Business news 8 March 2024
Happy International Women’s Day! Brexit hitting UK economy. Labour and Tories accused of silence over cuts. Private sector expects wages growth to slow. This year’s tax cuts dwarfed by last year’s increases. And more business news that we thought would interest our members.
James Salmon, Operations Director.
Brexit hitting UK economy, Budget watchdog warns
While the Office for Budget Responsibility (OBR) says the UK’s GDP is set to grow by 0.8% this year before picking up to around 2% annually over the next four years, it has warned: “The effects of subdued investment, the energy price shock and Brexit compound the ongoing weakness seen since the financial crisis.” The OBR’s detailed analysis of the Chancellor’s Budget says it expects to see higher household disposable incomes, a sharper slowdown in inflation, and lower interest rates but forecasts that trade volumes “will continue to be subdued in the next few years due to sluggish growth in the UK and global economies, and the evolving impact of Brexit.” The report adds that the full implementation of the Brexit Trade and Cooperation Agreement between the EU and the UK will “further increase barriers to trade in goods with the EU” in coming months.
The Office for Budget Responsibility said its long-running prediction is “broadly on track” to show a 15% fall in trade and a 4% reduction in the UK economy’s potential productivity compared to if the UK had stayed in the EU.
Labour and Tories accused of silence over cuts
The Institute for Fiscal Studies (IFS) has accused the Conservatives and Labour of a “conspiracy of silence” over the scale of spending cuts or tax rises. The IFS said tax cuts announced in the Budget would not make up for the impact of tax increases and rising prices, warning that households will be worse off by the election than they were at the start of this parliament. IFS director Paul Johnson said the next parliament could “well prove to be the most difficult of any in 80 years for a chancellor wanting to bring debt down.” He added that both the Conservatives and Labour were joining in “a conspiracy of silence in not acknowledging the scale of the choices and trade-offs that will face us after the election.”
Private sector expects wages growth to slow
A Bank of England survey shows that the pace of wages growth in the private sector is expected to slow in the coming year. Its monthly poll of nearly 3,000 chief financial officers shows that businesses expect annual wage growth of about 6.7%. This is down by ten basis points from January’s survey. The survey also found that companies had experienced weaker output price inflation of 5.4% in the three months to February. This is down by 0.2 percentage points from the previous rolling three-month period. Companies expect their output inflation to fall by 1.1 percentage points over the next 12 months.
This year’s tax cuts dwarfed by last year’s increases
Analysis by the Resolution Foundation suggests that while Wednesday’s Budget will mean a net tax cut of £9bn is taking effect this year, this is dwarfed by an estimated £27bn of tax rises that came into effect last year and a further £19bn that will come in after the election. The think-tank also found that while more than three-quarters of the personal tax cuts announced in the Budget go to the richest half of households, analysis of tax and benefit policies announced in this parliament show that middle-earners “have come out on top, while taxpayers earning below £26,000 or over £60,000 will lose out.” Torsten Bell, chief executive of the Resolution Foundation, noted that the “biggest group of losers are pensioners, who face an £8bn collective hit.” The report also highlighted the scale of lost pay growth. It noted that after taking account of rising prices, the average wage will not regain its 2008 level until 2026.
Labour looks at tax loopholes
Labour plans to fund its spending pledges by closing tax loopholes and cutting waste. The Chancellor’s decision to abolish the non-dom tax regime and use the funds to cut National Insurance contributions has prompted Labour to find alternative sources of revenue. Labour is said to be considering targeted tax increases, such as making private equity bosses pay the top 45p tax rate and closing other tax loopholes. Shadow Chancellor Rachel Reeves has ruled out higher taxes on working families as well as a wealth tax.
Hunt: NI will not be scrapped ‘any time soon’
Jeremy Hunt says scrapping National Insurance (NI) will not happen “any time soon,” saying that while he wants to “end the unfairness” of the system of double taxation on work, eliminating contributions altogether would be a “huge thing to do.” The Chancellor, who cut NI contributions by 2% in the Budget, told Times Radio that abolishing the measure would be a “huge job,” adding: “I don’t think it’s realistic to say that’s going to happen any time soon.” In a separate interview with Sky News, Mr Hunt suggested the Government could potentially “merge” NI and income tax.
Non-dom exodus on the cards?
Tax lawyers have seen a surge in phone calls from non-doms planning to leave Britain after the Chancellor announced a crackdown in the Budget. An estimated 5,500 non-doms are ineligible for a four-year tax break, according to Government figures, and will instantly face tax rises when the rules change next year. The Office for Budget Responsibility has forecast that overhauling the regime will raise around £3bn annually. Christopher Groves, a partner at international law firm Withers, said: “The phones started to ring as soon as the announcement came out. Lots of people are trying to work out what it means for them.” James Ward, of law firm Kingsley Napley, warned: “Everything that was making the UK attractive to the wealthy is being dismantled.”
HMRC funding boost will pull in £4.5bn
Jeremy Hunt is to provide HMRC with an extra £35m a year to chase down individuals and companies that owe the tax office. The Chancellor said: “I will provide HMRC with the resources they need to ensure everyone pays the tax they owe,” saying that this help raise an additional £4.5bn by April 2029.
British savers pull out of equities
British savers withdrew £24.3bn from funds last year, according to data from the Investment Association, with this only the second time an annual outflow had been recorded. The analysis shows that 2023’s net losses were lower than the £26.9bn that exited funds in 2022. Equity funds performed the worst last year, suffering £22bn in outflows. The £13.6bn taken out of UK equity funds in 2023 represented the eighth consecutive year that savers had pulled cash and was the worst year on record. Money market and fixed-income funds were among the most-bought, recording net inflows of £2.2bn and £716m, respectively.
House prices up 0.4% in February
Data from Halifax shows that house prices rose by 0.4% in February, with this marking the fourth consecutive monthly increase. On a year-by-year basis, prices were up 1.7% in February compared to 2.3% in January. Kim Kinnard, director at Halifax Mortgages, commented: “Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.”
Packaging merger
Mondi and its packaging peer DS Smith have reached an agreement in principle that will see Mondi take over DS Smith in a proposed all-share deal. In a statement dated Thursday, but was released on Friday, Mondi said the possible merger that would create a company worth more than £10 billion is subject to regulatory clearance and mutual confirmatory due diligence. In terms of the agreement, Mondi shareholders would own 54%, while their DS Smith counterparts would hold 46%.
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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.
headlines . . . . . And more business news that we thought would interest our members.
James Salmon, Operations Director.
Latest Insolvencies
Appointment of Liquidator
Appointment of Administrator
Winding Up Petitions
Winding Up Order Notices
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.