Business news 7 December 2023
James Salmon, Operations Director.
UK households yet to feel full impact of higher rates. Private credit poses threat to financial stability. Sterling, insolvencies, Extreme weather, house prices, construction, AI& more business news that we thought would interest our members.
UK households yet to feel full impact of higher rates
UK households and businesses have been resilient in the face of rising interest rates, the Bank of England said in its latest Financial Stability Report. However, as the Bank has repeatedly warned in the past, the full effect of higher interest rates was yet to come through. The BoE said stronger-than-expected wage and income growth since its last review in July had reduced some of the strain on households which have been hit by high inflation and rise in taxes as well as higher borrowing costs. “Nevertheless, household finances remain stretched by increased living costs and higher interest rates, some of which has yet to be reflected in higher mortgage repayments,” the BoE’s Financial Policy Committee said. As for corporate borrowers, firms in wholesale trade, real estate and construction and those which were energy-intensive faced higher risks than their peers, the BoE said.
Private credit poses threat to financial stability
The Bank of England has raised the alarm over the vulnerability of the private credit market, which has tripled in size globally since 2015 to £1.8trn. The Bank’s Financial Policy Committee (FPC) warns that when leveraged loans and high-yield bonds are included, the total comes to more than $10trn, almost double that of with years ago. Sarah Breeden, the Bank’s deputy governor with responsibility for financial stability, said risky corporate lending “is a business model that has grown up in a low interest rate environment, and we might expect it therefore to be more challenged as we adjust to a higher interest rate environment.”
Sterling falls
Euro and Sterling fell broadly in the European session yesterday, a trend largely driven by notable decrease in benchmark bond yields in Germany and the UK. The pound fell bell $1.26 against the dollar with the 10 year gilt yield dipping below 4% for the first time since May. These movements in bond markets reflect increasing expectations among investors for upcoming rate cuts by ECB and BoE.
However, in remarks yesterday following the publication of the Financial Stability Report, BoE Governor Andrew Bailey said UK interest rates will need to be kept at current levels for an extended period adding the inflation outlook remained highly uncertain.
Cash
Shopping with cash has risen for the first time in a decade as consumers look to use cash to help with budgeting in the cost of living crisis. The British Retail Consortium (BRC) said 19% of purchases were made with cash last year, up from 15% in the previous year.
UK unprepared for extreme weather, says NAO
The UK Government is not adequately prepared for climate disasters including severe droughts and floods, a report by the National Audit Office has found. Climate campaigners have said that the UK Government is “like a boiling frog” and “oblivious” to extreme weather. The report assessed four extreme weather events and found that the Cabinet Office does not have a strategy in place to make the UK resilient to extreme weather. The report also highlighted that the Government does not track or evaluate its spending on extreme weather resilience.
House Prices
UK House Prices rose again last month and there are signs that activity in the market is picking up, according to the UK’s biggest mortgage lender. The Halifax said prices rose by 0.5% in November, the second increase in a row. It said recent figures for mortgage approvals suggested “a slight uptick” in activity among buyers as the cost of home loans eases. Property prices are 1% lower than in November last year, the lender said, with the average property costing £283,615.
Construction
UK Construction contracted for the third consecutive month during November, led by another sharp fall in residential building, a survey showed on Wednesday. The UK Construction PMI registered 45.5 in November, down fractionally from 45.6 in October and the second-lowest reading since May 2020. The report showed that house building (index at 39.2) remained by far the weakest-performing segment, followed by civil engineering (43.5). Commercial building showed some resilience (index at 48.1), but this category has now decreased for three months in a row.
Train Strikes
The latest train strikes hit Britain today with Aslef launching a series of rolling strikes.
AI regulation
The EU is close to agreeing the most comprehensive regulation of artificial intelligence (AI) in the developedworld. Negotiators have set out a series of controls for content generative artificial intelligence tools such as OpenAI’s ChatGPT.
CosMcs
McDonalds has revealed it’s answer to Starbucks and other coffee chains with plans in the US for CosMc’s, focusing on the sweet tooth market. This will sit alongside the McCafe. McDonalds also said they would be opening 10,000 new stores worldwide by 2027.
SpaceX
Elon Musk’s SpaceX is reportedly looking to sell shares to the market at a company valuation approaching $175 billion.
Jeremy Hunt urged to simplify tax rules for self-employed
Around a quarter of workers are considering becoming self-employed and almost one-fifth said they could go it alone within one year, according to a survey by recruitment services firm Workwell and the Association of Independent Professionals and the Self-Employed (IPSE). “Contracting and freelancing remains an attractive option for substantial numbers of employees with around one in four considering giving up the security of working for someone else,” said Chris Mollan, head of accountancy services at Workwell. Andy Chamberlain, director of policy at IPSE, said: “Government must not miss its opportunity to support people in launching a self-employed career, especially when today’s figures show a strong appetite to operate in this way. Simplifying tax rules for the self-employed and more tailored support and resources for new freelancers would not only help them to succeed early in their self-employed careers, but for many years to come.”
Latest Insolvencies
Appointment of Liquidators – AMBASSADOR – LINE SOUTH LTD
Appointment of Liquidators – SAVE POINT DESIGN LTD
Appointment of Liquidators – TURNAROUND MEDIA LIMITED
Appointment of Liquidators – COLEMAN HOMES LIMITED
Appointment of Liquidators – LEE HICKMAN LIMITED
Appointment of Liquidators – GREENHEDGE CONSULTANTS LTD
Appointment of Liquidators – INFINITE TECH LTD
Appointment of Liquidators – GAM PROPERTIES LIMITED
Appointment of Liquidators – IMS WORLDWIDE HOLDINGS LIMITED
Appointment of Liquidators – SOFTROOM LIMITED
Appointment of Liquidators – RIOPELLE LTD
Appointment of Liquidators – ITECHNICAL CONSULTING LIMITED
Appointment of Administrator – D & S COMMISSIONING LTD
Appointment of Liquidators – CLOUD CONSULTING LTD
Appointment of Liquidators – INTERIM MANAGEMENT SOLUTIONS WORLDWIDE LIMITED
Appointment of Liquidators – IMS WORLDWIDE LIMITED
Appointment of Liquidators – CONTRACT CONNECTIONS LIMITED
Appointment of Liquidators – EER CONSULTANTS LTD
Appointment of Liquidators – JPS FINANCIAL LTD
Appointment of Liquidators – EMPRIZE LIMITED
Appointment of Administrator – SENSIBLE DEVELOPMENT LIMITED
Appointment of Liquidators – FRAGRANCE FACTORY LIMITED
Appointment of Liquidators – PALANTIR CONSULTING LIMITED
Appointment of Liquidators – LWCUS LTD
Appointment of Liquidators – CESY LTD
Winding up Order (Companies) – HAMRA LIMITED
Petitions to wind up (Companies) – LLOYDS GENERAL TRADING UK LTD
Appointment of Liquidators – MERCK SERONO EUROPE LIMITED
Appointment of Administrator – CLAREMON LIMITED
Appointment of Liquidators – JOHN THAME LIMITED
Appointment of Liquidators – WESTLAKE PHARMACY SERVICES LTD
Appointment of Liquidators – ROBERTS (IPSWICH) LIMITED
Appointment of Administrator – BARRY WOOD PLANT HIRE LIMITED
Appointment of Administrator – J F RENSHAW LTD
Winding up Order (Companies) – VAANI CASH & CARRY LIMITED
Appointment of Liquidators – LARKSTOKE LTD
Appointment of Liquidators – J67 CONSULTING LIMITED
Petitions to wind up (Companies) – HAND HYGIENE SOLUTIONS LIMITED
Appointment of Liquidators – GLOBAL SPORTS BROADCASTING LIMITED
Appointment of Liquidators – BAS 2021 LIMITED
Petitions to wind up (Companies) – TRANSITIONS HOUSING LTD
Appointment of Administrator – PURE LEGAL COSTS CONSULTANTS LIMITED
Petitions to wind up (Companies) – GROUNDFORM PILING LTD
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!
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.