year, forecasting that inflation in the year-ahead will be at 4.4%. In the three months to October, the forecast came in at 4.5%. However, wage growth in the coming year is expected to remain at 5.1%, with this unchanged from last month’s survey.
Strikes
Rail strikes had looked to have been averted as RMT members ended their long running dispute, having voted to accept an offer from rail companies. However, members of ASLEF will be holding rolling strikes between 1st and 9th December, having branded the latest offer from The Rail Delivery group “a bad faith deal”
More than 500 Unite members and GMB members are to take strike action in series of 24 hour stoppages at various Chivas Brothers whisky production facilities across Scotland.
COP28
Political leaders at COP28 finalised a “loss and damage” fund, which will see rich countries compensate poor ones for the damage caused by climate-related disasters. The hosts, UAE, pledged $100m and Britain, Germany and Japan have also committed to support the fund.
Metro Bank
Metro Bank has said it will review whether to stay open seven days a week as it also revealed plans to cut 20% of its workers. The lender said the measures were part of a strategy to save around £50m a year.
Alistair Darling
The former Chancellor, Alistair Darling, who steered the economy through the financial crisis of 2008, died, aged 70.
Tax cuts will drive growth
Chancellor Jeremy Hunt has refuted suggestions that the tax cuts announced in the Autumn Statement will mean sharp spending cuts to public services down the line. Mr Hunt told MPs on the Treasury Committee that the cuts are “designed to help growth,” which in turn will help fund public services. “The way that we fund our public services over the medium is by having a healthy growing economy,” he said. This comes after MPs suggested Hunt’s plans were based on a “fiscal fiction.” The Chancellor hit back, saying: “It would be fiscal fiction if I chose to cut taxes in areas that didn’t impact growth. But I didn’t.” Mr Hunt went on to highlight Office for Budget Responsibility estimates which say measures announced in both the Spring Budget and the Autumn Statement will help to increase GDP by 0.5%.
Business bosses back Hunt’s reforms
A number of business leaders have backed Jeremy Hunt’s Autumn Statement. Martin Sorrell, executive chairman of agency S4 Capital, welcomed the Chancellor’s “targeted” reforms, such as the permanent tax break on capital investment and the National Insurance cut, saying: “It shows he is taking it seriously.” Airbus UK chairman John Harrison welcomed measures designed to boost business investment, saying: “It gives businesses like ours the confidence to innovate and invest.” Meanwhile, Fhaheen Khan, an economist at manufacturing sector body Make UK, said that Mr Hunt “understands industry’s needs and is committed to delivering a strategy to boost investment.”
Property deals dip 17% in October
Official data shows that the number of new homes bought in October was down 17% on a year earlier and 2% on September’s total. The figures from HMRC show that 90,920 properties were sold. On a seasonally adjusted basis, there were 82,910 transactions in October, with this 3% lower than September’s total and 21% lower than in October 2022. Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Transaction numbers have slipped again in the face of higher interest rates and the cost of living, as borrowers reassess what they can afford to pay.” Jason Tebb, chief executive of property portal OnTheMarket.com, said: “Despite challenging market conditions there hasn’t been a drastic fall-off in transactions, which are regarded as a more useful indicator of the health of the housing market than property prices.”
Meanwhile Nationwide reported house prices rose 0.2% month on month in November in the latest sign the housing market may be stabilising, latest data showed. The Nationwide House Price Index showed that on annual basis prices fell 2.0%, an improvement from October’s 3.3% annual decline.
Regulators urged to claw back Wilko dividends
The chair of the Commons Business and Trade Committee says regulators should look to reclaim dividends paid to Wilko’s founding family before the retailer’s collapse in August. Liam Byrne has called on regulators to “explore every option to claw back those dividends so that Wilko pensioners are not short-changed.” In response, Business Minister Kevin Hollinrake said the Insolvency Service is looking at the matter and the director’s conduct report from administrator PwC. He noted that it “been clear in that report so far they have no evidence of director misconduct, but there’s further work ongoing.” This comes after the cross-party committee heard from former Wilko chair Lisa Wilkinson. Mr Byrne said Ms Wilkinson “was not able to answer why 70% of the profits in the last four years were paid out in dividends to family trusts, while the deficit in the pension fund mounted, to now £50m.”
International Inflation News
US Inflation as measured by personal spending increased in line with expectations in October, according to data released earlier on Thursday. The personal consumption expenditures price index, excluding food and energy prices, rose 0.2% for the month and 3.5% on a year-over-year basis, the Commerce Department reported. Both numbers aligned with the consensus.
Eurozone Inflation cooled to 2.4% in November from 2.9% in October, flash figures showed Thursday. Economists polled by Reuters expected a reading of 2.7%. Core inflation — a measure closely watched by the European Central Bank that excludes the volatile effects of energy, food, alcohol and tobacco — also came in lower than expected, dropping to 3.6% from 4.2% in October.
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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.
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Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
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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.
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!
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Check our compensation calculator to see how much your business could be owed!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.