Business News – 10th May 2017

Oil Prices

Oil Prices rose after it was reported Saudi Arabia would cut supplies to the region as OPEC battles against rising U.S. output that is threatening to derail its attempts to end a sustained global glut in crude.

Sterling Stronger.

The Pound is heading closer to $1.30 and €1.20 as confidence returns to the pound.

Bank Of England

The Bank of England is likely to revise higher its inflation outlook for the year, though Governor Mark Carney is bound to talk down expectations for a rate increase anytime soon, analysts say ahead of this week’s monetary-policy meeting. Also, the decline in German industrial production still leaves the sector in a strong position and likely to make a significant contribution to GDP growth in the first quarter.

Barclays Boss faces investor revolt

Barclays shareholders are to vote on whether to re-elect Jes Staley to the bank’s board, amid controversy over his role in a whistleblowing affair. It will be the first time Mr Staley has faced investors since it emerged he attempted to find out the identity of a whistleblower at the bank. He has apologised and referred himself to regulators over the issue. However, some investors say they will not support his re-election at the firm’s annual general meeting.

BBC news

South Korea

Liberal politician Moon Jae-in (pictured) decisively won South Korea’s presidential election on Tuesday, an expected victory ending nearly a decade of conservative rule and bringing a more conciliatory approach toward North Korea. Moon’s victory will end months of political turmoil that led to parliament’s impeachment of conservative former President Park Geun-hye over an extensive corruption scandal. “I will make a just, united country,” Moon Jae-in told his supporters. “I will be a president who also serves all the people who did not support me.”

Corbyn to hike corporation tax to 26%

Jeremy Corbyn is to announce plans to increase corporation tax from 19% to 26% by the end of the decade if he becomes PM. The money raised will be used to pay for a range of policies such as restoring student grants and providing free school meals for all primary school children. But David Gauke, the Chief Secretary to the Treasury, said: “He’s spent this damaging tax rise on businesses on 12 different things and he’s already dropped numerous things he’s said he’d do before.” Corbyn’s pledge comes after he promised a “reckoning” for tax dodgers, greedy bankers and asset strippers during the launch of Labour’s election campaign. Meanwhile, Lib Dem leader Tim Farron has also pledged a tax rise to pay for schools funding. Commenting on Labour’s tax plans, David Smith in the Times says Corbyn and John McDonnell risk killing the goose that lays the golden eggs with their pledge to increase rates for the top 5% – a move that would hurt the City just as it faces the effects of Brexit.

The Daily Telegraph, Page: 4   The Independent, Page: 1, 3    Financial Times    The Guardian, Page: 1, 2    Daily Mail, Page: 8   The Times, Page: 10   The Sun, Page: 9   Independent i, Page: 6   The Times, Page: 39

May urged to cut tax burden

A group of Thatcherite economists, academics and experts have written to the Telegraph to urge the Conservatives to prove they are the party of low tax by replacing a current “tax lock” with a pledge to keep burden below a third of national income. They say the tax burden will be higher this year than in any year under the last Labour government. The letter says: “The Prime Minister and the Chancellor can insist that theirs is a party of lower taxes all they like; the numbers don’t lie. There have been increases to the personal allowance and cuts to corporation tax, but increases in VAT, stamp duty and capital gains tax have more than offset these.”

The Daily Telegraph, Page: 5    The Daily Telegraph, Page: 15

John Lewis sets aside £36m after pay blunder

John Lewis has set aside £36m after finding it may have broken minimum wage rules. The retailer’s pay averaging system, which aims to smooth out monthly pay over the year, meant the company has been technically under-paying some staff for 6 years. The group is conducting a review with HMRC.

Financial Times, Page: 1     The Daily Telegraph, Business, Page: 1, 3     The Times   The Independent, Page: 66   Daily Express, Page: 46   Daily Mail, Page: 63   The Guardian, Page: 18   Independent i, Page: 12   The Sun, Page: 2    The Scotsman, Page: 2

Brexit funding gap a threat to growth and productivity

Billions of pounds in EU funding dedicated to supporting small firms must be replaced to avoid the risk of an economic slowdown post-Brexit, according to the latest Federation of Small Businesses (FSB) report. The FSB proposes the creation of a streamlined Growth Fund for England before the Brexit process completes to replace the £3.6bn in EU cash set aside for the funding round ending in 2020. Mike Cherry, the FSB’s national chairman, said: “This is a particularly pressing issue for the many small firms with growth ambitions and those in less economically developed regions. If the next government is serious about developing an industrial strategy that delivers prosperity across all areas of England, it must replace EU funding dedicated to small business support and access to finance after we leave the EU.”
Press Release   The Times, Page: 45   Yorkshire Post, Business, Page: 16

 Greater access to finance key for firms

Xavier Rolet, chief executive officer of LSE Group, writes in the Telegraph that businesses up and down the UK are doing vast amounts to bolster job creation and foster innovation. However, in order to keep growing they need to be able to access finance after Brexit. Meanwhile, findings from the London Stock Exchange Group’s (LSE) annual round-up of the 1,000 most dynamic SMEs show that Britain’s fastest-growing companies have seen their rate of expansion increase to 70%, up from an average of 50% a year ago. Growing fastest on a sector basis is real estate, averaging growth above 100%, with engineering and construction, financial services, marketing and advertising not far behind with growth rates averaging above 90%.

The Daily Telegraph, Business, Page: 2    The Daily Telegraph, Business, Page: 3

 Business confidence edges up

According to the ICAEW UK Confidence Monitor (BCM), business confidence has increased from -8.7 in the first quarter to 6.7 in the second quarter. Despite uncertainty surrounding Brexit, the report showed a gradual upswing in business confidence since the EU referendum, with the BCM Confidence Index being in positive territory for the first time since the second quarter of 2016.

Workers facing hefty pay cut

The National Institute of Economic & Social Research (NIESR) has warned that British workers will see their disposable incomes shrink this year as a result of rising inflation that will peak at 3.4%. NIESR said that despite the squeeze on disposable incomes the GDP growth rate would pick up from 1.7% this year to 1.9% in 2018. It said moves towards Brexit since the vote to quit the EU last June had made little impact on its forecasts. It added that politicians needed to up investment to boost the economy, raise productivity and capitalise on export opportunities generated by Brexit.

The Guardian, Page: 18   The Daily Telegraph

Bad jobs harm growth and make people miserable

Matthew Taylor, who is heading up a government review into the gig economy, has said low quality and unproductive jobs frustrate workers and are harmful for the economy. Businesses need to step in and help drive optimism and engagement which in turn increases productivity, he said.

The Daily Telegraph

Expert panel supports rates freeze

The Times’s panel of shadow policymakers voted for no change to interest rates this month citing slow growth and weak wages, but there was increased support for an immediate increase. PwC adviser Andrew Sentance, a former MPC member, said a resilient global economy and reasonable UK growth meant there was “no reason to hold back from the start of the process of normalising interest rates.”

The Times, Page: 35

Previous News pages

Business News – 9th May 2017

Business News – 8th May 2017

Business News – 5th May 2017

Business News – 4th May 2017

Business News – 3rd May 2017

Business News – 2nd May 2017

Business News – 28th April 2017

Business News – 27th April 2017

Business News – 26th April 2017

Business News – 25th April 2017

Business News – 24th April 2017

Business News – 21st April 2017

Business News – 20th April 2017

Business News – 19th April 2017

Business News – 18th April 2017.