Business news 10 January 2025

Interest rates, a spring Budget? job vacancies, remote work, tax, price rises, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Rate-setter backs ‘gradual’ cuts
Bank of England rate-setter Sarah Breeden expects to back “gradual” interest rate cuts this year, saying that with inflation falling faster than expected in 2024, the Bank will be able to continue lowering borrowing costs. Ms Breeden, a member of the Monetary Policy Committee, said: “The recent evidence further supports the case to withdraw policy restrictiveness and I expect to continue to remove restrictiveness gradually over time.” Noting that she had been concerned that inflation might become “entrenched” due to strong demand in the economy, Ms Breeden added: “It is clear to me that the risk of that upside scenario has now subsided sufficiently to no longer be a core consideration in setting policy.” Financial markets expect the Bank to cut interest rates twice in 2025 amid lingering concerns about the persistence of inflation.
Spring Budget may be on the cards, says Abrdn
Abrdn, an investment company and asset manager, has predicted that Chancellor Rachel Reeves may have to hold a Budget in March to reevaluate Government spending and settle investors’ nerves. The warning came as UK government bond yields surged higher and the pound slumped. Matthew Amis, an investment manager at Abrdn, said the volatility showed “investors need confidence” to buy government debt otherwise “gilt yields will continue to move higher and the currency will continue to weaken.” Noting that a spending review is not due until June, he said: “That’s a long time for the market to speculate with confidence continuing to erode.” He added that Abrdn expects to see a Budget this spring, alongside Office for Budget Responsibility forecasts, where the Chancellor “signals greater cuts to Government spending.”
Economists predict 2.5% interest rate
Experts at Oxford Economics predict that interest rates will fall to 2.5% by late 2027. This is far lower that market consensus, with most analysts suggesting that rates will fall to 3.75% by the end of 2025 and settle at around that level. Andrew Goodwin, chief UK economist at Oxford Economics, who says the economic research firm is anticipating lower inflation than financial markets are, says demographic changes are likely to play a part in delivering lower rates.
Permanent job vacancies slip
The UK job market is experiencing significant challenges, with permanent job vacancies declining at the fastest rate since August 2020, according to the latest report from KPMG and the Recruitment and Employment Confederation (REC). The analysis shows that December marked the 14th consecutive month of declining vacancies. The fall is attributed to rising National Insurance contributions, which are set to increase by £25bn in April. The hike is causing many employers to hesitate when it comes to hiring. Despite these challenges, Jon Holt, KPMG’s group chief executive, noted that wage inflation is rising, suggesting ongoing demand for workers. “As 2025 progresses and UK economic growth picks up, businesses will need new talent. Salary inflation being at its steepest in four months shows they are still willing to compete for it,” he commented. Neil Carberry, chief executive of the REC, said: “December is always a hiring low point, and a new year brings new hope – with inflation under control, low unemployment and economic growth expected, the fundamentals are better than many appreciate.”
Employers tighten grip on remote work
Flexible working arrangements are being curtailed by several large employers as they enforce stricter office attendance policies. A September 2024 survey of 150 financial services companies by KPMG found that bosses were considering a range of methods to track attendance in the office, with some companies saying they would consider using monitoring devices to ensure employees were at work. As firms navigate these changes, the balance between office presence and employee satisfaction remains a critical issue. Employment lawyer David Palmer notes that while companies can mandate office attendance, they must consider reasonable adjustments for employees with disabilities.
Markets
Yesterday, London’s blue-chip stocks were higher, but fresh declines in the pound and concerns over the bond market weighed on domestically-focused shares. The FTSE 100 closed up 0.83% at 8319.69 and the Euro Stoxx 50 closed up 0.43% at 5017.91. Overnight in the US the S&P 500 rose 0.16% to 5918.25 and the NASDAQ fell 0.06% to 19478.88.
This morning on currencies, the pound is currently worth $1.230 and €1.194. On Commodities, Oil (Brent) is at $78.71 & Gold is at $2681. On the stock markets, the FTSE 100 is currently down 0.24% at 8299 and the Eurostoxx 50 is flat at 5018.
European stock slipped, tracking losses in Asian equities ahead of US jobs data that will help shape the outlook for interest rates. The jobs report at 8:30 a.m. New York time will set the tone for trading today.
The pound is slipping further against the dollar and UK bond yields are rising anew as investors show their skepticism about Chancellor Rachel Reeves’ budget plans.
Climate
Global temperatures in 2024 exceeded the internationally agreed target of 1.5°C above pre-industrial levels for the first time. According to new data from Copernicus, the EU’s climate agency, average temperatures were 1.6°C higher than between 1850-1900. The agency’s director said he was “running out of metaphors” to describe the extent of warming.
Environment Secretary apologises over tax ‘shock’
The Environment Secretary, Steve Reed, insists the recent financial struggles of farms are “nothing to do with” inheritance tax changes, attributing the issues to a lack of profitability in the sector, but apologised for the “shock” caused by increased taxes and the phaseout of EU subsidies. Mr Reed, who acknowledged the need for reforms to restore profitability, told farmers that the Government was “shocked by the size of the financial black hole we were left to fill.” He added: “I’m sorry if some of the action we took shocked you in return.” Farmers are calling for a consultation on the inheritance tax changes and faster payments for environmental schemes, as they face ongoing challenges from adverse weather and post-Brexit trade issues. Tom Bradshaw, president of the NFU, noted that while no farms are currently going bust due to the Budget, the situation could change once the new policies take effect next year. This came as farmers took their protests over the tax plans to the Oxford Farming Conference, with tractors lining the streets outside. Further action planned for next week will target supermarkets, with farmers set to park outside stores and detail their concerns to shoppers.
Tax raid set to drive price hikes
Inflationary pressures are likely to persist as firms increase prices in response to tax hikes set out in the Budget, according to a Bank of England poll of finance chiefs. December’s survey shows that expected price growth for the year ahead increased to 4%, with this up from 3.8% in November and the highest level since April. It was also shown that realised price growth in the year to December increased to 4%, up from 3.7% the month before. While realised annual wage growth dipped to 5.3% in December, expected wage growth for the coming year increased for the first time since July, hitting 3.9%. More than half (54%) of finance directors indicated plans to raise prices to counteract higher tax payments, while 64% expect profit margins to shrink. The survey also revealed that 53% of plan to lay off staff. Inflation remains a concern, with companies expecting to raise prices by an average of 4% and inflation projected to stay above the Bank’s 2% target.
Shop prices set to rise
Shop prices are expected to increase this year as businesses respond to rising costs due to measures set out in the Budget. The British Retail Consortium (BRC) forecasts an average food price rise of 4.2% in the latter half of 2025. Helen Dickinson, chief executive of the BRC, said: “As retailers battle the £7bn of increased costs in 2025 from the Budget, there is little hope of prices going anywhere but up.” Retailers have urged ministers to ease their tax burden, saying the cost of items in stores are likely to rise as companies grapple with higher employment costs. Meanwhile, a report from Grant Thornton shows that 54% of firms are contemplating price hikes due to the Budget.
Nightclubs face tax hike hit
Impending tax hikes could push many nightclubs “to the brink of closure,” according to Michael Kill, head of the Night Time Industries Association, who has warned that the current uncertainty is “more concerning than anything we saw during the pandemic.” The recent Budget has proposed an increase in employers’ National Insurance contributions from 13.8% to 15%, alongside a rise in the national minimum wage and reduced business rates relief. Mr Kill emphasised that the additional financial burden from these planned tax increases could lead to closures, as many venues have already exhausted all avenues to cut costs.
Sainsbury’s
Sainsbury’s hailed another Christmas period of market share gains and the grocer said it expects annual profit at the mid-point of guidance. In the 16 weeks to January 4, its third-quarter, total retail sales advanced 2.7% year-on-year. The measure excludes fuel. Including fuel, sales were flat. Excluding fuel again, like-for-like sales rose 2.8% on a year prior. For the Sainsbury’s brand alone, sales rose 3.7%, including a 4.1% rise in the grocery offering. Sainsbury’s general merchandise & clothing sales fell 0.1%.
TSMC
Taiwan Semiconductor Manufacturing posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom. The world’s largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year.
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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!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.