Business news 2 October 2023

James Salmon, Operations Director.

Economy has grown faster than previously estimated.  Debt on Energy Bills rises 36%. People pushed towards payday loans and BNPL. Energy bills forecast to rise in January.  And more business news that we thought would interest our members.

This blog is taking a short break and returning on 11th October 2023.

Economy has grown faster than previously estimated

The UK economy has grown faster since the start of the pandemic than initially thought, according to Office for National Statistics (ONS) figures. Revised data shows that the economy has grown by 1.8% since the pandemic started. The previous estimate had pointed to a 0.2% contraction.

Thomas Pugh, an economist at RSM UK, said the revisions add around £50bn to UK GDP. Revised figures for Q1 2023 also show that the economy expanded 0.3% – up from the 0.1% previously estimated. The estimate for Q2 was unchanged at 0.2%. The latest ONS figures mean that the UK’s growth since the pandemic exceeds the 1.7% recorded in France and Germany’s 0.2% increase.

Chancellor Jeremy Hunt said: “We know that the British economy recovered faster from the pandemic than anyone previously thought,” adding that the fresh data “once again proves the doubters wrong.” However, Ruth Gregory, deputy chief UK economist at Capital Economics, said the update from the ONS “does not change the big picture that the economy has lagged behind all other G7 countries aside from Germany and France since the pandemic. And that’s before the full drag from higher interest rates has been felt.”

 Debt on Energy Bills rises 36%

EDF Energy report that the number of homes falling into debt on their energy bills has increased by 36% since the beginning of the year.

FCA: People pushed towards payday loans and BNPL

The Financial Conduct Authority says the cost-of-living crunch is pushing people toward payday loans and buy-now pay-later (BNPL) products.

The regulator’s chief executive, Nikhil Rathi, has warned that rising prices have pushed people into debt, with many still unable to access financial products. FCA analysis shows that the number of people in financial difficulty rose from 8% in May 2022 to 11% in January 2023, while the proportion finding it a “heavy burden” to pay bills increased from 15% to 21% in the same period. It also shows that 1.1m people – 2.1% of the population – are without a bank account and unable to access normal credit products.

Mr Rathi said the rise in the appeal of BNPL products and payday loans is “unsurprising,” noting that the watchdog has capped the cost of payday lending and is ready to regulate the sector to ensure consumers continue to benefit from innovation and maintain access to affordable credit, while being treated fairly. He also highlighted that the FCA has secured changes to “potentially unfair and unclear terms” in the contracts of BNPL firms Clearpay, Klarna, Laybuy and Openpay.

Energy bills forecast to rise in January

Consultancy firm Cornwall Insight predicts that annual energy bills for a typical household are expected to rise by £73 to £1,996 in January. Under Ofgem’s energy price cap, the typical annual bill will be £1,923 between October and December, with this down from the £2,074 seen in the July through September quarter. Dr Craig Lowrey, principal consultant at Cornwall Insight, said an increase in January is “not wholly unexpected,” adding: “While the rise is small, it shows we cannot just assume prices will continue their fall and eventually reach pre-pandemic levels.” Analysts say January’s predicted increase is down to a rise in wholesale energy prices.

Banks warned over impact of high rates

The Bank of England has warned banks against underestimating the scale of losses they could suffer from defaults on bad loans as a result of rising interest rates. Writing to the chief financial officers of big lenders it supervises, the Bank said it wants them to model severe economic stresses that could result in loan defaults and credit losses. Vicky Saporta, executive director of the Bank’s prudential policy directorate, wrote: “We encourage all firms to consider additional, more severe but plausible, economic scenarios that encompass shocks affecting those sectors or segments most vulnerable to higher inflation and interest rates.”

New Brexit border checks to cost business £330m a year

The Government has admitted that new post-Brexit border controls on animal and plant products imported from the EU will cost businesses an estimated £330m a year. Lucy Neville-Rolfe, a minister of state in the Cabinet Office, confirmed the estimated costs in a letter to Labour MP Stella Creasy, the chair of the Labour Movement for Europe. “It will depend greatly on how businesses adapt their business models and supply chains to integrate the new controls regime,” said Baroness Neville-Rolfe. “We have not had full biosecurity controls in place at our border since leaving the European Union,” she explained, adding that tighter border controls were needed to “protect our international reputation”.

UK exporters face hefty EU carbon tax bill after Sunak weakens climate policies

The weakening of UK climate targets has left British exporters facing hundreds of millions of pounds in EU carbon border taxes when the regime comes into force in 2026.

Living Wage

The tories are set to announce at their conference that the living wage will be increased from £10.42 to £11.00.

Water companies

Water companies want to increase their average bills by £156 a year by 2030 to pay for upgrades to the systems and reduce the number of sewage discharges into river and seas. Having profited for years forom the industry, the companies now want customers to fund the investment so they can avoid the fines being imposed.

First Class Stamps

Royal Mail are increasing the price of a first class stamp from £1.10 to £1.25 in the third rise in 18 months.  The price of a second class stamp remains unchanged at 75p. Royal mail is trying to combat falling postage levels with increased costs. In the last 20 years the number of letters sent has fallen from 20 billion to 7 billion while the number of homes has increased by 4 billion.

House Prices

UK House Prices declined 5.3% on-year last month, following a fall of the same pace in August. On a monthly basis, prices were flat in September, following a 0.8% decline in August from July. Nationwide Chief Economist Robert Gardner said: “Housing market activity remains weak, with just 45,400 mortgages approved for house purchase in August, [around] 30% below the monthly average prevailing in 2019 before the pandemic struck. This relatively subdued picture is not surprising given the more challenging picture for housing affordability.”

Unsecured Wilko creditors face big losses

A report from administrator PwC shows that unsecured creditors in Wilko are owed £550m but could see as little as 4p in the pound returned. Landlords and other unsecured creditors of the main trading company were owed about £470m when the retailer collapsed. Across all Wilko entities, the amount totals about £550m, with this likely to be much more once creditors have submitted their claims. According to PwC’s initial estimate, they face recovering between 4p and 8p in the pound. More than 2,000 members of Wilko’s defined-benefit pension scheme also face big cuts to their retirement payouts, with the deficit estimated at £70.2m. The scheme is set to recover £20m due to the security that it holds over some of Wilko’s freehold properties.

Indecision over HS2 will cost jobs, engineers say

Swedish construction giant Skanska, which is one of HS2’s biggest contractors, has begun planning for a raft of redundancies citing indecision over the high-speed rail link and a decision in March to push back the Lower Thames Crossing road project by two years. Dutch company Arcadis has also said scaling back the project would have implications for jobs. Chris Southworth, UK secretary-general of the International Chamber of Commerce, said: “[The HS2 uncertainty] sends all the wrong messages to investors – the UK is short-sighted, unreliable and inconsistent.”

London Stocks

London’s stock market is close to recovering its crown as Europe’s biggest equity market, less than a year after losing it to Paris, as the rally in French luxury good companies wobbles. The  British listings in US dollar terms now stands at $2.90 trillion compared to $2.93 trillion for Paris with the gap narrowing steadilywith France having slid from it’s $3.5 trillion record in the year.

BAE Systems

The government awarded BAE Systems, the country’s biggest defence company, a £4bn contract to build attack submarines as part of the AUKUS pact with Australia and America.

More over-50s embrace part-time work

Rather than retiring or continuing with full-time employment, an increasing number of over-50s are opting for part-time work, the Times reports. A record 3.6m people over the age of 50 are now working part-time, a 12% increase on 2021, according to the Office for National Statistics. Many of those going part-time are choosing to drive for a living, whether its as an Uber driver or long haul transport, according to census data.

Lockdowns made Gen Z employees ‘entitled’ and workshy

Britain’s businesses and workplaces are struggling to bring back their ‘Generation Covid’ employees to the office. Companies such as KPMG and HSBC are offering perks such as free meals and networking opportunities. However, many employers say a large proportion of Generation Z are increasingly viewing work as an inherent negative. A study by Robert Walters suggested that Gen Z’ers entering the workplace work better with devices than people. Associate director Janine Blacksley said many have entered the workplace “remotely or in a hybrid manner” so social skills have taken a hit. Liz Villani, founder of BeYourselfAtWork said: “There’s an air of entitlement in the workforce at the moment…Workplace friendships are less common than before, productivity is lower and…sickness leave is at an all-time high. These are all symptoms of a culture that views work as a negative thing. We need to reverse these trends to help our businesses grow, for teams to become more closely tied, and more importantly so that people can strive to enjoy what they do for most of their waking hours.”

Chancellor to unveil crackdown on workshy benefits claimants

The Chancellor, Jeremy Hunt, will today announce harsher punishments for benefits claimants who refuse to look for work, arguing that it is unfair for those on benefits not trying to get a job to get the same financial support as those who do. Plans being considered include cutting benefits for those who repeatedly refuse to go to job interviews or applying new conditions requiring people to pursue job opportunities before getting their out of work benefits. Tory insiders say the policy could be aimed at up to 100,000 people. Exact policies will be unveiled in the Autumn Statement next month. Mr Hunt will also use his speech today to announce that the National Living Wage will rise to above £11 an hour next April, up from its current level of £10.42, meaning a pay boost for two million people. The move will meet a 2019 manifesto commitment to increase pay for the lowest paid to two-thirds of median earnings.

Tories preside over record taxes, spending

New figures show that the UK Government has raised taxes more than any other post-war government. Rishi Sunak’s policies have resulted in record taxes, higher spending, and mass state subsidies. The tax burden is a result of conscious choices, leading to a permanent shift towards a higher-tax economy, the Sunday Telegraph asserts. Millions more people are being dragged into higher income tax bands, and the first increase in corporation tax since the 1970s has been implemented. The ballooning welfare bill and rising benefits costs are also contributing to the tax burden. The UK’s tax burden is on track to move back above the OECD average, putting Britain towards the wrong end of the competitive scale of nations. The Government’s freeze on income tax brackets and higher levies for businesses are further squeezing British workers. The trend of increasing spending is unsustainable, the paper says, and the size of the state is projected to grow to almost 65% of the economy in 50 years. The Government must address the need for higher taxes or face significant challenges in funding public services.

UK fintechs keen on digital pound
The fintech industry is backing the creation of a digital pound, arguing it would spur innovation and create a more competitive payments environment. Adam Jackson, director of policy at Innovate Finance, said a digital pound would “reinforce the UK’s position as a global leader in payments” while it should also “stimulate innovation across a variety of domestic markets”. The Bank of England is considering running a platform model for the central bank digital currency, whereby it will run the main architecture but let private sector actors engage with consumers. Varun Paul, director of CBDCs at Fireblocks and former head of the BoE’s fintech hub, said the setup should “create a low barrier to entry for fintechs to compete for customers”.

US government funding

On Saturday, hard-right Republicans in the House of Representatives voted down a last-ditch stopgap funding bill, sponsored by their own party, aimed at preventing a government shutdown on October 1st.  However, US legislators were able to come to a temporary agreement to 17th November that staved off a US government shutdown with deep cuts in expenditure after a compromise between Republicans and Democrats which infuriated the hard liners on the right who wanted a shutdown.

Latest Insolvencies

Appointment of Liquidators – ENCORE (VOG) LIMITED
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Appointment of Liquidators – TRAVEL CATS MEDIA LTD
Appointment of Liquidators – PERDIAL LIMITED
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Petitions to wind up (Companies) – DAMAN NATIONAL LIMITED
Winding up Order (Companies) – ITTAI LIMITED
Appointment of Liquidators – LRS AVIATION LIMITED
Appointment of Liquidators – CLR PARTNERS LTD
Petitions to wind up (Companies) – WOODSOME ESTATES LIMITED
Petitions to wind up (Companies) – WOOLWELL FISH BAR LIMITED
Petitions to wind up (Companies) – LAWSON CONTRACTS LTD
Appointment of Liquidators – RMDK HOLDCO LIMITED
Appointment of Liquidators – K&K FISHING LTD
Petitions to wind up (Companies) – BYM CAPITAL LIMITED
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Appointment of Liquidators – ROSE PUBLICATIONS LIMITED
Petitions to wind up (Companies) – INFINITY FINANCIAL HOLDINGS LIMITED
Petitions to wind up (Companies) – KITFIT JOINERS LTD
Petitions to wind up (Companies) – BRADY’S CRAFT BUTCHERS LIMITED
Appointment of Liquidators – EXCEEDRA SOFTWARE LIMITED
Petitions to wind up (Companies) – TRONGATE BARISTAS LIMITED
Appointment of Liquidators – HACKAMORE TWO LTD
Appointment of Administrator – LUMLEY CASTLE HOTEL LIMITED
Petitions to wind up (Companies) – INSITE DIGITAL SOLUTIONS LIMITED
Appointment of Liquidators – EDEN BISTRO LIMITED
Appointment of Liquidators – SHAPE PARTNERS LTD
Petitions to wind up (Companies) – GEGAN SOLUTIONS LIMITED
Appointment of Liquidators – TRANSGLOBUS LTD
Petitions to wind up (Companies) – RAPHAEL HOSPITALITY LTD
Appointment of Liquidators – RP ROOFING AND CLADDING LIMITED
Appointment of Liquidators – MATRIX SHOPFITTERS LIMITED

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 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 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.