Business news 11 February 2025
Recession risk real. Retailers at risk. Repossessions rise. Consumer spending markets, AI, OBR, tariffs, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Recession risk real, economists warn
Official figures due later this week are expected to show that the UK economy contracted in Q4, shrinking by 0.1% in the three months to December. Warning that there are “few signs of a turnaround” so far in 2025, analysts at Capital Economics said: “The risk of a recession, albeit a mild one, is real.” While he expects the data to reveal a decline in GDP, Rob Wood, chief UK economist at Pantheon Macroeconomics, notes that a “small upward revision to November’s GDP would be enough to avoid GDP falling in Q4 as a whole.” He added that economists “remain optimistic that growth will rebound,” with wages rising strongly and consumers “scaling back their saving, supporting consumption.”
Retailers at risk without business rates rethink
Retailers have told Chancellor Rachel Reeves that the sector faces a “perfect storm of additional costs” due to measures set out in the Budget, with 300,000 jobs set to go by 2028. The Retail Jobs Alliance (RJA) – which includes Marks & Spencer, Tesco, Sainsbury’s, B&Q-owner Kingfisher, Morrisons, Primark and Asda – says firms will be hit by tax hikes and has called for shops to be protected from higher business rates. This, the RJA argues, “would provide much-needed relief for at-risk stores.” Confederation of British Industry chief executive Rain Newton-Smith has called for “decisive action” that must include “fixing our punishing business rates system – fast.” Helen Dickinson, chief executive of the British Retail Consortium, says the Budget will add over £7bn to retailers’ bills in 2025, leaving them with “difficult decisions about future investment.”
Repossessions rise but arrears decline
Data from UK Finance shows that repossessions were up 12% in Q4 compared to Q3, with more than 1,030 residential properties taken over in the last three months of 2024. On a year-by-year basis, repossessions increased by 54% in Q4. Buy-to-let mortgage repossessions were up 30% year-on-year in Q4. The data also shows that there were 92,170 homeowner mortgages in arrears in Q4, marking a 2% fall from Q3. The number of buy-to-let mortgages in arrears also fell, dipping 3% to 12,610. As a proportion of loans, 1.06% of homeowner mortgages and 0.65% of buy-to-let home loans are in arrears. Charles Roe, director of mortgages at UK Finance, said: “Having peaked in Q1 2023, arrears appear to now be on a confirmed downward trend.” “This reflects the fact that, while pressures remain, the challenges of higher interest rates and cost of living increases have begun to ease,” he added.
Consumer spending climbs
Consumer spending increased at the fastest rate in two years last month, with data from the British Retail Consortium and KPMG showing that retail sales climbed 2.6% year-on-year in January. This was up from the 1.2% increase recorded in January 2023 and marks the strongest increase in nearly two years. Elsewhere, Barclaycard found that credit and debit spending rose by 1.9% in the year to January, with this the highest increase since March 2024.
New home completions down 7% in 2024
The number of new home builds completed in 2024 was 7% down on the previous year, according to the National House Building Council (NHBC). Data shows that there were 124,144 new home completions last year, compared with 133,611 in 2023. The analysis also shows that 104,232 new homes were registered to be built in 2024, with this close to the 105,071 registrations logged in 2023. Private sector registrations were up by 11% annually last year, hitting 68,987. In the rental and affordable sector, registrations fell by 18% to 35,245 in 2024. NHBC chief executive Steve Wood said: “While house building activity has remained broadly level with 2023, it is positive to see increased activity in the private sector.”
Markets
Yesterday, the FTSE 100 closed up 0.77% at 8767.80 and the Euro Stoxx 50 closed up 0.62% at 8358.30. Overnight in the US the S&P 500 rose 0.67% to 6066.44 and the NASDAQ rose 0.98% to 19714.27.
BP saw its share price rise as much as 7% after Bloomberg reported that Elliot Investment Management had built a ‘significant stake’, calling on the firm to consider transformative measures.
All this despite Trump imposing 25% tariffs on Steel and Aluminum and the EU promising retaliation. Go figure? Investors appeared to have shrugged off concerns surrounding renewed trade tensions.
Starmer has been warned that Trump’s tariffs on British steel ‘will be a devastating blow’ to the industry.
This morning on currencies, the pound is currently worth $1.2375 and €1.198. On Commodities, Oil (Brent) is at $76.95 & Gold has rallied to record levels on current uncertainty and is at $2900. On the stock markets, the FTSE 100 is currently up 0.04% at 8770 and the Eurostoxx 50 is up 0.06% at 5362.
Britain is ‘sleepwalking into pensions crisis’
Standard Life chief executive Andy Curran has warned that Britain is facing a pensions crisis, with the minimum savings level of 8% through the auto-enrolment scheme “simply not enough for most to achieve an adequate retirement income.” With the industry concerned by the Government’s decision to indefinitely delay a review of auto-enrolment, Mr Curran said: “The UK is sleepwalking towards a pensions crisis hidden in plain sight and is less than two decades from reaching boiling point.” Research from Phoenix Insights – part of Standard Life’s parent company Phoenix – suggests that as many as 17m adults are not saving enough.
OpenAI
An Elon Musk-led consortium has offered to buy the non-profit that controls OpenAI and ChatGPT for $97.4 billion, escalating the battle between the billionaire and the AI company that he helped found before leaving in 2019. OpenAI CEO Sam Altman said the company is “not for sale.” offering instead to “buy Twitter for $9.74 billion if you want”. .It looks like the billionaires can’t see AI to AI.
AI ambition could be hit by tech skills gap
The UK is facing a shortage of skilled professionals in the tech sector, according to a report from HR platform Deel. The analysis shows that IT, tech and AI positions are currently the hardest to recruit for, with 43% of business leaders considering hiring talent from overseas. The shortfall could hurt the Government’s drive to create over 13,000 jobs in the tech sector through its AI Opportunities Action Plan. Matt Monette of Deel warns: “Without the right talent the country’s ambitions could be at risk, potentially stalling the UK tech sector’s growth and competitiveness.”
1.1m taxpayers miss self-assessment deadline
More than 1.1m taxpayers are facing penalties for late self-assessment tax returns, according to research from Blick Rothenberg. Robert Salter, a director at the firm, said the situation is a “major concern” for the Treasury, as late filings nearly doubled compared to the previous year. The self-assessment process encompasses income tax, National Insurance, and capital gains tax, contributing to a significant portion of the UK’s £39.8bn tax gap. Taxpayers who miss the deadline will incur an initial £100 penalty, with additional charges accruing over time, potentially leading to penalties of up to £1,500.
Farmers protest IHT plan
Farmers have taken to the streets of Westminster to protest against proposed reforms of inheritance tax that would impose a 20% tax rate on farm assets worth more than £1m. Treasury Minister James Murray has warned the current inheritance tax exemption for farmers is “skewed towards the wealthiest estates,” with Government data showing that 117 estates claimed £219m of relief.
OBR ‘vulnerable to bias’
An independent review has found that the Office for Budget Responsibility (OBR) is “vulnerable to bias” due to its reliance on optimistic government assumptions. Laura van Geest, who led the review, highlighted that the OBR’s economic forecasts are “open to gaming” because they must accept government policy announcements at face value. Ms Van Geest warned that the current forecasting process could lead to higher taxes or deeper spending cuts if it continues to rely on Treasury assumptions.
MPs’ pay to increase to £94k
MPs are in line for a 2.8% pay rise this year, the Independent Parliamentary Standards Authority (IPSA) has announced, with the increase taking their wages to £93,904. IPSA said the increase is “in line with government pay recommendations for public sector workers,” while chairman Richard Lloyd said the pay proposal “recognises both the vital role of MPs and the current economic climate.” John O’Connell, chief executive of the TaxPayers’ Alliance, criticised the proposal, saying it “will be a bitter pill to swallow.” He added: “MPs are guilty of delivering a record high tax burden, persistent inflation and struggling services, yet are now being rewarded for this catalogue of failures.”
US faces China tariffs
China is imposing a 15% border tax on imports of US coal and liquefied natural gas products, while American crude oil, agricultural machinery and large-engine cars now face a 10% tariff. This comes after US President Donald Trump imposed levies of 10% on all Chinese products. China has filed a complaint with the World Trade Organisation, saying the US import taxes are “discriminatory and protectionist” and violate trade rules.
BYD
BYD, the Chinese electric-vehicle company, unveiled a new self-driving system called “God’s Eye” that it plans to enable in almost all of its new cars, describing it as “Autonomous driving is for everyone”
Latest Insolvencies
Appointment of Administrator – ORIGAMI ENERGY LIMITED
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Appointment of Liquidators – TREGUNTER PARTNERSHIP NOMINEE 2 LIMITED
Appointment of Liquidators – SURJYA GHOSH LIMITED
Appointment of Liquidators – GLENFROME LIMITED
Appointment of Liquidators – MABWARE LIMITED
Appointment of Liquidators – SEHER LTD
Appointment of Liquidators – LENNOX NOMINEE LIMITED
Appointment of Liquidators – GARRATT SOLUTIONS LTD
Appointment of Liquidators – THE SERVICE DESIGN COMPANY LIMITED
Appointment of Liquidators – MARY RHODES LIMITED
Appointment of Liquidators – SKYNETTECH CONSULTING LTD
Appointment of Administrator – S I R JOINERY LTD.
Appointment of Liquidators – NATURAL WINDOWS & DOORS LIMITED
Appointment of Liquidators – K2P2 CONSULTING LTD
Appointment of Liquidators – DH 101 LIMITED
Petitions to wind up (Companies) – LISA BATHROOMS LTD
Petitions to wind up (Companies) – LOXLEY FOOD SERVICE LTD.
Petitions to wind up (Companies) – COMMONSIDE TRADERS LTD
Petitions to wind up (Companies) – RIVAL CONSTRUCTION (LONDON) LTD
Petitions to wind up (Companies) – MOTORSTART LIMITED
Petitions to wind up (Companies) – ZERTTEW GLOBAL LTD
Petitions to wind up (Companies) – AJ RAIL AND CIVIL ENGINEERING LIMITED
Appointment of Liquidators – SG (MARITIME) LEASING LIMITED
Appointment of Administrator – N.E. SERVICES LIMITED
Appointment of Liquidators – MOD2 LIMITED
Appointment of Liquidators – LIGHTS, CAMERA, ACTON LIMITED
Appointment of Liquidators – PICTON CASTLE DAIRY LIMITED
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.