Business news 3 February 2025
The Economy, tariffs, business confidence, fraud, trade, growth forecasts, interest rates, retail, work, interest rates, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
New workers’ rights laws will shrink economy
Labour’s claim that new rights for workers will boost the economy because “a secure workforce is a more confident, more productive workforce” does not hold up to scrutiny, the Sunday Telegraph reports. Employers and even a Whitehall report show a negligible link between employment rights and growth. A study by the Regulatory Policy Committee concluded that the evidence presented to back the controversial Employment Rights Bill was “not fit for purpose” in multiple areas and that new protections would likely lead to reduced demand for labour. Neil Carberry, the chief executive of the Recruitment and Employment Confederation, points out that “more secure” working environments would mean fewer vacancies as less people moved jobs, reducing mobility and economic dynamism. With the Employment Rights Bill being imposed alongside a £25bn tax raid on employers and a higher minimum wage, which has already reduced vacancies, improved benefits in work are unlikely to be much help to the economy.
Business confidence hits new lows
Business confidence in the UK remains “historically depressed,” with the Institute of Director’s (IoD) economic confidence index at -59 in January, slightly up from -61 in December. “Confidence remains close to its Covid lows,” Anna Leach, chief economist at the IoD said. “It is clear that companies continue to be challenged by the breadth and scale of cost increases announced at the Budget, and this risks undermining both the investment needed to drive growth and the sustainability of the public finances,” she said.
SMEs halt sales due to new EU rules
New EU product safety regulations have forced small and medium-sized enterprises (SMEs) to suspend sales to the bloc and Northern Ireland since mid-December. Roger Holden of Skye Weavers expressed frustration, stating: “What I find extraordinary is it has gone pretty much under the radar.” The General Product Safety Regulation (GPSR), effective from 13 December, requires British companies to appoint a “responsible economic operator” within the EU to manage product issues. This has caused confusion and additional costs for SMEs, as highlighted by William Bain, head of trade policy at the British Chambers of Commerce, who noted that the UK Government has not adequately communicated these changes.
UK growth forecast slashed for 2025
The UK’s growth outlook for 2025 has been significantly downgraded, with the economy expected to grow by only 1% this year, according to the EY Item Club. This reduction follows a disappointing end to 2024, attributed largely to the Chancellor’s tax-raising Budget, which has dampened business confidence and investment. Matt Swannell, chief economic advisor to the EY Item Club, said: “A weaker-than-expected finish to 2024 left the UK economy with a greater hill to climb to achieve moderate growth this year.” The potential for a global trade war, instigated by Donald Trump, poses additional risks, although the UK is less exposed than other economies.
Interest rate cuts on the horizon
The Bank of England is poised to reduce interest rates from 4.75% to 4.5% next week. This decision, driven by slowing economic growth and a dip in inflation, is expected to lead to a series of cuts throughout 2025. But for those hoping for immediate savings on mortgage payments, Sarah Coles, head of personal finance at Hargreaves Lansdown, cautioned: “A rate cut has been on the cards ever since inflation fell in December, [so] it won’t be a game-changer overnight.”
Work harder to compete globally – Philp
Chris Philp, the shadow home secretary, has stressed the need for Brits to enhance their work ethic to compete with global rivals like China and India. Despite a slight decrease in economic inactivity, 9.3m people remain out of work, with many citing long-term illness or education as reasons. Speaking on BBC Radio 4’s Political Thinking podcast, Philp advocated for a cultural shift towards greater effort. But Labour hit out at the comments while TUC general secretary Paul Nowak argued that the issue lies not in work ethic but in inadequate pay, urging support for workers’ rights and wages.
Minister for Fraud vows crackdown
The UK’s Minister for Fraud, Lord Hanson, has pledged to combat a significant rise in fraud incidents, which surged by 19% to nearly 4m cases in the year leading to September, as reported by the British Crime Survey. He described fraud as a “truly shameful crime,” highlighting the severe financial and emotional toll on victims. A new fraud strategy is set to be introduced, including a new offence of failure to prevent fraud. The Office for National Statistics noted that bank and credit account fraud rose by 15% to approximately 2.2m incidents, while consumer and retail fraud increased by 26% to about 1m incidents. Lord Hanson said: “As dedicated Minister for Fraud, it is my number one mission to root it out and crack down on the callous individuals who enable it.”
High street sales rise, but risks loom
High street sales in January increased by 7.1%, driven mainly by a 15.5% rise in online sales, according to BDO’s latest High Street Sales Tracker. However, this growth follows a 0.8% decline last January, highlighting ongoing struggles in the sector. Sophie Michael, head of retail and wholesale at BDO, noted that the industry has faced challenges due to rising costs, which are expected to escalate further this year. Tim Black from Frontier Economics warned that “in low-margin, highly competitive markets, there’s limited room to absorb higher costs.” Elsewhere, the British Retail Consortium has indicated that retailers could face a cumulative cost burden of £7bn, while the Centre for Retail Research predicts over 200,000 retail jobs and 17,000 stores may vanish next year due to these pressures and a shift towards experiential leisure.
Markets
London markets extended gains on Friday, closing out a strong week for UK equities. The FTSE tested 8,700 points and closed up 0.31% at 8673.96, while the mid cap index added about 0.7%.
In Europe, stocks were mixed after German inflation came in unchanged at 2.8% and the Euro Stoxx 50 closed flat at 5280.71.
Over in the US, Wall Street was higher as investors reacted to an inflation report and earnings from Apple. US Inflation closed out 2024 on a strong note, as a price gauge the Federal Reserve focuses on came in well above the central bank’s target, the Commerce Department reported Friday. The personal consumption expenditures price index increased 2.6% on a year-over-year basis in December, 0.2 percentage point higher than the November reading and in line with the Dow Jones estimate. The S&P 500 fell 0.50% to 6040.53 and the NASDAQ fell 0.28% to 19627.44.
Last week it was Deepseek, this week it is tariffs as Donald Trump has imposed tariffs of 25% on Canada and Mexico and 10% on China in the most extensive act of protectionism by a US president in almost a century. The move threatens to hobble the US economy and push up prices for consumers. Canada has responded in kind with 25% tariffs on imports from the US.
The dollar has jumped by around 1% against most other currencies as the Canadian dollar dropped to its lowest since 2003. Goldman Sachs said there’s a risk of a 5% slump in US stocks because of the hit to corporate earnings. Energy markets were also spooked as Canada is the biggest importer of energy to the US.
It has been dubbed Manic Monday.
This morning on currencies, the pound is currently worth $1.2366 and €1.2049. On Commodities, Oil (Brent) is at $77.21 & Gold is at $2814. On the stock markets, the FTSE 100 is currently down 1.45% at 8547 and the Eurostoxx 50 is down 1.7% at 5195.
House prices slow down in January
House price growth in the UK has decelerated, with Nationwide Building Society reporting a 4.1% annual increase as of January, down from 4.7% in December. Despite rising average earnings, high mortgage rates are hindering buyers. The number of homes available is at a seven-year high, giving buyers leverage in negotiations. The average property price remains just below the peak of £273,751 reached in August 2022, currently at £268,213. Robert Gardner, chief economist at Nationwide, said: “Affordability remains stretched by historic standards,” highlighting that first-time buyers now pay five times their salary for a home, down from 5.8 times in mid-2022. Nationwide predicts a potential price increase of 2% to 4% by year-end, but market caution persists due to the abundance of properties available.
Trump hits China, Canada and Mexico with tariffs – EU next
US president Donald Trump has initiated trade tariffs on Mexico, Canada and China and threatened to put a levy on goods from the EU too. “They don’t take our cars, they don’t take our farm products, essentially, they don’t take almost anything,” he said. “And we have a tremendous deficit with the European Union. So we’ll be doing something very substantial with the European Union.” Tariffs of 25% on Canada and Mexico will take effect today while China will be hit with a 10% levy. Trump is demanding that the countries stem the flow of illegal migrants and drugs into the US. The US will put tariffs on oil and gas later this month in a further blow to Canada and Mexico.
Trump’s trade war triggers tit-for-tat tariffs
Yvette Cooper, the Home Secretary, has expressed concerns over Donald Trump’s tariffs on China, Mexico, and Canada, stating they could have a “really damaging impact” on the global economy. During an interview on BBC’s Sunday with Laura Kuenssberg, she stressed the importance of reducing trade barriers, saying: “We want to reduce the barriers to trade, make it easier for businesses.” Meanwhile, Andrew Griffith, the Conservative shadow business secretary, suggested that the UK could negotiate a trade deal with the Trump administration to avoid tariffs, highlighting a “big opportunity” for a US trade deal post-Brexit. In response to Trump’s actions, Canada and Mexico have vowed retaliation, with Canada planning to impose 25% tariffs on C$155bn of US goods. China too has said it will “take necessary countermeasures to defend its rights and interests” after Trump hit Beijing with new 10% tariffs.
All three countries have vowed to retaliate. Mr Trump admitted that Americans could feel “some pain”. He also promised to slap tariffs on the European Union.
Pound struggles amid economic fears
The pound is on track for its fourth consecutive monthly loss, driven by investor concerns regarding the British economy’s outlook amid January’s bond market turmoil. Sterling dropped 0.7% in January, accumulating losses of over 7.5% since reaching a 2-1/2-year high in September. Despite a recent recovery in long-term gilt yields, macroeconomic indicators suggest a rapidly slowing economy, with rising unemployment and declining consumer spending. Monex Europe strategists noted: “With nothing else on the docket… we expect sterling to track euro moves,” suggesting further downside risks against the dollar.
Rates set for a drop this week
The Bank of England is expected to announce a reduction in the UK’s base interest rate, potentially lowering it to 4.5%, the lowest in over 18 months. Senior economists will meet on Thursday to discuss this quarter-point cut, amidst concerns about rising inflation, currently at 2.5%, which exceeds the Bank’s target of 2%. Thomas Pugh, an economist at RSM, stated: “The economy has clearly underperformed since the last set of forecasts,” highlighting the challenges the Bank faces in balancing economic stimulation with inflationary pressures. Matt Swannell from the EY Item Club also noted that while a cut is “highly likely,” the Bank must navigate a longer-term dilemma of weaker growth and rising near-term inflation
Gold stockpiling in New York leads to London shortage
Gold prices surged this week as commercial banks rushed to ship the precious metal to New York to avoid potential import tariffs there. London bullion traders were borrowing heavily from central banks holding reserves at the Bank of England following a surge in gold deliveries to the US. The shortage means the waiting time for delivery has increased to around seven weeks. In normal times, the release time is a few days or a week.
Welfare overhaul: Sick must seek work
The UK Government is set to implement significant reforms to the welfare system, particularly affecting long-term sick individuals. Work and pensions secretary Liz Kendall stated that the current system is “broken” and needs to change to encourage people back to work while managing the rising welfare costs. The proposed changes may lead to reduced sickness benefit payments for hundreds of thousands, especially those with mental health conditions, who will face stricter eligibility criteria. The Government aims to introduce a “duty to engage” with employment services, helping claimants prepare for work. With the welfare bill exceeding £65bn, the reforms are seen as essential to prevent an emergency tax-raising budget. Discussions with disability groups are ongoing, but the changes are likely to provoke backlash from Labour and campaigners.
New guidance boosts neurodiversity support
Acas has introduced new guidance to assist employers in fostering inclusive workplaces that support neurodiversity, including conditions like ADHD, autism, dyslexia, and dyspraxia. Julie Dennis, head of inclusive workplaces at Acas, highlighted the need for a supportive environment, stating: “Employees may not want to tell people that they are neurodiverse or may mask their condition due to concerns about a negative reaction at work.” Sir Stephen Timms, Minister for Social Security and Disability, stressed the importance of open dialogue, noting that “having conversations about health conditions and adjustments is the first step to fostering a healthy workplace.” Ruth Wilkinson from the Institution of Occupational Health and Safety called for a cultural shift, insisting that businesses must create environments that allow neurodiverse individuals to thrive.
Tony Blair continues with push for Digital ID
Sir Tony Blair is calling on Sir Keir Starmer’s government to roll out Digital ID and introduce live facial recognition across the country. This, the former Labour PM claims, would improve efficiency and have a dramatic impact on crime. Moreover, this would undercut the rationale for populist movements in Britain as grievances about illegal immigration, crime and benefit fraud would be greatly resolved. AI could also be used to streamline processes in the legal system while tracking and tagging technologies could help solve the overcrowding problem in prisons. Blair was speaking with Rachel Sylvester at The Times Crime and Justice Commission in the London office of his Institute for Global Change.
Alcohol prices set to soar
Consumers will face increased alcohol prices from today when a hike in tax and duties comes into effect. A bottle of gin will see a rise of 32p, while wine at 14.5% ABV will increase by 54p. The new tax system, which aligns with the Retail Price Index at 3.6%, will impose higher duties based on alcohol strength. Miles Beale, chief executive of the Wine and Spirit Trade Association, stated: “There are no winners under the UK’s punishing alcohol tax regime – higher duty rates mean people buy less which results in reduced income to the Exchequer.” Additionally, new waste packaging taxes will further inflate prices, with an expected increase of 12p for wine and 18p for spirits. However, a slight relief comes from a 1.7% cut in duty on draught products, equating to a penny off a pint in pubs.
AstraZeneca pulls £450m investment
AstraZeneca has cancelled its planned £450m investment in a vaccine manufacturing plant in Merseyside, citing the Labour Government’s failure to match the previous Government’s support offer. Under the Tories, around £70m was on offer in grants, as well as £20m in research and development support from the UK Health Security Agency. An AstraZeneca spokesperson said: “Following discussions with the current Government, we are no longer pursuing our planned investment in Speke. Several factors have influenced this decision including the timing and reduction of the final offer compared to the previous Government’s proposal.” Despite the cancellation, the existing facility will continue to operate without job losses.
Taxpayers face further £67m Fujitsu bill
Lord Arbuthnot, a campaigner for wrongly convicted sub postmasters, has expressed concern over the UK Government’s decision to extend Fujitsu’s contract to run its Trader Support Service (TSS), stating it sends a message that the country “doesn’t care about the unethical behaviour shown by Fujitsu in the Post Office scandal.” The extension, worth £66.8m, was granted by HMRC to continue the TSS, which assists businesses with post-Brexit trading. Despite Fujitsu’s previous withdrawal from bidding for government contracts, HMRC justified the extension as necessary for stabilisation during the transition to new trading arrangements.
Barclays resolves major IT glitch
Barclays has announced that a significant IT glitch, which left numerous customers unable to access their accounts for three days, has now been resolved. The bank confirmed that the “technical issue” first reported on Friday has been fixed, and delayed payments are being processed. In a statement, Barclays said: “We are very sorry for any disruption and will ensure that no impacted customer is left out of pocket.” The glitch is not suspected to be linked to any cyber attack or malicious activity.
HMRC won’t fine taxpayers affected by Barclays outage
HMRC has assured customers affected by the Barclays Bank outage that they will not incur fines for late tax payments due to the IT glitch. The outage, which began on Friday, prevented many customers from accessing their accounts and making payments, coinciding with the self-assessment tax return deadline. Customers are advised that their reasons for late payments will be considered individually, and those with a reasonable excuse may avoid penalties. Barclays has acknowledged the ongoing technical issues and is working to resolve them, ensuring that “no impacted customer is left out of pocket.”
Latest Insolvencies
Petitions to wind up (Companies) – SSG HOSPITALITY MANAGEMENT (UK) LIMITED
Appointment of Administrator – JD CLASSICS AUTOS LTD
Appointment of Administrator – WARING & CO LEGAL LTD
Appointment of Liquidators – ADVANCED COMPOSITES GROUP INVESTMENTS LIMITED
Appointment of Liquidators – LAWRENCE MANN ASSOCIATES LIMITED
Appointment of Liquidators – NOVOGATE CONCEPTS LIMITED
Appointment of Liquidators – TSM GROUP LTD
Appointment of Liquidators – DESIGN TEST AND BUILD LIMITED
Appointment of Liquidators – COMMERCIAL PROPERTY SURVEYS LIMITED
Appointment of Liquidators – JAMES WADE HOMES LTD
Appointment of Liquidators – EDMUNDS & CLARKE FURNITURE LIMITED
Appointment of Liquidators – MARTINI CONSULTING LIMITED
Appointment of Liquidators – JOHN MASCALL LTD
Appointment of Liquidators – TELANO LIMITED
Petitions to wind up (Companies) – GILL ASSOCIATES LTD
Appointment of Liquidators – BARRY DICKER LTD
Appointment of Liquidators – RECRUIT GLOBAL TREASURY SERVICES LTD
Winding up Order (Companies) – WELLINGTON GIFTS LIMITED
Appointment of Liquidators – DARK MATRIX LTD
Appointment of Liquidators – BRADLEYS SURFACING SYSTEMS LIMITED
Petitions to wind up (Companies) – JOHNY’S COMPANY UK LIMITED
Petitions to wind up (Companies) – POLMAISE INVESTMENTS LIMITED
Petitions to wind up (Companies) – SF OPS LTD
Petitions to wind up (Companies) – DMA PARTNERSHIP LIMITED
Petitions to wind up (Companies) – FRIARS CARSE COUNTRY HOUSE HOTEL LIMITED
Appointment of Liquidators – SALISTE LIMITED
Appointment of Liquidators – MACAULEY HEANEY PARTNERSHIP LIMITED
Appointment of Administrator – HALO (BELFAST) REALISATIONS LIMITED
Petitions to wind up (Companies) – PSDG INTERNATIONAL LTD
Petitions to wind up (Companies) – HAZAQ SOLUTIONS LTD
Petitions to wind up (Companies) – A&A CONTRACT SERVICES LTD
Petitions to wind up (Companies) – 91 TO 97 BROAD STREET DEVCO LIMITED
Petitions to wind up (Companies) – HERTFORD REALTY LTD
Petitions to wind up (Companies) – ZENITH PARTNERS LIMITED
Petitions to wind up (Companies) – LOMBARDY DEVELOPMENT LTD
Petitions to wind up (Companies) – RICHTER ASSOCIATES (WARRINGTON) LIMITED
Petitions to wind up (Companies) – FARRINGDON PUB LIMITED
Petitions to wind up (Companies) – PARMARBROOK LIMITED
Petitions to wind up (Companies) – PRONTO JOINERY LIMITED
Petitions to wind up (Companies) – PRO-FIT WINDOW SYSTEMS LTD
Petitions to wind up (Companies) – MAGRADA LTD
Petitions to wind up (Companies) – STATION HOUSE DAY NURSERY LIMITED
Petitions to wind up (Companies) – CARE4U HEALTH CARE LIMITED
Petitions to wind up (Companies) – MICHELLE’S MINI GARDEN CENTRE LIMITED
Petitions to wind up (Companies) – PORT SHIPPING LTD
Petitions to wind up (Companies) – UK TOOLS DIRECT LIMITED
Petitions to wind up (Companies) – NEW BLACK SERVICES LTD
Petitions to wind up (Companies) – MAYFAIR ST. JAMES LIMITED
Petitions to wind up (Companies) – ZIEN X LTD
Petitions to wind up (Companies) – AIRPORT RESPONSE LTD
Petitions to wind up (Companies) – GREAT MINDS TOGETHER FICS C.I.C.
Appointment of Liquidators – RS IT TECH LTD
Appointment of Liquidators – ARIA PROJECT MANAGEMENT LIMITED
Appointment of Liquidators – ENERGY 4 IMPACT
Petitions to wind up (Companies) – THE COACH HOUSE HUMBERSTON LIMITED
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!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.