Business news 6 February 2024
Insolvencies forecast to hit 33,000 in 2024. UK firms suffer second-highest level of financial distress in Europe. Fraud, unemployment, services, retail & more business news that we thought would interest our members.
James Salmon, Operations Director.
Insolvencies forecast to hit 33,000 in 2024
Corporate insolvencies in 2024 could surpass last year’s thirty-year high, with forecasts suggesting over 8,000 insolvencies per quarter. The Centre for Economics and Business Research (CEBR) raised its previous forecast of 7,000 per quarter after new figures revealed nearly 6,800 insolvencies in the final quarter of last year.
The total number of insolvencies in 2023 reached 25,000, the highest in three decades. CEBR warns that struggling businesses will face further challenges before improvement, as the relationship between the economy and financially troubled companies lags by about 18 months.
UK firms suffer second-highest level of financial distress in Europe
UK companies are experiencing the second-highest levels of financial distress in Europe, with German firms leading the way, according to the Weil European Distress Index. Poor profit-making is the biggest cause of business trouble throughout the continent. Andrew Wilkinson of Weil’s London office highlights investment hesitancy, rising costs, and high leverage as vulnerabilities in the market. UK retailers continue to face pressure due to challenging trading, lack of consumer spending, and pricing issues.
Prosecutions lagging behind UK’s growing ‘fraud epidemic’
The UK Government has been urged to do more to crack down on fraud after new data showed the number of high-value criminal cases reaching the courts has stayed flat despite a sharp rise in fraud. UK crown courts heard 226 fraud cases last year compared with 221 in 2022, according to new figures from KPMG’s Fraud Barometer. The total value of last year’s cases was £993m, down from £1.1bn in 2022.
According to the latest figures from the Home Office, fraud now accounts for more than 40% of all crime in England and Wales. “The timely prosecution of economic crime remains a challenge, so in the context of rising fraud rates, it is disappointing to see little change in the number of high-value fraud cases being heard in UK crown courts,” said Roy Waligora, partner and head of UK investigations at KPMG.
KPMG’s data also showed the Government was the biggest victim in last year’s fraud cases, losing £593m, while the commercial business and investment sectors suffered hits of £165m and £122m, respectively. Susan Hawley, executive director of campaign group Spotlight on Corruption, said fraud prosecutions “are still nowhere near the levels needed to tackle Britain’s fraud epidemic”.
UK unemployment rate revised down to 3.9% in November
The Office for National Statistics (ONS) has revised the UK unemployment rate down to 3.9% for the three months to November, lower than the previous estimate of 4.2%.
The ONS also revised the inactivity rate up to 21.9% for the same period, from 20.8%. The inactivity rate has been driven higher by long-term sickness and waiting lists for treatment, with 2.8m people now suffering from chronic health conditions compared to a first estimate of 2.6m.
The revisions were made due to an overhaul of the ONS labour force survey, which had low responses and therefore unreliable data. The changes are largely due to changes in the population structure, with increases in the number of economically inactive young people and women, and a decline in female employment levels. The ONS is working on making the figures more accurate and will soon launch a revamped labour force survey.
UK services sector growth jumps
The UK’s services sector experienced a solid increase in business activity last month, according to a survey by S&P Global, with the services purchasing managers’ index (PMI) rising to 54.3 in January. This indicates growth in the sector for the past three months. Improved economic conditions and increased sentiment at the start of the year contributed to this strong performance. Job creation also saw a significant rise, with the fastest rate since July. However, wage growth constraints and cost-of-living pressures impacted hiring.
Despite this, total new work and export sales increased, supported by stronger demand from Asia and the US. Business optimism reached its highest level since May, reflecting expectations of better economic conditions. This positive services data contrasts with the weaker manufacturing PMI, which was affected by the Red Sea shipping crisis.
OECD says UK inflation will be lower than thought
The Organisation for Economic Co-operation and Development (OECD) has revised down its predictions for UK inflation, but the country is still expected to have the highest inflation among G7 economies in 2024 and 2025. The UK’s inflation is forecasted to average 2.8% in 2024 and 2.4% in 2025, surpassing other G7 countries. The OECD also highlighted global inflation risks due to geopolitical tensions and disruption to Red Sea shipping. It suggested that central banks could start lowering interest rates in 2024, but cautioned about the need for prudent monetary policy. The UK’s growth forecasts are gloomy, with the country expected to have one of the weakest expansions among G7 countries. Germany is predicted to have the weakest expansion, followed by France, the UK, and Italy.
Retail Sales growth slowed in January
Retail sales growth slowed last month amid cost of living crisis, poor weather and rail strikes. Total sales rose by 1.2% in January compared with a year earlier (growth in Jan 23 was 4.2%), below the annual average growth rate of 3.4%. “While there are some positive signs that mortgage rates are starting to fall and stabilise, and shop inflation has fallen to its lowest level in over a year, the feelgood factor has yet to materialise at the tills,” said Linda Ellett, UK head of consumer markets, leisure and retail at KPMG.
Tourist tax review
UK Chancellor of the Exchequer Jeremy Hunt has reportedly asked the Office for Budget Responsibility to review bringing back VAT-free shopping for international visitors. The UK at the start of 2021 scrapped VAT-free shopping in an effort to boost government coffers, but the move has caused complaints by British businesses that say they have been put at a disadvantage compared to international peers. The OBR Chair Richard Hughes has been asked to mull “the costs and benefits” of the so-called ‘tourist tax’.
Planning rules cost UK economy £130bn per year
Rishi Sunak has been urged to allow denser development in built-up areas to help people get on the housing ladder. A report by the Adam Smith Institute reveals that planning rules cost the UK economy more than £130bn per year. The report estimates that restrictions on height, width, and density have resulted in a loss of up to 6.1% of GDP, equivalent to £138.5bn. Sir Brandon Lewis, the former housing minister, urged the Conservative Party to implement the reforms to boost economic growth.
UK state pension age may have to rise to 71, experts say
The retirement age in the UK may have to rise to 71 due to the impact of increasing life expectancy and falling birthrates on the state pension. Research by the International Longevity Centre suggests that workers born after April 1970 may have to work until they are 71 before claiming their pension. Preventable ill health is a major factor contributing to workers exiting the workforce before reaching state pension age. Experts warn that the retirement age may need to be set even higher to maintain the number of workers per state pensioner. According to the Office for Budget Responsibility, pensioner benefits will cost the UK government £136bn in 2023-24, of which £124bn will be spent on state pensions.
Jonathan Cribb, associate director and head of retirement at the Institute for Fiscal Studies, said increasing the pension age without addressing other cost-saving measures was not “realistic or equitable” adding: “It would disproportionately impact poorer individuals whose ill-health means they have shorter lives, and so who receive pensions for less time.”
Electric van maker Arrival collapses into administration
The British electric van maker Arrival, once valued at $13bn (£10bn), has gone into administration after having spent $1.5bn without having sold a vehicle. The company had been seeking a potential sale or investment but EY were appointed administrators of its two UK entities, which own its key assets, on Monday.
Latest Insolvencies
Appointment of Administrator – NOURISH TRAINING LTD
Petitions to wind up (Companies) – KMRL888 LTD
Appointment of Liquidators – RTG ASSOCIATES LIMITED
Appointment of Liquidators – EDGE AND FLOW LTD
Petitions to wind up (Companies) – WAREHOUSE CLEARANCE OUTLET LTD
Petitions to wind up (Companies) – HEGARTY CARE LIMITED
Appointment of Liquidators – RELTA INVESTMENT HOLDINGS LIMITED
Petitions to wind up (Companies) – DFSI M25 LTD
Appointment of Liquidators – GARY BERRYMAN TRANSPORT LTD
Appointment of Liquidators – DANIELS LIMITED
Petitions to wind up (Companies) – PRIMEXT LIMITED
Petitions to wind up (Companies) – LONDON HEIGHTS INTERNATIONAL LTD
Appointment of Liquidators – RAPPORT HOUSING AND CARE
Appointment of Administrator – A1 COMMS LIMITED
Appointment of Liquidators – RELTA PROPERTIES LIMITED
Appointment of Liquidators – CRYSTAL NURSING SERVICES LIMITED
Appointment of Liquidators – TAYLOR FRY INVESTMENTS LIMITED
Petitions to wind up (Companies) – ANTONINE ESTATES LTD.
Appointment of Liquidators – DYLON 2 HOLDINGS LIMITED
Appointment of Liquidators – RELTA LIMITED
Appointment of Administrator – WINCANTON DIGITAL PRINT LIMITED
Appointment of Liquidators – FORM LONDON LIMITED
Appointment of Liquidators – DERIVATIVES DOCUMENTATION LIMITED
Appointment of Administrator – MEDIC MENTOR LTD
Appointment of Liquidators – LUCY’S DRESSINGS LTD
Appointment of Administrator – REDI CITY LTD
Appointment of Administrator – GWYNEDD SHIPPING LOGISTICS LIMITED
Appointment of Liquidators – DAVID A. WHITELAW LTD
Petitions to wind up (Companies) – CAPITAL FURNITURE LIMITED
Petitions to wind up (Companies) – THE TOBY JUG (RUBERY) LIMITED
Appointment of Liquidators – CARDELL CONSULTING LIMITED
Appointment of Liquidators – THE DRUM GROUP LIMITED
Petitions to wind up (Companies) – ALBION DUKINFIELD LIMITED
Appointment of Liquidators – DMG ADVISORY LTD
Appointment of Liquidators – STRAND COURT PROPERTIES LIMITED
Appointment of Liquidators – WILLIAMS ENVIRONMENTAL MANAGEMENT LIMITED
Appointment of Administrator – OLLIE QUINN UK LIMITED
Petitions to wind up (Companies) – THE STEAM INN MALLAIG LIMITED
Appointment of Liquidators – THE GOOD EXCHANGE LIMITED
Appointment of Liquidators – O E M LIGHTING LIMITED
Petitions to wind up (Companies) – YOUR HOME CARE SERVICES LTD
Appointment of Liquidators – HSTS CONSULTING AND DEVELOPMENT LTD.
Appointment of Liquidators – SOUTHERN CONSERVATORIES (SW) LTD
Appointment of Liquidators – SUNIL KHANNA LIMITED
Winding up Order (Companies) – DIXON CONSTRUCTION COMPANY (SW) LTD
Appointment of Liquidators – M S O PROPERTIES LIMITED
Appointment of Liquidators – ANVI CONSULTING LIMITED
Appointment of Administrator – THE RED BOAT (ICE CREAM PARLOUR) LIMITED
Appointment of Liquidators – GOGGINS ENTERPRISES LIMITED
Appointment of Administrator – HRH HILL LTD
Appointment of Administrator – HIGHLIGHT GREEN ACRES LIMITED
Petitions to wind up (Companies) – QUALI SOLUTIONS LTD
Appointment of Liquidators – GREENHAM COMMON TRADING LIMITED
Appointment of Liquidators – SIDE LABS LIMITED
Appointment of Liquidators – AMBROSIA CONSULTANTS LIMITED
Petitions to wind up (Companies) – ALI HALAL MEAT AND FISH LIMITED
Appointment of Liquidators – THRUSSENDALE FARM LIMITED
Appointment of Liquidators – WENALLT FARM 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 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 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!
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Check our compensation calculator to see how much your business could be owed!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.