Business news 8 April 2025
Trade deal may not prevent recession. US mulls second tariff hit for UK firms. Two in five feeling financial strain. Services, Lloyds, house prices, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
Trade deal may not prevent recession
Paul Johnson, director of the Institute for Fiscal Studies (IFS), says the UK may be heading toward a recession, even if the Government can agree trade deals to mitigate the impact of US tariffs. Reflecting on the declines seen on global stock markets in the wake of President Donald Trump’s tariffs on imports into the US, he said: “Unless something happens, we are certainly in for a period of much slower growth than we were expecting, quite possibly a recession.” Asked whether trade deals would help support the UK economy, Mr Johnson warned: “I rather fear we’re screwed either way.”
US mulls second tariff hit for UK firms
US President Donald Trump is considering an unprecedented move to impose a doubled tax rate on American arms of UK companies. The plan involves invoking a 91-year-old rule under Section 891 of the Internal Revenue Code, which allows the US to raise taxes on foreign companies if their home countries impose unfair levies on US businesses. Tim Sarson, head of tax policy for KPMG UK, warned that this could have a more significant impact than the recently announced tariffs on British goods being exported to the States, saying: “That’s the next battle in the [trade] war, and potentially affects the UK much more than the tariffs because we’re a services economy.”
PM to speak on Tariffs
Prime Minister Keir Starmer will be questioned by senior MPs on Tuesday amid turmoil in global markets caused by US tariffs, which Donald Trump has insisted he will not pause. The UK prime minister is expected to hold a Cabinet meeting of his most senior ministers in Downing Street on Tuesday morning, before he heads to Parliament, where he will appear before the Liaison Committee of senior parliamentarians on the last day the Commons sits before it heads into the Easter recess.
Firms plan to increase prices due to tariffs
The British Chambers of Commerce (BCC) has warned that a 10% tariff on goods exported to the US will hit UK traders, with two in five businesses which export to the US saying they will suffer a “significant negative impact” from charges. Around a third of British businesses exposed to tariffs are planning to raise their prices, while 15% plan to explore alternative suppliers. Despite concerns over the 10% tax, 40% of UK firms polled said the tariffs were less severe than they had been expecting. BCC director general Shevaun Haviland said that while it is possible that a deal can be done with the US, “firms don’t want to have all our eggs in one basket and want to see closer trading relationships with the EU and other markets.”
Bank bosses hold tariff talks
Executives from Barclays, HSBC, Bank of America, JPMorgan and Citi have held talks on the new tariffs on goods being imported into the US in a call organised by the Bank Policy Institute. This comes as lenders have seen their shares among the hardest hit since President Donald Trump announced the charges, with the FTSE 350 bank index falling by more than 10% in five days and HSBC and Standard Chartered both falling after China announced retaliatory tariffs against the US.
Lloyds accused of failing small firms
Whistleblowers claim that Lloyds Bank failed to support small firms during the aftermath of the 2008 financial crash. Business owners have told the BBC’s Panorama that their companies collapsed after being referred to the Business Support Unit, which was intended to assist struggling clients. A whistleblower says there was a “pattern” of misclassifying viable businesses as “distressed,” leading to their unnecessary administration. Lloyds has categorically denied the allegations, saying the “historic allegations have been thoroughly investigated… and found to be unsubstantiated.”
PM commits to fiscal rules
Sir Keir Starmer has reiterated the Government’s commitment to self-imposed fiscal rules that mean it cannot borrow to fund day-to-day spending. The Prime Minister also insisted that there will be no increase in income tax, National Insurance or VAT. Amid concern over the economic impact of the US’ new global import taxes, Sir Keir said: “The reaction to the challenges of the last few days is not for us to say the first thing we will do is put on one side our fiscal rules,” adding: “There is enough uncertainty and insecurity as it is.”
Two in five feeling financial strain
Nearly two in five Brits are either cutting their spending or are unable to pay essential bills due to financial strain, according to a poll for City AM and Freshwater Strategy. More than one in ten said they were currently unable to pay for essential bills or were incurring debt to do so, while a fifth said they would be unable to cover an emergency £500 bill. It was also found that around three in five are worried about the impact of US tariffs on their personal finances.
Employees face the tax burden of NI increase
Workers are set to face a financial blow of up to £11,000 over the next five years due to the Government’s new jobs tax. Chancellor Rachel Reeves has increased employer National Insurance contributions (NICs) from 13.8% to 15% in a move designed to generate approximately £25bn annually. However, analysis by the Liberal Democrats indicates that most of this tax burden will be transferred to employees, with an average worker expected to lose around £2,900 by 2030. Kensington and Chelsea is projected to be the hardest hit area, with employees facing an average loss of £10,800. Lib Dem MP Daisy Cooper said: “These figures lay bare the grim reality of the Chancellor’s jobs tax,” adding: “For the Government to pretend that this tax hike will not impact people’s pay packets is a complete deception.” The Office for Budget Responsibility has calculated that 76% of the rise in employers’ contributions will be passed down to workers through reduced real wages.
Services sector fuels economic growth
Research by BDO highlights the UK’s services sector as the “driving force” behind recent growth, despite challenges in other areas of the economy. The BDO Output Index recorded a rise in business output for the first time this year, with services contributing significantly. The output index increased to 97.75 on a scale where a figure above 95 is deemed to be positive. However, the manufacturing sector has struggled, with the index dropping to its lowest since December 2022, exacerbated by trade policy concerns. BDO partner Kaley Crossthwaite has called on ministers to support firms in the services sector and drive growth, saying: “To invest, expand and continue playing their part, they need targeted policies that strengthen the UK’s position in international markets.”
Markets
Yesterday, UK equities gyrated sharply following a significant sell offs in Asia early doors, the FTSE 100 closed down 4.38% at 7702.08 and the Euro Stoxx 50 closed down 4.55% at 4656.41. Hong Kong closed off 13.22% taking its index to the lowest level in 28 years. Banking stocks were off sharply at first before recouping some of their losses towards the close. Overnight in the US however it started to stabalise with the S&P 500 down just 0.23% to 5062.25 and the NASDAQ actually rose 0.1% to 15603.26.
Apple continued to sell off, losing almost $7 per share or 3.67% with hopes of a carve out for Apple receding. Apple produces in China (34%), Vietnam (46%) and India (26%), each of these countries were hit with significant tariffs.
President Trump has threatened a 50% further tariff on China if its 34% retaliatory tariff is not withdrawn by 9th April 2025. China vowed to “fight to the end”
Vietnam’ s offer of a 0% tariff on US goods was rejected by the Trump administration, with the response that Vietnam was still engaged in ‘non tariff cheating’.
Elsewhere, Ursula von der Leyen, the president of the European Commission, said that the EU could scrap tariffs on American industrial goods if Mr Trump agreed to drop the US’ equivalent levies.
This morning on currencies, the pound is currently down, worth $1.273 and €1.166. On Commodities, Oil (Brent) is at $64.25 & Gold is at $2996 having also run into profit taking. On the stock markets, the FTSE 100 is currently up 2.2% at 7872 and the Eurostoxx 50 is up 1.5% at 4725.
Trump could hike China tariffs
US President Donald Trump has threatened to impose an additional 50% tax on Chinese imports, potentially raising the effective import tax rate to 104%. This comes after China retaliated to new US tariffs on imports with a 34% levy on US goods. Mr Trump has warned that if China does not withdraw its tariff increase, he will implement a new tax and terminate all talks with China.
House prices fell in March
UK house prices fell by 0.5% in March, according to Halifax, with data showing that the average property is now worth £296,699. The decline follows a 0.2% dip recorded in February. Despite prices falling month-on-month, prices are up 2.8% year-on-year. The recent lull in the market has been attributed to higher stamp duty charges which came into force on April 1. Amanda Bryden, head of mortgages at Halifax, said: “House prices rose in January as buyers rushed to beat the March stamp duty deadline,” adding that with these deals now completing, demand is returning to normal.
Only 32% of visas go to key sector workers
Home Office data shows that fewer than 181,000 visas were allocated to highly-skilled foreign workers in key sectors crucial for economic growth, representing only 32% of the total 560,000 visas issued. The analysis highlights a significant shortfall in skilled workers, particularly in life sciences, where only 16,000 visas were granted despite a need for 133,000 by 2030. The previous government’s changes to the Skilled Worker visa have been blamed for exacerbating the issue, with officials having increased the minimum salary threshold and imposed stricter restrictions on employees bringing dependents into the country. Zain Ali, CEO of business consultancy specialist Centuro Global, comments: “The UK’s visa system is unfit for purpose and fails to differentiate between roles critical to our economy.”
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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!