business news 6 April 2021.

James Salmon, Operations Director.

Here a collection of business news stories that we have seen over the long bank holiday weekend  that we thought might interest our members and visitors.

Recovery Loan Scheme

The U.K.’s Recovery Loan Scheme starts tomorrow, offering loans of as much as 10 million pounds to businesses, the Treasury said.

The government is providing an 80% guarantee for all loans, and interest rates have been capped at 14.99% — though they’re expected to be much lower in most cases. The program runs until the end of the year and replaces various emergency-loan ones that have distributed more than 75 billion pounds since the pandemic began.

Pandemic hits entrepreneurs’ wellbeing

A study by personal finance firm NerdWallet has revealed the personal toll the pandemic has taken on small business leaders. A poll of almost 1,000 entrepreneurs shows that more than a third have sought professional help for their mental health since the start of the lockdown, while half of respondents described the past year as the most stressful of their careers. While 47% said furloughing staff and making redundancies had taken a negative toll on their mental wellbeing, 52% said work stress had driven a deterioration in personal relationships and 49% said they felt isolated and alone.

3m workers could see a four-day week

More than a million British companies could transition to a four-day working week in the aftermath of the pandemic, a move that could change the shape of the working week for 3m workers. A survey by charity Be The Business saw 18% of firms say they are considering the idea, while a study by think-tank Autonomy shows that 300,000 SMEs have already made the switch. Director of research at Autonomy Will Stronge said a four-day working week can bring “huge benefits to workers’ mental health, which directly feeds into firm performance”. He added: “All the evidence shows that moving to a four-day week is a win-win for both employers and workers – and this is why we’re seeing increasing adoption across sectors.” Elsewhere, London Chamber of Commerce research shows that almost two-thirds of employers have allowed staff to work from home at least two days a week as a result of the coronavirus crisis.

Wage increase welcomed

SMEs have welcomed an increase in the national living wage, with the rate rising from £8.72 to £8.91 per hour for employees over the age of 23 as of yesterday. However, some firms have voiced concern over the impact of the increase on their wage bill. Jane Gratton, the head of people policy at the British Chambers of Commerce, comments: “As the economy begins to reopen after lockdown, the Government must do all it can to help firms drive up productivity through investment in people and innovation while also reducing the upfront costs of doing business.”

Spending set to surge as confidence climbs

The UK could be set to see a surge in spending as consumer confidence hits its highest level since before the 2008 financial crisis. A poll of 2,067 people by PwC has revealed pent up demand for activities including shopping and eating out could see people splashing their cash, post-lockdown. Older age groups are driving the climb in consumer optimism, having seen the least financial damage from the pandemic, with more than a quarter of over-65s having saved money in the last year. The PwC report says consumers are set to spend across all sectors of the economy in the coming months, with uncertainty over international travel making outlay on foreign holidays the one exception. PwC’s Lisa Hooker said: “After a tough year there is now a real sense of anticipation as consumers eagerly await the reopening of non-essential retail, hospitality and leisure.” “Forced savings during lockdown have led to record levels of optimism”, she added.

Strong PMI read

Strong UK manufacturing data and PMI (purchasing managers index) helped sustain the view the UK economy can recover. The PMI read at 58.9 in March from 55.1 in February was impressive.

UK Manufacturing Activity grew sharply in March as business optimism hit a seven-year high and vaccine rollouts buoyed the industry, according to new data. The UK Manufacturing Purchasing Managers’ Index rose to 58.9% last month, marking the highest reading in just over a decade. The index leaped from last month’s 55.1 and outperformed a forecast of 57.9. Anything above 50 is seen as a sector in growth.

North South divide in recovery potential

Analysis by savings platform Raisin UK has identified the local economies which are likely to see the fastest recovery from the coronavirus pandemic, highlighting that there is a “clear divide” between the North and South. The report show that the 10 strongest economies are all in the South of the UK, with Tewkesbury in Gloucestershire coming out top, followed by Winchester in Hampshire, with Bristol third. The table was based on the number of large businesses, business survival rate, birth and death rates, the proportion of people in employment, the amount of the population receiving income support and the average government spend per head.

Poor spending controls cost firms £37bn

A new study has found UK businesses lose around £37bn a year through poor business spending controls, the equivalent to 2% of revenues for every business in Britain. The figure also represents more than 10% of the total losses across Europe. Analysis from pay and spend automation platform Soldo shows that European businesses lose £301bn a year. Germany is the hardest hit, losing £54bn, while France loses a similar amount to the UK and Italy loses around £26bn. Carlo Gualandri, CEO of Soldo, said: “Although many businesses in the UK are struggling to manage cashflows in this exceptionally challenging economic landscape, we see that many are losing significant revenues on an annual basis simply through poor management of spending.” The report also highlights that over £19bn a year is lost in unclaimed VAT in the UK, with £3.8bn of this lost due to errors in the way receipts are processed.

325k new roles listed in last two weeks

Figures suggest the jobs market is starting to recover after the coronavirus crisis, with 325,000 new roles listed in the last two weeks and vacancy numbers now at the highest level since before the pandemic in every region of the country. The hospitality sector is leading the bounce back, with pubs and restaurants looking to bring in staff before reopening on April 12. Data shows there are 33,000 jobs for bar staff, while 21,200 waiter and waitress positions are vacant. There has also been an increase in job listings in retail, with more than 38,000 shop assistant and manger vacancies. Neil Carberry, chief executive of the Recruitment and Employment Confederation, said: “The fact we have just had the best two weeks for new jobs postings since last March is a sure sign of the jobs market’s resilience.”

International Travel

The resumption of non-essential international travel from Britain could face further delay if coronavirus infections continue to surge elsewhere in the world, the government warned. The British Travel Association said the announcement was “beyond disappointing”

CBI: Economic recovery needs travel

Lord Bilimoria, president of the Confederation of British Industry, says that reigniting the economy post-pandemic “will be a complex task”, arguing that while the rollout of coronavirus vaccines has increased optimism over a rapid recovery, “plenty of hurdles remain”. He says that business confidence and consumer freedoms need to be restored, while restarting global traffic is “unquestionably a cross-economy priority”. The importance of international connectivity, Lord Bilimoria argues, “extends far beyond firms directly involved in the travel sector”, with a broad range of activity across the wider economy underpinned by air, sea and rail routes. He notes that the CBI is calling on the Government’s Global Travel Taskforce to “leave no stone unturned in seeking a solution to the international travel conundrum”, offering that business “craves the opportu nities which international travel creates.”

Factory growth hits ten-year high

Growth in manufacturing hit a decade high in March, while output rose at the quickest rate since late 2020. The UK Manufacturing Purchasing Managers’ Index hit a reading of 58.9 in March – the highest since February 2011 on an index where a reading over 50 indicates growth. Business optimism hit a seven-year high, while employment in manufacturing rose at its fastest rate in more than six years. Howard Archer, chief economic adviser to the EY Item Club, said expansion in the sector “reflects the fact that lessons have been learned and experience gained in maintaining operations over the course of the pandemic”.

Redundancies for over-50s jump

Redundancies among the over-50s have almost tripled in the past year, with 107,000 made redundant between last November and January 2021. The report from Rest Less says the redundancy rate for those who are over 50 is now higher than all other age groups at 12.8 per 1,000 employees. As of the end of February, over-50s made up 28% of the total furloughed workforce. Rest Less founder Stuart Lewis voiced concern over the findings, noting research showing that unemployed workers over the age of 50 are two-and-a-half times more likely to drift into long-term unemployment than younger people, pointing to age discrimination in the recruitment process and a lack of tailored retraining programmes.

Small business bosses’ dividends rise

The number of small business owners who took dividends from their companies has doubled in a year, a report from Price Bailey shows, with this coming despite firms making no profit amid the pandemic. Price Bailey says several owners seem to have dipped into cash reserves and believes many may also have used government bounceback loans. The analysis shows that there were 129,748 director’s loan accounts over the past 12 months, compared with 61,983 in the previous year and 61,838 the year before that. The average loan was £78,482. Price Bailey partner William Wilson said: “Directors may not have a complete understanding of their financial position, including whether they have taken illegal dividends, until they file up-to-date accounts.” He also highlighted the tax implications of coronavirus-related loans being used for payouts for bosses, with it noted that if a loan from the company is not paid b ack within nine months, it triggers a Section 455 tax charge of 32.5%.

Mid-market firms set to drive the recovery

A new report from BDO suggests the economy is set for a significant boost on the back of investment and recruitment by mid-sized businesses. The analysis suggests firms with turnover between £10m and £30m will accelerate the post-pandemic recovery. The report polled leaders from 500 medium-sized businesses, with three-quarters saying 2021 is the time to invest. The same proportion expect revenues to return to pre-pandemic levels within a year of restrictions being lifted. On employment aims, 86% plan to add staff in the next six months, with 54% planning permanent appointments. Nearly half of businesses are planning investment following the “super deduction”, an initiative announced in the Budget which allows companies to cut their tax bill by up to 25p for every £1 they invest. BDO describes mid-sized firms as the “economic engine”, with them contributing £1.4 trn in revenues and accounting for a quarter of jobs despite representing less than 1% of all businesses.

Brexit snags see firms cut trading ties with EU

New research suggests three in ten British businesses have stopped trading with the European Union since the end of last year. Survation polled 1,040 business leaders between February 16 and 22 about post-Brexit trading conditions on behalf of London First, the business group, and EY. It found that more than seven in ten have experienced problems with trading since the Brexit transition period ended on December 31 and nearly half expect the disruption to continue in the long term.

190k retail roles lost in a year

Centre for Retail Research figures show that almost 190,000 jobs have been lost in the retail sector since shops were forced to close under the first coronavirus lockdown in March 2020. Analysis shows that between March 23 last year and March 31 this year, 188,685 retail jobs have vanished. Of these, 83,725 were due to administrations, while 11,986 jobs were cut during CVA processes and 92,974 jobs were lost through rationalisation programmes. The report also reveals that the UK has seen 15,153 store closures amid the pandemic. Data from real estate adviser Altus Group shows that up to 401,690 shops remain closed under the latest restrictions. With retail bosses voicing concern that a return of business rates payments could see further closures, Robert Hayton, president of property tax at Altus, says there are questions over rates liabilities, noting that they are “calculated by reference to rents being paid six years ago, bearing no resemblance to the here and now”.

Easter footfall doubles

High streets have seen footfall more than double over the Easter weekend compared to last year’s lockdown. Visits to high streets were up 134% on Good Friday and Easter Saturday when compared to a year ago. Retail parks and shopping centres saw a similar boost in visitor numbers, with footfall up 100% on Easter Sunday. Despite outdoing last year’s visitor numbers, the Springboard figures show footfall is down 67% on pre-pandemic levels.


ASOS is set to report a further jump in earnings and sales as continuing restrictions have kept consumers shopping online. Revenue is expected to jump 22% to around £1.95bn when it updates shareholders on its trading performance for the half year to February.


OPEC+ will debate two key options for oil policies from May and beyond, including a rollover of existing cuts and a gradual increase of production, three OPEC+ sources said. OPEC and allied producers, a grouping known as OPEC+, are cutting output by a little more than 7 million barrels per day (bpd) to support prices and reduce oversupply. Saudi Arabia has added an additional 1 million bpd to those cuts.

Corp Tax

Janet Yellen called for a minimum corporate-tax rate among G20 countries in her first big speech as America’s Treasury secretary. Ms Yellen said that international co-operation was needed to prevent companies from exploiting a “race to the bottom”. Such a move could spur “innovation, growth and prosperity,” she said during the spring IMF and World Bank meetings.


The International Monetary Fund upgraded its global economic growth forecast for the second time in three months


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