Business news 3 December 2024
Bosses lack confidence in the Government. Festive shopping season starts slow. Minister refuses to commit to growth pledge. House prices, manufacturing, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Bosses lack confidence in the Government
Just one in four business leaders has confidence in the Government to deliver economic growth, according to a poll by the London Chamber of Commerce and Industry (LCCI). While 81% said they were not confident that ministers will address concerns from businesses, 77% declared a lack of confidence in the Government delivering on a commitment to grow the economy. The poll also shows that 78% of respondents said increased National Insurance contributions will have a negative impact on their firm. Around 4 in 10 (38%) said changes in the Employment Rights Bill will mean a hiring freeze, while 16% fear it will lead to redundancies. LCCI chief executive Karim Fatehi said: “This snap survey has confirmed our worst fears; the business community views the combined package of increased employer NICs, cuts to business rates relief and the employment rights bill as a serious threat to their operations.”
Festive shopping season starts slow
The festive shopping season has begun sluggishly, with consumers reducing food spending and waiting for Black Friday and Christmas sales. Barclays reported a 0.5% drop in card spending in November, the first decline since July, while the British Retail Consortium (BRC) and KPMG noted a 3.3% fall in retail sales. Helen Dickinson, chief executive of the BRC, said: “While it was undoubtedly a bad start to the festive season, the poor spending figures were primarily down to the movement of Black Friday into the December figures this year.” Factors such as rising energy bills, low consumer confidence, and colder weather have contributed to the downturn. Elsewhere, analysis by BDO shows that high street sales fell 5.8% in November compared to last year. Online sales fell 7.8% while in-store sales dropped 5.5%. Sophie Michael, head of retail and wholesale at BDO, said retailers “will face an even tougher first quarter in 2025 should this sales trajectory continue into the final weeks of this year.”
Minister refuses to commit to growth pledge
Labour is facing questions over its plan to deliver economic growth after Building Safety Minister Alex Norris refused to commit to the election pledge. As part of its manifesto, Labour announced five key missions, including a pledge to kickstart economic growth. However, in an interview with Times Radio, Mr Norris refused to comment on speculation that Sir Keir Starmer plans to sideline a pledge to become the fastest growing economy in the G7. He insisted, however, that Labour “made clear principles at the election about what we want to see in this country” and is “going to work to deliver them.” A Downing Street spokesperson later insisted that growth is the Government’s “number one priority.”
Markets
Yesterday, London markets lacked direction as December trading kicked off, with mixed fortunes elsewhere in Europe. The FTSE 100 closed up 0.31% at 8312.89 and the Euro Stoxx 50 closed up 0.88% at 4846.73. Overnight in the US the S&P 500 rose 0.24% to 6047.15 and the NASDAQ rose 0.97% to 19403.95.
US stocks rallied, led by tech megacaps Microsoft, Meta, and Apple, which closed at an all-time high. The S&P 500 notched its 54th closing record this year.
Housebuilders Vistry, Persimmon and Taylor Wimpey fell yesterday after reports emerged that the industry could be hit by new taxes. A new £3 billion tax could be about to hit the housebuilding sector, the Sunday Times reported.
This morning on currencies, the pound is currently worth $1.267 and €1.205. On Commodities, Oil (Brent) is at $72.45 & Gold is at $2643 On the stock markets, the FTSE 100 is currently up 0.66% at 8368 and the Eurostoxx 50 is up 0.64% at 4878.
House prices jump 3.7%
Data from Nationwide shows that house prices increased by 3.7% in November, with this the fastest year-on-year increase for two years. On a monthly basis, house prices rose by 1.2% between October and November, with this the biggest month-on-month increase since March 2022. The increase seen in November took the average property price to £268,144. Robert Gardner, Nationwide’s chief economist, said: “The acceleration in house price growth is surprising, since affordability remains stretched by historic standards.”
Manufacturers see demand slump
Europe’s manufacturing sector is grappling with a significant decline in demand, with “no sign of a recovery” in sight, according to Dr Cyrus de la Rubia, chief economist at Hamburg Commercial Bank. The S&P Global purchasing managers’ index (PMI) for the eurozone fell to 45.2 in November, with a reading below 50 indicating contraction, with France, Germany, and Austria particularly affected. The UK also faced challenges, with its PMI dropping to a nine-month low of 48, as factory owners cut jobs and investment. The situation has been exacerbated by Brexit-related border checks and rising costs from measures set out in the Budget. Rob Dobson from S&P Global noted that geopolitical tensions and supply chain disruptions have created an environment of “high costs, low demand and raised uncertainty” for manufacturers. The outlook remains bleak, with analysts warning of continued difficulties ahead.
NI hike threatens Christmas jobs
There are concerns that the recent increase in National Insurance for employers has contributed to a significant decline in part-time job vacancies for the festive season. According to Adzuna, the number of Christmas roles advertised has dropped by over 30%, from 31,843 in November 2021 to just 21,576 this year. Simon Thomas, managing director of Ridgefield Consulting, said businesses “are finding it increasingly difficult to justify the hiring of temporary staff during peak periods,” adding: “Consequently, many are choosing to reduce the number of new hires or cut back on the working hours of temporary employees.”
AIM boss calls for tax certainty
Marcus Stuttard, the head of London’s AIM market, has urged ministers to rule out further tax increases after October’s Budget halved inheritance tax relief on shares in the junior market from 100% to 50%. Mr Stuttard said: “The market is looking for some certainty from government that there will be no further changes to business relief.” Analysts from Peel Hunt have warned that the tax cuts could cost the Treasury more than £2bn due to reduced capital gains tax from falling share values. AIM companies contribute significantly to the UK economy, contributing £35.7bn to UK GDP and supporting more than 410,000 jobs, according to Grant Thornton. It is noted that while AIM is down by nearly 10% over the past six months, the FTSE 100 is roughly flat over the same period. Meanwhile, the Lord Mayor of London, Alastair King, has called for the abolition of stamp duty on UK shares to deliver a “shot in the arm for homegrown companies.”
IHT raid threatens family firms
Labour’s proposed changes to inheritance tax are set to have a devastating impact on family-run businesses and farms, with an estimated 125,678 job losses over the next five years. According to CBI Economics, the introduction of death duties on family-owned firms could reduce economic activity by £9.4bn, resulting in a £1.3bn loss for the Treasury by 2030. A survey revealed that one in five family firms plans to take action to mitigate the new 20% tax on assets exceeding £1m, with 15% considering selling their businesses entirely. Neil Davy, chief executive of Family Business UK, said: “Changes to Business Property Relief announced in the Budget will fundamentally remove incentives among owners of family firms to invest in their businesses, and in many cases threaten their viability.” Warning that the CBI Economics research suggests that there will be a negative impact on jobs, investment, and tax receipts into the Treasury, Mr Davy added: “Downsizing of businesses, asset disposures, complete sale or liquidation are very real unintended consequences of this policy.”
Low earners less likely to share parental leave
Analysis of the Government’s shared parental leave scheme suggests that uptake is less likely among lower earners, with campaign group The Dad Shift saying the initiative is “failing working families.” Shared parental leave is a state-funded scheme that allows parents to share up to 50 weeks of leave and up to 37 weeks of pay after the birth or adoption of a child. Analysis of HMRC data by The Dad Shift shows that the top 20% of earners make up 60% of those to use shared parental leave, while just 5% of those who took up shared parental leave came from the bottom 50% of earners. A review conducted in 2023 shows that 45% of fathers were unaware that shared parental leave was an option, with it also shown that it was used in fewer than 2% of all births last year.
Super Micro clears leadership of fraud
Super Micro Computer has announced that a review committee found no evidence of fraud or misconduct among its leadership. The investigation, which began after concerns were raised by the tech firm’s public accounting firm regarding transparency and internal controls, concluded that “the conclusions EY laid out in its resignation were not supported by the facts.” Consequently, Super Micro does not anticipate restating past financial reports. The company is also in the process of appointing new executives, including a chief financial officer, while Kenneth Cheung has been appointed as chief accounting officer. EY resigned as Super Micro’s public accountant in October, with BDO taking over.
Ashley targets HMRC in court claim
Retail tycoon Mike Ashley is embroiled in a legal dispute with HMRC over a £13.6m tax bill on an £88m property transfer. Mr Ashley has also accused the tax office of “egregious” breaches of data protection legislation. During a High Court hearing, Mr Ashley’s barrister, Anya Proops KC, claims that that the Frasers Group owner was met with a “complete stone wall” from the tax office when he requested personal data linked to the inquiry. Despite HMRC acknowledging some breaches, they argue that not all data requested falls under Mr Ashley’s personal information.
Wormald to lead civil service
Sir Chris Wormald has been named Cabinet Secretary and will replace Simon Case as head of the UK’s civil service. Sir Chris, who has led the Department for Health and Social Care since 2016, will be in charge of delivering the Government’s agenda and managing the permanent secretaries who lead departments. Prime Minister Sir Keir Starmer said delivering the Government’s priorities would mean “re-wiring” the British state to deliver reform.
ECB should focus on future risks for policy decisions
Philip Lane, the European Central Bank’s (ECB) chief economist, says the bank should make monetary policy decisions based on upcoming risk, rather than the latest economic data. He said: “I think monetary policy needs to be essentially forward-looking, and to be scanning the horizon for what are the new shocks that might lead to less or more inflation pressure.” Looking ahead, Mr Lane said that at “some point”, officials will transition from being driven by the “very important disinflation challenge” to focus on keeping inflation at the ECB’s 2% target “on a sustainable basis.”
Counselling charity faces insolvency
Relate, Britain’s largest relationships counselling charity, is facing insolvency due to a significant drop in funding from from NHS and local authority contracts. The charity has entered administration, with staff informed they have four to six weeks to secure a buyer or merger partner. Approximately 80 employees, including 40 counsellors, have been made redundant, raising concerns about the impact on clients. Phil Reynolds from FRP Advisory said: “We’re exploring a number of options for the central support organisation.”
Collapse concern for office space start-up
Second Home, an office space start-up founded in 2014, is reportedly preparing to appoint administrators due to ongoing financial difficulties. The company, which operates in London, Lisbon, and Los Angeles, has struggled to manage costs and has seen a significant drop in revenues following the pandemic and the shift towards remote work. Restructuring experts from FRP Advisory, who previously assisted with Second Home’s recapitalisation in 2022, are expected to provide guidance on the potential administration.
Latest Insolvencies
Petitions to wind up (Companies) – LL EUROPE LTD
Petitions to wind up (Companies) – ANACONDA CAPITAL LIMITED
Petitions to wind up (Companies) – FODAL BRIXTON LIMITED
Appointment of Administrator – COGNITIVE PUBLISHING LIMITED
Appointment of Liquidators – STEELCAD DETAILING LIMITED
Appointment of Liquidators – TOPSORT LIMITED
Appointment of Liquidators – PRICE CORP LTD
Appointment of Liquidators – JANE KELLY HOLDINGS LIMITED
Appointment of Liquidators – GARC CONSULTING LIMITED
Appointment of Liquidators – BETTER CLOUD SOLUTIONS LTD
Appointment of Liquidators – SUDELEY INVESTMENTS LIMITED
Appointment of Liquidators – TESSELLATE TRIANGLE LIMITED
Appointment of Liquidators – CLOUDQAIT LIMITED
Appointment of Liquidators – EXCEL SOFTWARE SERVICES LTD
Appointment of Liquidators – NEXX (UK) LIMITED
Appointment of Liquidators – BEECH BROTHERS LIMITED
Petitions to wind up (Companies) – GSK WHOLESALE LIMITED
Petitions to wind up (Companies) – SEVEN SEAS EXPORTS S.L LTD
Appointment of Administrator – CALEDONIAN LOGISTICS LIMITED
Petitions to wind up (Companies) – TECHNOLOGY SPARE PARTS LIMITED
Petitions to wind up (Companies) – SKYROCKET ENTERTAINMENT LIMITED
Petitions to wind up (Companies) – W. H. COX & SON (REMOVALS & STORAGE) LTD
Petitions to wind up (Companies) – MUCK AWAY GROUP LTD
Petitions to wind up (Companies) – V.P. CIVILS LIMITED
Petitions to wind up (Companies) – THE BRIT GIFTS LIMITED
Appointment of Liquidators – AURORA MANAGEMENT SERVICES LIMITED
Appointment of Administrator – CRAIGIE’S FARM LIMITED
Appointment of Liquidators – JM PHILLIPS LIMITED
Appointment of Liquidators – PET FOOD (UK) IP LIMITED
Appointment of Liquidators – AVANT HOMES (GALLIONS APPROACH) 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.