Business news 8 February 2024

Slower wage growth boosts case for rate cut. Bank of England expected to cut interest rates in May. Climate, corporate misconduct, online retailer collapses & more business news that we thought would interest our members.

James Salmon, Operations Director.

Slower wage growth boosts case for rate cut

Wage growth has eased to its slowest pace in nearly three years, according to a report by the Recruitment and Employment Confederation (REC) and KPMG. The latest snapshot of the jobs market shows that greater staff availability and a slackening of demand for workers curbed wage growth last month. The index of permanent placements fell to 43.4 in January from 45.6 the previous month. The permanent starting salaries index fell to 55.8, with this above the 50-point threshold that separates growth from contraction but broadly in line with its pre-pandemic level. The temporary starting salary index edged up to 54.8 in January from 54.6. The figures suggest that salary growth has moderated after being pushed to record highs by workers demanding pay increases to offset cost of living pressures. Lower pay settlements have been identified as a requirement for the Bank of England to start cutting interest rates and Neil Carberry, chief executive of the REC, said: “Pay has normalised, inflation is dropping and the hiring market has been cooling for a year now. It’s high time the Bank starts releasing the brake pedal on our economy.”

Bank of England expected to cut interest rates in May

Inflation could fall to below 2% in Q2, enabling the Bank of England to cut interest rates in May, according to forecasts from the National Institute of Economic and Social Research. The think-tank expects that inflation will average just 1.2% in the second quarter before rebounding to the Bank’s 2% target by the end of the year, adding that it will “settle” at this level “over the medium term.” The Bank itself estimates that inflation will fall to 2% in the spring before climbing to end the year at around 2.7%.


For the first time global temperatures averaged over 1.5°C above pre-industrial levels across an entire year, reported the EU’s climate service.

Watchdogs fail to punish executives for corporate misconduct

UK regulators and prosecutors are failing to properly hold senior executives to account for corporate misconduct, a report by campaign group Spotlight on Corruption has warned. The report said directors from SMEs are far more likely to face conviction, regulatory fines and bans than senior executives in large firms.

Analysis shows that while the Financial Conduct Authority issued a total of £4.1bn in fines against 139 firms between 2013 and 2022, only 30 individuals were fined in these cases. Of these, only eight were top executives formerly employed by large firms. Meanwhile, the Serious Fraud Office has secured a total of £2.1bn from both company convictions and plea deals involving 20 firms. Only 18 individuals were convicted in those cases, of which only one was considered a senior executive at a large firm.

Dr Susan Hawley, executive director of Spotlight on Corruption, said: “After every corporate scandal … there are rightly calls for senior executives to face accountability – but this rarely happens.” She added: “This lack of accountability is bad for British business, bad for the UK economy and bad for the British people.”

Online retailer collapses hit record high

The number of online-only retailers going bust has reached a record high, according to Price Bailey. The firm’s analysis shows that 615 businesses entered insolvency last year, a 13% increase compared to the previous year. The number of internet-only retail sector insolvencies has more than quadrupled since 2010.

Matt Howard, head of the insolvency and recovery team at Price Bailey, said demand for in-person experiences after the pandemic has brought footfall back to physical stores. He noted: “Cost-conscious shoppers often find it easier to find price promotions and special offers in physical shops, which has tilted spending away from the online space.” The closure of non-essential high street outlets during the pandemic benefited online retailers, but they have struggled since physical stores reopened.

Online sales as a percentage of total retail sales have decreased from 37.8% in January 2021 to 30.7% currently.

Consultancies see 80% drop in vacancies

The number of job vacancies at UK consultancies dropped by more than 80% last year, with experts attributing the decline to over-hiring and decreased demand. Analysis by Vacancysoft shows that McKinsey and Co, Bain & Co, Boston Consulting Group, and Accenture posted just 248 jobs in 2023, compared to 1,389 in 2022 and 1,764 in 2021. The Big Four firms saw a 60% drop in UK vacancies to 2,767, down from over 10,000 the previous year. James O’Dowd, managing partner at specialist recruitment firm Patrick Morgan highlighted that pre-pandemic, major consulting firms had an annual churn rate around 20%-25%. He said: “However, this year, strong economic headwinds have led to a decrease in this figure to as low as 3%, due to fewer opportunities available for consultants to leave their current firms.” This, coupled with the over-hiring in 2022, has significantly reduced hiring needs,” he added. Francesca Lagerberg, CEO of Baker Tilly International, noted that there “has also been a fall out in the last 12 months from post-pandemic over optimistic hiring in advisory.”

Hunt urged to reform tax system which ‘discourages work’

The UK tax system is discouraging people from working, Matthew Lynn in the Telegraph suggests. Looking at why people are “less and less willing to work,” he says: “For many, thanks to our punishing tax system, it simply isn’t worth it.” He notes that this is the biggest tax-raising parliament on record, going on to warn that the “byzantine tax system is especially brutal to those seeking to better themselves.”

Mr Lynn says that while the headline top rates of tax are 40% and 45%, “the complex interaction of benefits, phased thresholds and student loans means that sometimes the effective marginal rates can be far higher even for people on considerably lower incomes.” He also cites analysis showing that for those in work, marginal tax rates are “at such levels that there is often little incentive to seek a pay rise or work hard for a promotion.” Research from Tax Policy Associates shows that millions of people are paying marginal rates of more than 60%, “and hundreds of thousands paying even more,” with some even above 100%.

Mr Lynn says that while Jeremy Hunt will have room for tax cuts in the spring, the Chancellor’s priority must be simplifying the system. “It would more than pay for itself, and might just end our abysmal cycle of high tax rates pushing people into greater state dependency – creating a need for even more taxes,” he argues.

Yodel prepares to call in administrators

Parcel courier Yodel is reportedly preparing to call in administrators, with insolvency experts at Teneo lined up after efforts to find a buyer floundered. While rivals including InPost and Shift – as well as private equity and turnaround funds – were said to have been considering a takeover, interested is said to be waning. A Yodel spokesman said: “A process to review strategic options is nearing its conclusion with a number of parties looking to acquire the business.” They added: “In the meantime Yodel is focused on business as usual.”

UK investors pump £2bn into equity funds

Analysis by Calastone’s Fund Flow Index shows that UK investors added over £2bn to equity funds in January. This marks the highest level since April 2021. Calastone said this came amid a “distinct surge in buying interest,” with buy orders up by a sixth compared to the monthly average seen over 2023. US equity funds saw record inflows of £1.4bn, while European equity funds saw their third-best month on record with inflows of £471m. Asia-Pacific funds saw their ninth consecutive months of losses at £211m, while UK equity funds saw outflows hit £673m. Edward Glyn, head of global markets at Calastone, said: “Doom and gloom over the UK stock market seems firmly lodged in investors’ minds,” adding: “UK equities are exceptionally cheap by historic and international comparisons, but buyers are nowhere to be found.”

House prices climb 2.5%

House price growth hit its highest point in a year in January, according to data from Halifax. Prices were up 2.5% compared to January 2023, hitting an average of £291,029. The increase came as mortgage rates continued to ease and inflation slowed. Halifax’s house price data is based on its own mortgage lending, which does not include buyers who purchase homes with cash or buy-to-let deals. Kim Kinnaird, director of Halifax Mortgages, said “affordability challenges are likely to remain” in the coming months, adding that further falls in house prices “should not be ruled out, against a backdrop of broader uncertainty in the economic environment.”

£31k a year needed for retirement

The Pensions and Lifetime Savings Association (PLSA) says a single person will need £31,300 a year for a moderate income in retirement. This is £8,000 higher than a previous calculation, with the increase driven by the rising cost of living. The analysis estimates that a single person needs £14,400 a year for a minimum income and £43,100 a year for a comfortable retirement. The calculations say couples require a joint £22,400 at the minimum level, £43,100 at a moderate level, and £59,000 at a comfortable level. Nigel Peaple, director of policy and advocacy at the PLSA, said: “The cost of living has put enormous pressure on household finances over the last year and, as the research shows, this is no different for retirees.”


AstraZeneca reported that in 2023 total revenue increased to $45.81 billion from $44.35 billion a year earlier. The Cambridge, England-based pharmaceutical company’s pretax profit more than doubled to $6.90 billion from $2.50 billion

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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.

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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.


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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.