Business news 3 March 2023
James Salmon, Operations Director.
Soaring inflation forces over-50s back to work. Hundreds of banking hubs expected to replace closed branches. Interest rates. Arm shuns London. And more business news.
Soaring inflation forces over-50s back to work
New analysis by the Institute for Fiscal Studies (IFS) reveals the number of 50 to 64-year-olds preparing to get back to work rose sharply in the final three months of 2022, as soaring inflation forced people to rethink whether they can afford to retire. Xiaowei Xu and David Sturrock, economists at the IFS, said the data could be an early indicator of “a wave of ‘unretirements’.” But Ms Xu added: “If the return is triggered by the cost of living crisis, it is no cause for wider celebration – it is a response to people becoming poorer.”
Hundreds of banking hubs expected to replace closed branches
The boss of Cash Access UK has said UK lenders will open hundreds of banking hubs over the next few years as the programme accelerates. Gareth Oakley points out that the not-for-profit company has 38 hubs in the pipeline and is preparing to open its fifth and sixth hubs in London and Scotland. The hubs are designed to provide basic banking services for communities that have lost bank and building society branches and lenders are under pressure from forthcoming legislation and the Financial Conduct Authority to ensure the public has access to cash services. Mr Oakley explained: “If banks were to continue closing branches at the current rate I would expect there to be several hundred banking hubs and maybe as many deposit solutions.” Martin McTague, national chairman of the Federation of Small Businesses, said the hubs were a positive development. “Over eight in ten small businesses say that bank branches are important to the health of their high street and over a third report that footfall dropped following branch closures.”
Interest rates
Michael Saunders has said it’s now time for BOE to reduce the rate of interest rate hikes. As one of the most hawkish Bank of England policy makers until he finished his term in August, Michael Saunders says he would now vote to soften the pace of interest rate increases, backing a quarter-point rise in the key rate to 4.25%, half the rate of the recent half-point rises. However, pay pressure is keeping the pressure on rates. Bank of England Chief Economist Huw Pill said the UK economy has proved “slightly stronger than expected” over the past month and wage growth stickier than thought.
Arm shuns London
In a disappointing move for the UK, UK tech darling Arm has opted to list in the US rather than the UK, as the cited uncertainty over the UK’s long term tech strategy. Arm is looking at a valuation between $30 billion and $70 billion.
CRH to switch listing from London to US
Building materials company CRH is planning to move its main share listing from the UK to the US. The Ireland-based firm explained the move by pointing out that North America now accounted for about three-quarters of its earnings and was likely to be “a key driver of future growth”. Responding to CRH’s plans, the head of the London Stock Exchange Group insisted that London was “the most international financial centre in the world” and was continuing to attract companies and investors. If some London-listed companies with large US operations chose to shift their listings to America, “that is what it is”, he said.
Offshore energy industry calls for support
Windfall taxes on the oil and gas sector plus a windfall tax on electricity generators “have significantly undermined the appetite of companies and international investors to invest in the UK,” according to Mike Tholen, director of sustainability at Offshore Energies UK. In order to compete successfully with the US, China and the EU, the UK’s North Sea industry body says Jeremy Hunt, the Chancellor, needs “to create an attractive environment supported by intelligent policies to deliver long-term investment across the whole energy landscape.”
Johnson calls on Sunak to cut corporation tax to “Irish levels”
Boris Johnson has joined a chorus of voices urging Rishi Sunak to halt his plans to hike corporation tax. He told the Global Soft Power Summit: “There’s no point now in just emulating the high-tax, high-spend, low-growth European model.” The former PM added: “We should think not about raising corporation tax but cutting corporation tax to Irish levels or lower and really turbocharging investment to drive levelling up across the whole country, really showing the world what they wanted to see from 2016 onwards…That we are different now, because this is a Brexit government or this is nothing.” Mr Sunak is expected to increase the levy from 19% to 25% in next month’s Budget and Mr Johnson’s challenge to the policy follows pleas from three former Tory chancellors and numerous business leaders for the tax hike to be scrapped.
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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.