Business News 10th July 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Monday 10th July 2017 for its members and visitors.

Markets Round up

Friday the FTSE100 was up 0.2% to 7350.9.  The market was boosted by rumours of takeover bids for Centrica, the owner of British Gas, from a number of different foreign players. Centrica rose 2.9%. Easyjet was also up 5.3% on the back of impressive passenger numbers and a 3.3% drop in the brent oil price to $46.59. Royal Mail however was one of the biggest fallers, falling 3% after a ratings downgrade from swiss bank UBS. In the US, non-farm payrolls comfortably beat expectations of a 177,000 rise, rising 222,000 as a signal of economic health. US shares reacted positively with the S&P500 rising 0.6% to 2425.2  and the Nasdaq rising 1% to 6153. Asian Shares continued the positive reaction with the Nikkei up 0.76% to 20081 and the Hang Sang up 0.66% to 25509 as china inflation data came out in line with expectations. Oil shares are having a mini bounce from Fridays fall and Gold has fallen to its lowest level in four months at $1208. The US dollar was stable against most major currencies, the Japanese Yen was at it’s weakest level in 2 months at 114 to the dollar.


Tesla model 3’s start rolling off the production line but the company has been hit by Volvo’s announcement that all their cars will be electric or hybrid by 2019.

Household spending

According to the Visa consumer spending index, household spending is falling at the fastest rate in 4 years as inflation and economic concerns are hitting consumer spending on furniture, clothing and going out. Spending fell 0.3% from April to June compared to last year. The biggest drop since 2013’s third quarter.

France lures City business with tax cuts

French Prime Minister Édouard Philippe has announced new tax initiatives to attract bankers and traders as Paris tries to persaude banks to move operations to France with Brexit approaching. France has said it will not apply their highest bracket of a payroll tax to banks and other financial companies, reduce regulation on bankers’ bonuses, and scrap a levy on intraday trading, Mr Philippe said. He said that the basic corporate tax rate would be reduced from 33% to 25%, and the 20% payroll tax that companies paid on salaries of more than €152,122 a year would be cut to 13.6%.

Self employed workers may be recategorised

The Saturday Times reported that it had seen a leaked report which suggests the Chancellor may be given room to raise more taxes from the self-employed. A draft copy of a report into the gig economy urges the government to create a new category of worker where individuals are eligible for certain rights but are not employees. The Times claims the report will be welcomed in the Treasury as it suggests that the government must do more to equalise taxes between the employed and self-employed. However, the report makes no specific suggestions about what taxes could be charged.  The Sunday Telegraph reports that the Taylor report on modern working practices will call for clearer distinctions between employees, the self-employed and workers and lay down minimum wage rules which reflect different working arrangements, such as flexibility or dependence on a single employer. More people would work in the gig economy if employment rights and job security were improved, according to a survey by PwC. The study showed that most preferred full-time employment, but almost half would consider short-term, casual work offered by gig firms, which currently operate typically in the delivery or taxi trades.

Ministers rule out business hopes of transitional Brexit deal

Brexit secretary David Davis has dismissed calls from business leaders calling for the UK to stay in the EU customs union and single market for an undetermined period following Brexit. The CBI on Thursday said such an arrangement should be put in place until a trade deal was in force, but Mr Davis, speaking at Chevening House in Kent, dismissed the idea, reportedly telling attendees creating a situation which looked like Britain had not really left the EU would bring a political backlash. However, the industry figures said ministers are listening to their concerns. FSB policy director Martin McTague said: “I was very encouraged that government ministers seemed in listening mode and committed to achieving a pro-business Brexit. They made clear at the meeting, which included a number of big business leaders, that the needs of SMEs would be top of the priority list when looking at our future outside of the EU.”

Growth fears as output falls

Output in Britain’s manufacturing and construction industries fell in May, according to the ONS. Manufacturing output fell 0.2% month-on-month in May, below economists’ expectations of a 0.3% growth, while the construction industry dropped 1.2% on top of April’s 1.1% decline. Experts had forecast 0.5% growth. Industrial production fell 0.1% over the period when it was predicted to expand by 0.4%. The ONS said the largest contributor to the fall was from carmakers, where output slid by 4.4%. ONS economists say Q2 GDP growth will struggle to improve on the 0.2% achieved in Q1, which was down from 0.7% the previous quarter

Tax policies hurt traditional families

New research by the Institute for Fiscal Studies shows the income of families with stay-at-home mothers is no higher than it was 15 years ago, while the incomes of families with two working parents are 10% higher than in 2002-03. The IFS said that the discrepancy was due to the disproportionate increase in women’s wages while men’s wages had barely risen. But campaigners blamed a series of tax measures that have benefited two earner families. Laura Perrins, co-editor of the Conservative Woman website, called for tax breaks for mothers who stay at home. She said: “Clearly, the punishment of traditional one-earner, one-carer families in the tax and benefit system is really hurting children and pushing them into relative poverty. This needs to be reformed, and tax allowances should be shared.”

Banks back proposals to protect small businesses

Leading bankers including John Flint, the head of HSBC’s retail banking arm, and Virgin Money chairman Glen Moreno, have backed a report from the BankingFutures initiative urging the government to revamp the Financial Ombudsman Service so more SMEs can secure redress from banks. The report also calls for lenders to obtain the consent of small firms before their loans are sold off to investors and for the government to create a new Financial Tribunal. Mike Cherry, the national chairman of the FSB, said: “We need to create an environment where small businesses are fully aware of all the finance options available to them and understand exactly what they’re signing-up to when they take out a loan.”

Small firms’ confidence dives

The latest SME Confidence Tracker from Bibby shows business confidence is down by nine points compared with the start of the year. Fifty-nine per cent of respondents said that uncertainty caused by Brexit is damaging to the government’s ambition for a more productive and prosperous economy and only 40% said they were expecting sales to increase over the next three months, down from 49% in Q1. A lack of skills in the UK workforce and business rates are also a key priority for SME owners.

Third of firms want to stay in EU

The British Chambers of Commerce has claimed that more than a third of British businesses want the UK to remain in the single market and customs union. The majority of the 2,400 firms surveyed said they believed that leaving the EU without a deal was not an option.

Business leaders’ confidence falls

Confidence among financial chiefs has fallen following the June general election, according to a report from Deloitte. The survey of FTSE 350 CFOs showed 42% were more pessimistic about company prospects in the second quarter, up from 17% in the first three months of 2017. Only 18% reported a brighter outlook in the second quarter, down from 31% the previous three months. David Sproul, senior partner at Deloitte, said: “Business sentiment is highly sensitive to political developments and surprises.” Ian Stewart, chief economist at the firm, added: “A drop in confidence is understandable. Chief financial officers are also more focused on the prospect of slower UK growth.” Elsewhere, Grant Thornton found confidence subdued with companies’ outlook diverging sharply from sentiment on the Continent. Finally, BDO’s monthly business trends report showed that firms expect order books to shrink over the coming three months. Its output index fell to 94.9, below the 95 level that separates expansion from contraction for the first time in four years.

Low cost start-ups

A survey by Yell Business reveals starting a small business needs less capital that most people think, with four out of 10 start-ups founded with just £500 or less and a third start with £250 or less. Yell marketing director Mark Clisby said Britons worried by a lack of money or the risk of failure should not be deterred: “Low start-up costs and high success rates should inspire budding entrepreneurs.”

Global market awaits you, says Fox

Liam Fox is helping 100,000 UK small businesses cash in on a £2bn Brexit exports bonanza, the Sun reported on Sunday. The trade secretary said: “We want to help businesses set their sights on the global market. There has never been a better time to export and join the thousands of other British businesses that are doing just that.”

Benefits of an out of town location

The Guardian examines the benefits of setting up a small business outside of a large city. Pros include less intense competition, lower costs, security, particularly relating to potential terrorist attacks, lower charges for clients due to reduced overheads, and a better quality of life. “A hectic city can bring an extra level of stress you could do without, while basing your business elsewhere could give you a more pleasant, healthy and productive working environment.”


The G-20 summit ended with May saying she had been “struck by the strong desire to form ambitious new bilateral trade partnerships,” calling this a “powerful vote of confidence” in Britain.        U.S. President Donald Trump said at a meeting with May that their two countries are “working on a trade deal, a very, very big deal, a very powerful deal.” Trump spoke of striking the deal “very, very quickly.”

Student Debt

Labour’s “ambition” to clear UK students of their debt burden would cost £100bn, shadow education secretary Angela Rayner said today.


Teresa May publishes her repeal bill to parliament today. This is a major step in legislation process of Brexit as it works to convert EU law into UK law and makes up any legal gaps where necessary.  It is anticipated that Teresa will seek cross party support to prevent a rebellion from factions within her own party.

Brexit Breakfast Bumped!

KPMG has calculated that the cost of a family breakfast could rise by almost 13% from £23.59 to £26.61 following Brexit if Britain defaults to WTO rules. The firm made the calculations by taking the cost of mid-range ingredients of a fry-up from a UK supermarket and applying the current EU external customs tariffs to each product.

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Business News 7th July 2017

Business News 6th July 2017

Business News 5th July 2017

Business News 4th July 2017

Business News 3rd July 2017

Business News 30th June 2017

Business News 29th June 2017

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Business News 23rd June 2017

Business News 22nd June 2017