Business news 11 March 2024

Wage growth and demand for staff falls. Voters expect taxes to rise despite Budget’s NI cut. Services exports climb despite post-Brexit trade barriers. And more business news that we thought would interest our members.

James Salmon, Operations Director.

Wage growth and demand for staff falls

The rate of growth in starting salaries has slipped to its slowest pace in nearly three years, according to analysis by the Recruitment and Employment Confederation (REC) and KPMG. The index gauging the rate of growth in starting salaries fell to 55.2 in February from 55.8 in January. February’s index remains above the 50-point threshold that separates growth from contraction, meaning that starting continued to rise but at a slower rate. The number of people recruited into permanent jobs fell for the 17th consecutive month, with the decline linked to recruitment freezes, delays around hiring decisions and fewer job vacancies as a result of the weaker economic outlook. The total vacancy index, which measures demand for permanent and temporary staff, fell well below the 50-point mark, slipping to 46.9 from 49.4. While permanent hiring contracted substantially, hitting 43.6, the temporary hiring index fell to 46. Neil Carberry, chief executive of REC, said: “Given recent news about GDP dropping, this overall picture is no surprise – but it is certainly still quite resilient by comparison with previous recessions.” On the impact of last week’s Budget, Jon Holt, chief executive and senior partner of KPMG, said: “Businesses would ideally have liked a Budget that drives investment, boosts economic growth and helps productivity bounce back. While it was encouraging to see measures to increase labour supply, there was limited headroom for change.”

Labour ‘under no illusions’ about public finances

Shadow Chancellor Rachel Reeves has pledged an “initial injection” of funding into public services should Labour win the next election but has warned that the party will not be able to “turn things around straight away.” Ms Reeves told the BBC’s Sunday with Laura Kuenssberg that she was under “no illusions” about the challenges ahead, saying Labour would inherit the worst economy since World War Two. “I do know that public services need more money – that’s why we will make that initial injection,” she said. Ms Reeves also said Labour would boost growth through its £7.3bn investment in a National Wealth Fund. Responding to Ms Reeves’ comments, the Chief Secretary to the Treasury, Laura Trott, said Labour is unable to say how it would pay for its “unfunded spending commitments,” adding: “That’s because they don’t have a plan to pay for it and that means higher taxes, taking us back to square one.”

Voters expect taxes to rise despite Budget’s NI cut

An Opinium survey for the Observer suggests Chancellor Jeremy Hunt’s Budget has backfired, with more voters believing it will increase taxes overall rather than result in tax cuts. Despite a two percentage point cut in employees’ National Insurance contributions, economists and think-tanks have pointed out that other measures in the Budget, such as freezing tax thresholds, have led to an overall increase in taxes. Asked whether they thought that levels of tax had gone up or down as a result of the Budget, 31% of respondents said they believed they had gone up despite the National Insurance cut, with just 17% believing they had gone down and 29% saying they had not changed. James Crouch, head of public affairs and policy at Opinium, said: “Few were expecting one Budget to turn around a double-digit polling deficit but Jeremy Hunt will be disappointed that the headline tax-cut he spent so long trying to find headroom for has failed to register.”

UK has to get on war footing for economic growth

Former Prime Minister Gordon Brown believes Britain must be put on a “war footing” to “break free from the vicious low growth, low productivity, and low wage cycle,” arguing that the Treasury must be fully committed to a growth strategy and not sit in a “comfort zone” that concentrates on balancing the books and reducing the national debt. In a speech to the Institute for Government think-tank, he will call for the creation of a National Economic Council that would be chaired by the Prime Minister and Chancellor and aim to deliver annual growth of 3%.

Economy likely to be ‘unexpectedly strong’ this year

The UK economy is likely to be among the fastest growing in the world this year, according to Steven Bell, chief economist at Columbia Threadneedle. He believes falling inflation and increases in real incomes will boost the economy. Mr Bell also suggested that the cut in National Insurance announced in the Budget will help stimulate the economy. However, Konstantinos Venetis, senior economist at Global Data TS Lombard, believes that tax cuts set out in the Budget will lead to lower government infrastructure spending, adding that this will cap the extent to which the economy can grow. Robert Alster, chief investment officer at Close Brothers Asset Management, said the measures announced in the Budget are likely to boost GDP growth very modestly.

Sterling outshines rivals as UK economy holds up better than expected

Sterling has gained 0.9% against the dollar so far this year, making it the only major developed world currency to do so in 2024. It is beating 90% of world currencies in 2024 as the economy is performing better than expected.


Oil Prices edged down to $82 a barrel on Friday. Rising tensions in the Middle East were offset by increased oil production. Traders have been keeping a close eye on Chinese economic health, Middle East tensions, and OPEC production cuts.


Gold prices broke yet another record on Friday, hitting the $2,170 mark. The price is on track to advance more than 3% this week. Recent positive comments from Jerome Powell and US jobless claims coming in slightly higher than expected, has put new life into the price of Gold since the middle of February.


Water Companies will invest more than £180 million to tackle sewage spills, the UK government has announced. The fast-tracked investment made by several water companies in England will support the effort to roll out storm overflow prevention measures by April 2025. These include artificial intelligence systems, accelerated wetland programmes, installing new in-sewer monitors and recruiting and training specialist staff. The government said it expects the measures to prevent more than 8,000 spills polluting English waterways. Severn Trent will invest £41 million, while United Utilities Group will invest £39 million.


Currys noted that Elliott Advisors withdrew its intention to make a full takeover offer. The US activist investor said this followed multiple attempts to engage with Currys’ board, all of which were rejected. Due to this rebuffing, Elliott said it is “not in an informed position to make an improved offer for Currys on the basis of the public information available to it”.

Services exports climb despite post-Brexit trade barriers.

The Office for Budget Responsibility (OBR) has hailed the success of services exports despite an increase in post-Brexit trade barriers. OBR data shows that overseas sales of services – such as management consulting and research and development – have grown faster than in any other major economy, having climbed by 12% since 2019 compared to the 9% average across other G7 countries. However, OBR analysis also shows that growth in the trade of UK goods – both imports and exports – had “fallen well behind the rest of the G7.” The OBR notes that exports of financial services such as banking and insurance have also lagged and “are likely to have been impacted by Brexit frictions.” Thomas Sampson of the London School of Economics said: “Services trade seems to have held up well, whereas goods trade has been harder hit, particularly for small exporters who are struggling with the new red tape required to export to the EU.”

Higher taxes and wages to hit the high street

High street businesses are set to face a double whammy of higher property taxes and wage increases. Business rates will go up by 6.7% on April 1, an increase that will cost firms in England an extra £1.7bn. Meanwhile, the minimum wage will rise to £11.44 an hour from £10.42 for those aged 23 and over and from £10.18 for 21 and 22-year-olds. On business rates, Kate Nicholls, chief executive of UK Hospitality, said it is “fundamentally a broken system,” adding: “It’s been needing reform for quite a number of years and really is a priority as we go into the next election.” Helen Dickinson, chief executive of the British Retail Consortium, said ministers have had five years “to fix the problems with business rates, as they promised in their election manifesto.” “This is disproportionate, destructive, and any Government that is serious about growing the economy must address this as a matter of urgency,” she added.

Who is bearing the brunt of Britain’s rising tax burden?

Office for Budget Responsibility analysis shows that taxes are set to rise to 37.1% of national income by 2029, with this the highest level since 1948. Tom Calver in the Sunday Times says that while the overall tax burden is rising, “the reality is that the tax bill is becoming ever more lopsided” and upper-middle earners are “locked into a high-tax future.” James Smith, research director at the Resolution Foundation, says the sum total of tax rises in recent years is “really concentrated at the top,” while Carl Emmerson, deputy director of the Institute for Fiscal Studies, notes that far more people are paying income tax than ever before. Mr Calver says that while taxing the very top of earnings makes sense, “the problem is that the top 1% – although they pay a lot of tax – tend not to follow the laws of income tax like the rest of us.”

Workers to trial four-day week

A number of British workers are set to trial a four-day week for a month in August. The “4ugust” trial, launched by the 4 Day Week Campaign and Autonomy, aims to encourage companies to implement a four-day week while maintaining salaries. The campaign wants to see a 32-hour working week after previous trials saw positive results, including lower stress levels and improved staff retention. The six-month pilot in 2022 involved 61 companies with more than 3,000 staff. Of these firms, at least 54 have maintained the four-day week. The Department for Environment, Food and Rural Affairs last year called for a pilot scheme involving more than 21,000 employees, with no loss of pay, after the successful trial in the private sector. While Will Stronge, director of research at Autonomy, said 4ugust was an opportunity for companies “to dip their toes in the pool” and try a four-day week for a limited time, firms including PwC have already introduced reduced summer working hours.

Banks stand out for conflicts with staff over remote working

Staff at several banks and financial services firms are at odds with bosses who are demanding they work in the office more often, with some monitoring attendance and threatening disciplinary action for noncompliance.

More empty office space in New York than London

While a surge in remote and hybrid working means that the amount of empty office space in London and New York has risen sharply since the beginning of the pandemic, the difference in office occupancy rates in the two cities has never been greater. Data from real estate analytics group CoStar shows that 14% of New York office space is currently unoccupied, up from a pre-pandemic rate that was below 9%. In London, the current rate stands at 9.2% compared to just over 5% at the start of the first lockdown. CoStar expects the vacancy gap between the two cities to widen further, estimating that almost a fifth of all office space in New York will be empty by 2026, compared with just over 12% in London.

M&S boss: Interest rate hikes were ‘totally ineffective’

Marks & Spencer chairman Archie Norman says the Bank of England’s interest rate hikes have been “totally ineffective” and have done little to cool price increases. Arguing that the Bank’s efforts have only had a “marginal effect” in helping inflation fall to 4% in January from a peak of 11.1% in October 2022, he said the decline is more to do with broader economic trends. Mr Norman told Bloomberg: “We probably sometimes listen a bit too much to central bankers.”

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Why should you become a CPA member!

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for some time to come.

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Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!

Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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


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If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA 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.

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Just call  020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email 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?

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Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.