Business news  3 January 2024

James Salmon, Operations Director.

UK manufacturing sector contracts for 17th consecutive month. Insolvencies. Red Sea disruption a threat to inflation.  And more business news that we thought would interest our members.

UK manufacturing sector contracts for 17th consecutive month

The UK’s manufacturing sector contracted for the 17th consecutive month in December due to higher borrowing costs and a slump in demand. Factory output fell last month, with orders declining from both domestic and export clients. The S&P Global/CIPS manufacturing purchasing managers index (PMI) weakened to 46.2 with manufacturers facing pressure from increased borrowing costs and a slowdown in international trade. Business optimism among manufacturers is at a 12-month low, but companies still expect production volumes to increase in the coming year. Martin Beck, the chief economic adviser to the EY Item Club, said: “The post-Covid global readjustment of consumer spending patterns from goods back to services has probably now largely run its course, relieving manufacturers of a major headwind faced over the last year. An easing in cost-of-living pressures following a swift decline in inflation in the UK and abroad should support demand for goods.”


The Office of National Statistics recently published the company insolvency statistics for Q3 with 6,208 company insolvencies. Marking the highest rates Of company insolvencies since 2008 and a 10% increase on the number of company insolvencies in Q3 of 2022. It is the first time that company insolvencies exceeded 6,000 in a single quarter since 2008.

Institute of Directors’ Economic Confidence Index down

The Institute of Directors’ Economic Confidence Index (measuring directors’ optimism about the UK economy for the next 12 months) dropped to minus 28 in December from minus 21 in November, its lowest level since August and close to an annual low. Company executives called on the Bank of England to cut interest rates soon to support the flagging economy after “depressed” confidence sank to a four-month low. Mounting recession fears helped drive the index to the lows.

Red Sea disruption a threat to inflation

Shipping giant Maersk has suspended all trade through the Red Sea, raising concerns over higher oil prices and shipping costs. Economists warn that the suspension, due to attacks by Iran-backed Houthi rebels, could lead to a surge in oil prices to $90 per barrel if tensions escalate further. The disruption is already driving up shipping costs as ships are rerouted around the Cape of Good Hope in Africa. This could result in higher petrol prices and energy costs, making it harder for the Bank of England to cut interest rates. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, said: “Red Sea tensions may push central banks to keep interest rates higher for longer, adding to the downward pressure on economic activity.” Martin Beck, chief economic adviser to the EY Item Club, added: “If inflation did pick up, it would make it harder to cut taxes again.” Additionally, new EU carbon taxes are inflating fuel costs associated with longer shipping routes.

One-quarter of UK buy now, pay later users hit by late repayment fees

Some 22% of BNPL users have missed one or more repayments in the six months to December 2023, leading to late payment fees and in a quarter of cases, a mark against their credit score too.

TISE looks to cash in on listings lull

A new service for private companies from The International Stock Exchange (TISE) allows unlisted companies to hold a dedicated monthly auction for their shares. The TISE Private Markets service, launched in September last year, provides a platform for buying and selling shares without intermediaries. The service aims to attract 50 clients within five years and has already signed up Blue Diamond, the UK’s largest garden centre group. The platform could also be used for trading employee share schemes and has the potential to attract the 20,000 private companies with over 100 employees, according to Cees Vermaas, CEO of the Guernsey-based company. Meanwhile, EY found that “market challenges, high inflation and interest rates” had led to a decline in UK initial public offerings last year, with only 14 listings raising $600m, in contrast with 22 listings the previous year.

HMRC issues self-assessment deadline warning

HMRC has warned nearly 5.7m people still need to file their self-assessment tax return ahead of the upcoming January 31, 2024, deadline. Missing this date will result in an initial fine of £100, even if no tax is owed. Additional penalties of £10 per day are applied after three months, up to a maximum of £900. After six months, a further penalty of 5% of the tax due or £300, whichever is greater, is imposed. After 12 months, another 5% or £300 charge is applied. Late payment of tax also incurs fines and interest. Myrtle Lloyd, HMRC Director General for Customer Services, advises not to delay and start the self-assessment process. Those struggling to pay their tax bill may be eligible for a payment plan with HMRC.


Ryanair said it carried 12.5 million passengers in December, up 8.7% from 11.5 million passengers a year earlier, at a load factor of 91% from 92%. It said it operated over 72,500 flights in December, while over 900 flights were cancelled due to the Israel/Gaza conflict. Across 2023, it carried 181.8 million passengers, up 13% from 160.4 million in 2022, at a load factor of 94% from 92%.

BYD v Tesla

BYD – the Chinese electric car company you haven’t heard of – sold more EVs than Tesla in the fourth quarter of 2023, making it the world’s biggest electric-vehicle maker. BYD sold more than 525,000 EV’s, driven by the asian popularity for their cheaper models. Tesla however, exceeded its annual sales target, selling 485,000 sales in the fourth quarter and annually they lead with a total of 1.8m EV sales in 2023.


Oil Prices stabilised in early Asian trade on Wednesday after sharp moves earlier in the week, as markets weighed concerns about the US economy and potential supply disruptions from ongoing tensions in the Red Sea.


Supermarkets had their busiest Christmas period since 2019, boosted by promotions, new research from Kantar says. Customers spent £13.7bn, despite food price inflation fallinh to 6.7% in December. With the average British household spending £477.

Lidl and Aldi recorded their ‘best ever’ Christmas performances as food inflation falls but shoppers still hunt the bargains.

City firms bring in new working arrangements to save cash

The City’s professional services firms have revived four day week policies and other schemes to save money as the deal-making slump continues. However, they don’t want to be caught out when activity starts spiking so they are looking to avoid making sweeping redundancies if they can. Fladgate, a City law firm, last month asked associates in its real estate team to switch to a shorter working week and reduced pay for the first quarter of 2024. Fiona Czerniawska, a consulting sector expert, says the Big Four accounting firms are unlikely to undertake any more drastic layoffs after last year’s redundancies. She instead expects professional services firms to adopt temporary measures to save cash, including deferring start dates for graduates and apprenticeships, reducing working hours or quietly managing out underperforming staff who don’t meet billable hours targets.

Financial pressures delay 19% of divorces, study finds

Over 270,000 divorces have been delayed due to financial pressures, with 19% of divorces affected since 2020, according to a study by Legal and General. The research revealed that nearly half of those who divorced experienced financial difficulties, with their annual income dropping by an average of £10,000 after separation. Despite the high number of postponed divorces, only one in five couples discuss their pensions when dividing assets. The Pensions and Lifetime Savings Association (PSLA) has released new online guidance to help spouses splitting up. The study also found that 48% of divorcees felt the process was financially unfair, and 69% did not sign Clean Break Orders, leaving them open to future claims from their former spouse. Retirement funds are also being impacted, with divorcees over the age of 50 saving an average of £63 less per month for their pensions.

UK to have wasted £1bn on COVID-19 drugs by June

More than one million courses of Paxlovid – an antiviral developed by Pfizer for COVID-19 treatment – have now expired in the UK. According to a report from the health analytics firm Airfinty, this waste has cost £550m but could double by the end of June. Experts say the high level of wastage, compared with European countries, is due to overly tight restrictions on who could be prescribed the drugs. Pfizer sold $19bn of Paxlovid in 2022, but this dropped to just $1bn in 2023 as the threat from SARS-CoV-2 eased and the drug’s efficacy against new variants declined.

Labour risks pushing the wealthy out if it wins the election

The prospect of a Labour government could lead to an exodus of the country’s wealthiest individuals, lawyers warn. Labour’s tax policies, although ruling out a wealth tax or an increase in the top rate of income tax, have raised concerns among higher earners. The party plans to scrap the “non-dom” status, potentially causing tens of thousands of globally mobile higher earners to leave the UK. James Ward, of Kingsley Napley, said: “It’s not as if non-doms are just going to roll over and start paying tax on their foreign income. There are many other countries where they can move to get favourable tax treatment.” Rumours that capital gains tax rates will rise significantly has led many business owners to seek advice on their options to move overseas, says Chris Etherington of RSM. “Taking the step of moving overseas is usually a reluctant one for business owners but with technology making it easier to work remotely, it is not necessarily the empty threat it once was,” he explained. Additionally, Labour’s proposed tax raid on private schools has already prompted some parents to move their children to schools overseas while wealthy retirees may also seek to move abroad to avoid potential tax charges on their pension pots.

Tory stealth taxes will hit 1.6m workers, Labour claims

Analysis by the Labour party reveals that low-income workers, particularly those in the hospitality, retail, and cleaning and maintenance sectors, will be heavily impacted by Tory stealth taxes. By 2024-2025, a family with two adults working full time on the National Living Wage will pay £1,320 more per year, Labour says. This is down to stealth taxes buried in the Chancellor Jeremy Hunt’s Autumn Statement, including income tax and national insurance threshold freezes and council tax hikes, the party claims. Labour has launched an online ‘Tory tax calculator’ to help the public determine how much worse off they will be after 25 tax rises since the 2019 general election. Labour’s shadow chief secretary to the treasury, Darren Jones, criticised the Chancellor for burdening working families with higher taxes while public services suffer and the economy stagnates.

Labour and Lib Dems plan tax attacks on Tories

Rachel Reeves is considering offering tax or national insurance cuts in Labour’s general election manifesto to address the cost of living crisis. The cuts must be “bombproof” and not threaten the party’s fiscal credibility, the shadow chancellor said. Labour’s offer will depend on the Conservative Party’s tax plans, with Rishi Sunak considering cuts to inheritance tax or income tax. Labour is likely to support any Tory pledge to cut income tax but opposes scrapping or reducing inheritance tax. Darren Jones, the shadow chief secretary to the treasury, stated that Labour wants taxes to come down on working people. Meanwhile, research commissioned by the Liberal Democrats found about 1.1m taxpayers in London and the South East will be pushed into the 40p rate of income tax by 2027-28. The party is planning to make an attack on government “stealth taxes” a pillar of its election campaign and plans to target marginal Tory-held constituencies across London, the Home Counties and other parts of the South East and South West.

Latest Insolvencies

Petitions to wind up (Companies) – CALTEC ENVIRONMENTAL SERVICES LTD
Petitions to wind up (Companies) – ABG NETWORK LTD
Petitions to wind up (Companies) – ZEAD CARS LIMITED
Petitions to wind up (Companies) – J.P.M. CONTRACTORS LIMITED
Petitions to wind up (Companies) – MECOY LIMITED
Appointment of Liquidators – PACIFIC SHELF 1852 LIMITED
Appointment of Administrator – IOG PLC
Petitions to wind up (Companies) – ASSET STOURBRIDGE LLP
Appointment of Liquidators – LEAP CAPITAL LIMITED
Petitions to wind up (Companies) – GAJ BUILDERS & SON LTD
Petitions to wind up (Companies) – RENUGEN LIMITED
Petitions to wind up (Companies) – THE MERCANTILE FLEA LTD
Petitions to wind up (Companies) – YA HOLDINGS LTD
Petitions to wind up (Companies) – MARRONS SITE SERVICES LTD
Appointment of Administrator – PURE CRAFT BARS LIMITED
Appointment of Administrator – PURITY BREWING COMPANY LIMITED
Appointment of Liquidators – GLOBAL TREASURY ADVISORY LTD
Petitions to wind up (Companies) – DESIGN SOLOUTIONS LIMITED
Petitions to wind up (Companies) – KEOGH NORTH WEST LTD
Appointment of Liquidators – OLIVE TREE VENTURES LIMITED

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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.


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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.