Business news 2 August 2024

Sorry today’s blog is limited due to the writer being on annual leave on Friday

James Salmon, Operations Director.

Bank of England cuts rates – short version

The Bank of England delivered its first interest rate cut in more than four years, taking the key rate to 5%. Policymakers ultimately voted 5-4 in favor of the reduction, with Governor Andrew Bailey saying that the committee would move ahead cautiously. The Bank rate had been held at a 16-year high of 5.25% since August 2023. This marked the first cut to the benchmark rate since March 2020, although the Bank of England’s governor, Andrew Bailey, said the “risks of higher inflation remain”.

Interest rates cut for the first time in four years  – long version

The Bank of England has voted to cut interest rates for the first time since March 2020, with the Monetary Policy Committee (MPC) choosing to cut the base rate, which has stood at 5.25% since August last year, to 5%. The decision comes with inflation having held at the Bank’s target rate of 2% in May and June, having fallen from a peak of 11% in 2022. Five members of the MPC, including Bank governor Andrew Bailey, voted to reduce the Bank Rate by 25 basis points, while four, including chief economist Huw Pill, voted to hold the rate. Commenting on the decision, Mr Bailey said that while lower inflation had paved the way for lower interest rates, it was “not mission accomplished yet.” He added that policymakers need “to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much.” Suren Thiru, economics director at the ICAEW, warned that the Bank’s “policy loosening is unlikely to herald the start of a major interest rate cutting cycle,” although it does mark a “notable shift in direction.” Carsten Jung, senior economist at the Institute for Public Policy Research, welcomed the decision to cut interest rates but says the Bank “waited too long to do so,” arguing that rate setters have “been holding back the UK’s economic recovery by underappreciating the long-term effect of high interest rates.” Meanwhile, the Bank has also published an economic forecast which suggests inflation will rise to around 2.7% by the end of 2024. It is predicted to fall back to 2% by the start of 2026 before dropping to 1.5% in 2027.

Rate cut set to boost housing market

The Bank of England’s decision to cut the base rate is set to boost the housing market. Homeowners on tracker mortgage rates will see their annual payments reduced by over £340 on average, with UK Finance analysis showing that the average tracker mortgage borrower will see their monthly payments reduced by £28.44, while someone on a standard variable rate mortgage will see a £14.50 reduction. Richard Donnell, executive director of research at Zoopla, said: “The cut to the base rate will deliver a further confidence boost to the housing market rather than heralding the start of a big drop in mortgage rates,” while Matt Smith, a mortgage expert at Rightmove, said: “The highly-anticipated rate cut has finally arrived, and while those looking to take out a mortgage soon shouldn’t expect to see drastically lower mortgage rates, we would expect the downward trend we’ve started to see continue.” Suren Thiru, economics director at the ICAEW, commented: “While this rate cut marks a notable shift in direction, the financial reality facing households and firms won’t materially change, as this is just one step back from the previous period of 14 rate hikes.”

House prices up 2.1% year-on-year

Analysis from Nationwide shows that house prices are rising at their fastest rate since the end of 2022. Prices are up 2.1% on a year ago, having hit an average of £266,334. This is the largest year-on-year increase since December 2022. On a month-by-month basis, prices rose by 0.3% in June. Robert Gardner, Nationwide’s chief economist, said: “Housing market activity has been holding relatively steady in recent months, with the number of mortgages approved for house purchase at around 60,000 per month.” He added: “While it is still about 10% below the level prevailing before the pandemic struck, it is still a respectable pace, given the higher interest rate environment.”

First-timers spend 37% of pay on mortgages

Analysis by Nationwide shows that first time buyers are spending around 37% of their take-home pay on mortgage payments, with this well above the long-term average of 30% and the 28% average recorded before the pandemic.

Gen Z job seekers turn to parents for help

According to a recent survey, 70% of Generation Z job seekers ask their parents to help them find a job. Of those who have successfully landed a job offer, 83% credit their parents for helping them secure the role. The survey found that 55% of Gen Z job seekers ask their parents to help them write their CV, proofread what they have written (57%), and edit a first draft (38%). The survey also found that almost a third of Gen Z job seekers have taken a parent with them to a job interview, and 30% said their parents had introduced themselves to the hiring manager. Meanwhile, a separate study by KPMG has found that 71% of young people believe certain professions are more accessible if their parents or guardians work in a similar industry. The study also found that 48% had arranged work experience through family or a family friend.

Wage growth expectations ease

A Bank of England poll of decision makers at British businesses shows that expectations for wage growth cooled last month, falling to 4.1% in the three months to July from 4.2% in the three months to June. On a month-by-month basis, expectations for wage growth increased to 4.1% from 4.0%.

Public expect 2.7% inflation

The British public expect inflation to hit 2.7% over the next year, according to a monthly poll from Citi. July’s figure was slightly above the 3% recorded in June. Looking further ahead, respondents expect inflation of around 3.1% in five to 10 years, with this just above June’s 3% prediction.

Markets

Yesterday, the FTSE 100 closed down 1.01% at 8283.36 and the Euro Stoxx 50 closed down 2.2% at 4765.72. In the US at 5pm London time the S&P 500 was down 1.11% at 5461 and the Nasdaq was down 1.58% at 17322. On currencies, the pound ended the day worth $1.2767 and €1.1834. On Commodities, Oil (Brent)  was at $80.23 & Gold at $2445.

The mood in stock markets has quickly soured after  weak US jobs data and ISM manufacturing results have left US investors wondering if the FED has made an error in delaying rate cuts. While Meta is bucking the trend of tech stocks falling after strong results.

US Unemployment Claims rose to 249,000 for the week ended in July 27, higher than a Dow Jones forecast of 235,000. Meanwhile, the US ISM manufacturing index came in at 46.8, adding to a broader picture of slowing economic activity in the States.

In the UK company earnings remained in focus, with another busy day on the corporate calendar. Rolls-Royce topped the leaderboard and jumped as much as 10%, continuing its run as one of the best performing blue chip stocks in recent years. The aerospace firm said it will reinstate its dividend after operating profit jumped 70% to £1.1 billion.

At the other end of the spectrum, Schroders was down as much as 9% despite reporting a modest rise in interim profit and assets under management. Budget airline Wizz Air dropped after swinging to a loss in its first quarter.

Latest Insolvencies

Appointment of Liquidator

CMF 2020-1 PLC
KDW PROJECT MANAGEMENT SERVICES LTD
RJC PROJECTS HOLDINGS LIMITED
SHANNON STREET MILLS LIMITED
JAMES RAPA CONSULTING LIMITED
FRONTLINE ESTATES ( PONTEFRACT ) LIMITED
CHARLES BROWN AND SONS(HAULAGE)LIMITED
JONATHAN POTTER LIMITED
BROWN ET AL. LIMITED
ACORN GLASS (MAIDSTONE) LIMITED
DR D J SCOONES PATHOLOGY SERVICES LTD
GREENROOM SOLUTIONS LIMITED
A P ASSOCIATES FINANCIAL SERVICES LIMITED
SPARAKH LTD
BURLINGTON ESTATES LIMITED
APW SERVICING LIMITED
SOUTH DRIVE VENTURES LTD
J J CARROLL ASSOCIATES LTD

ROCKOVER LTD
EUPHORIUM PUBS LIMITED
RBLAB LTD
RSM MEDIA EXPO LTD
CHESSIDE HOMES LIMITED
ALICHEM (UK) LIMITED
CB EQUITY LLP
LAMBDA SERVICES LIMITED
SMERWICK HARBOUR LIMITED
TOMOLAMOLA CONSULTING LTD
MARTIN THE NEWSAGENT LIMITED
MERKUR SERVICES UK LIMITED
VOLTRITE LIMITED
SHAD FORKLIFTS (NORTH EAST) LTD
KOTABLUE UK LIMITED
D&C LIFTS LIMITED
BEEPS & BOOP LTD
C S J CONSULTING LIMITED
ELEMENT PROPERTY LIMITED
CRR (UK) LIMITED
GREEN ENGINEERING AND DESIGN LTD
SIGHTLINE PUBLICATIONS LIMITED
TH EQUITY BEER LIMITED
LEOTAUR PROPERTY HOLDINGS LTD
BPT (SOUTHERN NUMBER 2) LIMITED
BLUE SHIP CORPORATION LIMITED
DALLAS MCG & CO LIMITED
BLAZELINE LIMITED
BURDENED FLOWER LTD.
KEY TALENT FILM AND TV LIMITED
ALIGADRO LTD
LAW 24 LTD
AXIS WORKSHOPS LIMITED

GELLI HIR FARM LIMITED
DAILEY BUSINESS AND TECHNOLOGY SERVICES LTD
MACFARLANE CONSULTING (SCOTLAND) LTD
STRAWBERRY FIELD DEVELOPMENT LIMITED
DRAGON FORMWORK LIMITED
MCQUEEN LEGAL ESTATE AGENTS LIMITED
MJC SYSTEMS LIMITED
CHIEF EXECUTIVE ORGANISATION LIMITED
G. & S. FAULKNER LIMITED
GRACE STREET DEVELOPMENTS LIMITED
PACIFIC YOGA LIMITED
AE PROPERTY INVESTMENTS LIMITED
ELIZABETH BUCHANAN CONSULTANCY LIMITED
LENVALE GROUP OF COMPANIES LIMITED
DATA PERNIX LIMITED
INNOFUTURES LIMITED
A J KEEN LTD
FINCHSHEER LIMITED
API MANUFACTURING EXCELLENCE LIMITED
TIREE CONSTRUCTION SERVICES LIMITED
NSK 27 TECHNO LTD
W. FORD & SONS (CONTRACTORS) LIMITED
EAST WOOD HOE LIMITED
MOGA LIMITED
N M KHAN & ASSOCIATES LTD.
NIRO CONSULTING LIMITED
DESIGN TO DRINK HOLDINGS LIMITED
THE MAYFLOWER (CHELTENHAM) LIMITED
AMBROSE ESTATES LIMITED

Appointment of Administrator

ARG MAXELA UK LTD

LONDON LIONS GROUP LIMITED
SIMPSON-PARTNERS LTD
ALDERLEY PLC
ALDERLEY SYSTEMS LTD
TOMMI’S BURGER JOINT LTD.
SPECIALISED MANAGEMENT SERVICES LIMITED
LOCKWOOD DESIGNS LIMITED

ACT PRODUCTS LIMITED
R&Q CENTRAL SERVICES LIMITED
HAMLYN WILLIAMS LIMITED

Winding Up Petitions

ION MAN LIMITED
UK THINK TANK LTD
ADVANCED INSURED RESOURCES LTD
SUPREME EBANQ FINTECH LTD
SODAFLEXX LIMITED
ITECH PRO SERVICES LTD
CLIFTONVILLE HOMES LTD
WEST HIGHLAND SERVICES LTD
WAUNCHOPE & WRIGHT LIMITED
RED BRICK MORTGAGES LIMITED
JAMES STORE LTD
FAST DESPATCH LOGISTICS LIMITED
UDP GROUP LIMITED
GDL PROPERTY LTD
EAL LTD
BISHOP FACADES LIMITED
SKYE SCAFFOLDING (LONDON) LIMITED
TEKSOLUTIONS-INC. LTD
TSG NE LTD
CREATIVE COMPANY SOLUTIONS LIMITED
DDM FABRICATIONS LIMITED

HARTTRON LIMITED
PIONEER SCAFFOLDING LTD
COUGAR EXPRESS LIMITED
NORM LABS (UK) LIMITED

CHATHAM PROPERTY SERVICES LIMITED
ATHOL CONTRACTORS LTD
V & R ENTERPRISES LTD
AGUIA GROUP LTD
QRG CONSULTING LTD
L F R LEISURE LTD
SUBLIME DIGITAL LIMITED
ROCK DENIM LIMITED
R AND C LIMITED
LSD SIGNS LIMITED
TENDERIZE LABS LIMITED
STEELS ARE STEEL LTD
LISARB ENERGY GROUP LIMITED

Winding Up Order Notices

THE FROCK SHOP LIMITED
GREEN LAND PD LIMITED

THE PLUMAGE LIMITED
MEGA GADGETS LIMITED
SWIFT SCAFFOLD PARTNERS LLP
S C DUNCAN STEVENAGE LTD
ADISEL LIMITED
AAT LAB LTD
NEO ENERGY LTD
ONLINE DIGITAL SERVICES LTD
NORTHERN GAS SERVICES LTD
HTJ CONTRACTORS LIMITED
RESIDENTIAL AIR SYSTEMS LTD
CASSEK LIMITED
BLACKHORSE DEVELOPMENTS 2019 LTD
NORTH YORKSHIRE CLASSIC LTD
LEWES BUILDERS LIMITED

LAL-AKASH RESTAURANTS LIMITED
LACKFIELD LTD
PIPE2K LTD
PHC GROUP LTD
RTS GROUNDWORK’S AND SOLAR INSTALLATION CONTRACTORS LTD
BALANCE BAY LIMITED
ROCORSA LIMITED
AURA RENOVATIONS SUSSEX LIMITED
ELEFTHERIOU TAVERNS LTD
AYRESOME CONSULTING LIMITED
ADVANCE BIOTECH LABORATORIES LTD
CASA PURO LIMITED
CRAWFORD CAFE LIMITED
JR SALES LIMITED
LEEWAY MOTOR COMPANY LIMITED
REDITUM CAPITAL MANAGEMENT LIMITED
WEST SUSSEX LOFTS LTD
MB BUILDING CONTRACTORS NORTHWEST LIMITED
AMEYCROFT DEVELOPMENTS LTD
WATERFIELD DUDLEY (HUNSTANTON 1) LIMITED
HALEWYNN LIMITED
BOXAPPETI LTD
FRONTLINE MEDICALS AND DIAGNOSTIC LTD
SHIPHAM HOLDINGS LIMITED
MADDOX RETAIL LTD
SARM SERVICES LIMITED
KARUNSI COMPANY LIMITED
JOHNSON’S BESPOKE IMPRINTED CONCRETE AND GROUNDWORKS LIMITED
TELOS DEVELOPMENT LIMITED
ANGLIAN CONSTRUCTION LTD
KRYSTAL – KLEAR SUPPLIES LTD
A.A. MASTERNAK TRANSPORT LTD

Why you should become a CPA member!

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.

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.

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 turning to more debt, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cash flow, then talk to CPA about how we can help you reduce those late payments.

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. CPA’s overdue account recovery service is a polite, efficient service designed to encourage prompter payments while maintaining goodwill. We direct your customers to pay directly to you, not to us and want to support and reinstate your direct relationship with your customer, not take it over, destroying goodwill.

Unlike other credit management companies, our overdue account recovery service is available to our members on a fixed annual subscription so you can pass any overdue accounts to this service and it is included in your subscription!

Our Overdue account recovery service resolves over 80% of accounts referred to us although our collections department is there to escalate the collections process on the remaining few if you require it.

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.