Business news 9 December 2022
James Salmon, Operations Director.
SMEs urged to continue efforts to become net zero. UK household spending trails industrialised world. UK now less attractive to overseas workers . Dyson: Flexible working policy will damage UK competitiveness . Big Bang 2.-0. And more business news.
SMEs urged to continue efforts to become net zero
A new report from Lloyds Banking Group has found 43% of SMEs see the cost of transitioning their business to net zero as the chief obstacle to achieving that goal while a third cited difficulties in reducing emissions outside of their own operations. Over seven in ten reported that both the rising cost of energy and soaring inflation are having the severest impact on their journey to net zero. Paul Gordon, MD of SME and mid corporates at Lloyds, said there are “common and significant” challenges all SMEs face in the journey to net zero. However, he stressed that such firms “should not be discouraged” from continuing, adding: “The progress small businesses make is crucial… and tackling the challenges around measuring impact and progress will take collaboration to overcome.”
UK household spending trails industrialised world as cost of living bites
Analysis by the FT has found that household spending in the UK in the three months to September was 3.2% below pre-pandemic levels, by far the biggest fall among the G7 economies.
Rents
According to Zoopla, rents have risen by 12% in 12 months to October and on average costs renters 35% of earnings, the highest it has been, since 2009. In London rent is an average of 48.4% of earnings.
UK now less attractive to overseas workers
The UK has slipped seven places in the Institute for Management Development (IMD)’s world talent ranking, falling to 28th out of 63 countries. The survey of more than 5,000 executives from 63 countries showed that the UK was no longer being seen as a particularly favourable destination for international professionals, ranking behind countries such as Latvia, Cyprus, Estonia and Slovenia. Professor Arturo Bris, director of the IMD world competitiveness centre, said that the UK was avoided by overseas workers “due to concerns about the quality of life in the country, fed by political fragmentation and economic problems, brought on in part by Brexit”. This, combined with the nation’s rising cost of living, which was higher in only nine countries, is attributed to fuelling the UK’s decline in labour competitiveness, according to the IMD.
Dyson: Flexible working policy will damage UK competitiveness
Sir James Dyson writes in the Times on the post-pandemic trend for flexible working, arguing that giving employees the right to work from home threatens the UK’s productivity. Such government interference in how companies are run “will jeopardise the vital in-person collaboration and momentum they need to innovate and succeed,” Sir James says. “High-growth, ambitious companies will have to think seriously before they invest in the UK.” Not only this, but the policy “will generate friction between employers and employees” and deepen the divide between workers who can’t work from home and those who can, “creating a highly invidious two-tier workforce.” Sir James concludes with a warning: “The Government should survey the international horizon. Britain is losing the race, becoming less competitive, and this policy will make us fall even further behind.”
Unite accused of ‘potential criminality’ in hotel scandal
Two separate investigations into Unite The Union have found evidence of “eye-watering” overcharging on large contracts, according to reports. Police raided the union’s London headquarters in April and now two independent reports into a multi-million pound hotel and conference centre built by the Unite union have been handed to police. Unite spent nearly £100m on the hotel complex , but two independent valuations put its worth at less than £30m. Sharon Graham, the union’s general secretary, commissioned Martin Bowdery KC to carry out an investigation after she took on the role from her predecessor, Len McCluskey, last year. A separate inquiry by Grant Thornton into Unite’s affiliated service providers was also carried out.
Big Bang 2.-0 – City set for boost as Hunt loosens financial services rule book
Dubbed Big Bang 2.0, the shake-up is more Small Bang 1.0 as Chancellor Jeremy Hunt attempts to provide a boost to the City of London today when he unveils a package of more than 30 financial services reforms in Edinburgh. The Chancellor said Brexit had provided Britain with the “golden opportunity” to reshape the rules governing the financial sector. Mr Hunt said the Government was delivering an “agile, proportionate and home-grown regulatory regime which will unlock investment across our economy to deliver jobs and opportunity for the British people”.
The Chancellor is expected to relax former EU regulations, ring-fencing rules on smaller retail banks and mandate financial regulators to focus on economic growth as well as consumer protection. EU rules which discourage companies from listing in the UK will also be overhauled. It will repeal EU regulations covering disclosure of financial products and prudential rules for banks.
Homebuyer interest declines again
The monthly survey by the Royal Institution of Chartered Surveyors reveals home buyer inquiries fell again in November, but a slower pace than in the month before. The net balance for new buyer inquiries came in at -38% on the RICS index. Although this is better than the revised -53% reported in October, it still indicates that demand for buying a home remains weak. Meanwhile, demand for rental properties continues to rise, boosted by the number of would-be buyers delaying house purchases. Inquiries from prospective tenants remained positive, with a net balance of +35% in the latest survey. Simon Rubinsohn, chief economist at RICS, said although the survey appeared “downbeat” the downturn in the housing market this time “could be shallower compared with past experiences.”
Ministers to warn over-50s they cannot afford to retire early
The Government is considering what measures it can use to persuade the over-50s not to retire early as a rising number of 50 to 64-year-olds quit the workforce. Mel Stride, the Work and Pensions Secretary, is reportedly considering asking pension providers, employers and trade unions to contact 50 to 64-year-olds to offer them a financial health check. He told MPs last week that some over-50s “may be mistakenly feeling they’re in a financially secure position that will last them right the way through to the end of their life”. The Telegraph points to analysis indicating that many over-50s could be forced back into work due to the impact of inflation.
Investors pulled £1bn from UK-focused funds last month
Figures from data provider Calastone show investors pulled a net £1.02bn from UK-focused funds in November, the second worst month for outflows on record. “Fears over the potential duration of the UK’s recession rather than hopes for inflation abating are dominating investor concerns for UK assets,” Edward Glyn, head of global markets, said. “Despite low valuations, you can barely give them away at the moment.”
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