Business news 2 May 2025
Tariffs hit export orders. Concern over NI hike. Business leaders concerned over costs. Interest rates, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
Tariffs hit export orders
Britain’s manufacturing sector experienced a sharp decline in export orders last month, with demand falling at its fastest rate in five years due to trade uncertainties triggered by US President Donald Trump’s tariff policies. These tariffs, along with the threat of more, led to continued job cuts, reduced output, and a drop in new orders, pushing business confidence to its lowest since late 2022. S&P Global said its survey of manufacturers indicated “weak client confidence, trade uncertainty and generally quiet global markets that had all weighed on export demand.” S&P Global’s manufacturing PMI increased to 45.4 last month, from March’s 17-month low of 44.9, but remained below the 50 mark that separates growth from contraction.
Concern over NI hike
Liz Ritchie, head of tax at Forvis Mazars UK, says the recent rise in employer National Insurance contributions – from 13.8% to 15% – and the reduction of the earnings threshold from £9,100 to £5,000 are forcing businesses to reconsider their operational bases. She warns that “many businesses simply won’t be able to operate sustainably in London due to these changes.” The impact is already evident, with hiring freezes and potential job cuts in the professional services sector. To adapt, she suggests, firms may need to explore regional hubs and leverage Government support schemes, such as apprenticeship programmes, to mitigate costs and maintain competitiveness. Analysis shows that since the start of the tax year, the average NI bill per employee has surged to £6,375, an increase of £1,075.
Business leaders concerned over costs
UK business leaders are increasingly pessimistic over wage growth and are concerned over cost expectations, according to a survey by the Institute of Directors (IoD). Despite the IoD’s economic confidence index increasing by seven points compared to March and expectations around headcount posting the first positive reading in more than six months, executives remain concerned over a £25bn tax increase for employers and the rise in the National Living Wage. The survey shows that while some firms plan to increase investments, uncertainty surrounding US tariffs continues to be a significant concern. Anna Leach, chief economist at the IoD, said: “There’s a strong sense of frustration amongst business leaders that the Government has been quick to raise their costs, but slow to deliver policies which will support them to grow their businesses.” Ms Leach has urged ministers to expedite pro-growth policies to alleviate pressures on businesses.
Economists predict 1% drop in interest rates
Interest rates in the UK are expected to fall rapidly, marking the steepest six-month drop since the 2008 financial crisis. The Bank of England is likely to begin cutting rates from 4.5% to 4.25% next week, with a potential total reduction of up to one percentage point over the next six months. This move would lower borrowing costs to below 3% for the first time since 2022, easing pressure on mortgage holders. Barclays said that they expected rates to fall to 3.5% by September, while Morgan Stanley predicted policymakers would eventually reduce rates to as low as 2.75% during the first half of 2026. Major banks have already started reducing fixed mortgage rates, with significant savings for homeowners.
Manager engagement slips as challenges evolve
Polling company Gallup’s annual State of the Global Workplace report shows that manager engagement has fallen from 30% to 27%. This downturn is particularly stark in the UK, where only 10% of managers feel engaged. Gallup defines engaged workers and bosses as “highly involved in and enthusiastic about their work and workplace.” Jim Harter, Gallup’s chief scientist, noted that many managers are overwhelmed by evolving challenges, including changing customer demands and the rise of AI. Mr Harter says the issues are “all very solvable,” emphasising the need for clarity in roles, effective communication, and accountability to improve engagement. The report highlights that only 44% of managers globally have received any leadership training.
Markets
Yesterday, the FTSE 100 closed flat at 8496.80 while the Euro Stoxx 50 was closed for a holiday. Overnight in the US the S&P 500 rose 0.63% to 5604.14 and the NASDAQ rose 1.52% to 17710.74.
Investor focus stayed on economic data, with a flurry of new reports emerging from both the UK and the US. UK manufacturing data fell short of expectations, while US figures came in broadly in line.
This morning on currencies, the pound is currently worth $1.3305 and €1.1735. On Commodities, Oil (Brent) is at $61.80 & Gold is at $3262. On the stock markets, the FTSE 100 is currently up 0.76% at 8561.85 and the Eurostoxx 50 is up 1.47% at 5326.
Bitcoin is approaching $100k.
China says it is evaluating the grounds for trade talks with the US.
Apple is down after warning that tariffs will increase its costs by $900m this quarter, despite having moved much production to India and Vietnam. Likewise Amazon admitted it is facing a tougher business climate with 70% of its goods coming from China.
Microsoft
Microsoft reported better-than-expected quarterly results, driven by its Azure cloud business, and issued surprisingly strong guidance. Microsoft called for revenue in the range of $73.15 billion to $74.25 billion. The middle of the range was higher than LSEG’s $72.26 billion consensus. The company sees 34% to 35% in Azure growth at constant currency, compared with StreetAccount’s 31.5% consensus.
Natwest
NatWest reported Q1 pre-tax profit of £1.81bn v £1.49bn and expects 2025 return on tangible equity at the upper end of 15%-16%. Separately the UK government disclosed its stake in NatWest has declined to 1.98%.
Investors stash cash in ISAs
Savers invested £4.2bn into cash ISAs in March 2025, marking a 31% increase from the previous year. This surge was driven by concerns over potential cuts to the £20,000 tax-free allowance, with Laura Suter, director of personal finance at AJ Bell, noting: “Rumours that the Government was poised to slash cash ISA allowances… sparked a rush to the tax-free accounts.” Despite no changes being announced in the Spring Statement, the influx of funds reflects a broader trend of investors seeking safe havens amid economic uncertainty. With competitive rates currently reaching up to 5.71%, cash ISAs remain an attractive option for savers looking to protect their funds from taxation.
Mortgage borrowing up £9.7bn ahead of stamp duty changes
Bank of England data shows that net borrowing for mortgages was up by £9.7bn to more than £13bn in March, with buyers looking to get deals over the line before higher stamp duty taxes came into effect. The Bank says mortgage approvals have fallen since stamp duty rates increased and EY Item Club’s Matt Swannell notes that approvals also fell after hike in 2021, adding that the recent “cooling” in mortgage activity “likely has further to run in the near-term.”
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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!