Business News 11th July 2017

This is the hopefully enjoyable and informative,  bite size business news compiled CPA by the Credit Protection Association on Tuesday 11th July 2017 for its members and visitors.

Markets Round up

The FTSE 100 rose 0.26% to 7370 yesterday as sterling fell against the Euro to 1.13 and 1.289 against the USD while HSBC and Diegeo lead the gains. Shire however was the major drag, falling 3.2% after news came out of a legal battle with Roche. Elsewhere, Carillion fell 39% after announcing it had to provide for £845m in losses in construction projects in Saudi Arabia, Egypt, Canada and Qatar. European shares were boosted on strong  German export data as its trade surplus widened . “The German economy currently seems to be firing on all cylinders,” said ING Bank chief German economist Carsten Brzeski. In the US the S&P was pretty much level overnight, inching up two points to 2427 but the Nasdaq rose 0.4% to 6176. Technology stocks across Asia followed the Nasdaq’s lead with the Nikkei up .6% and the Hang Sang up 1.5%. Oil rose although still in a very weak position and Gold edged lower as the dollar strengthened along with equities.

Taylor Report

The long awaited report in to modern working practices and the gig economy will be published today. It is unlikely to please many though with unions complaining it doesn’t go far enough and employers saying it imposes to many burdens.  The main thrust is anticipated to be the extension of rights to holiday, maternity and paternity leave,  sick pay and the minimum wage to self employed contractors, creating a new class of worker called “Dependent Contractors” who will be entitled to some benefits with some caveats. There are also likely to be moves to try and bring an end to the cash in hand economy. We will write more later.

UK retail

The British Retail Consortium reported that UK retail sales rose 1.2% on a like-for-like basis in June compared to a year before. Retail sales rebounded as one of the warmest Junes on record inspired a spending spree on clothes and beauty products. On a total basis, sales rose 2.0% in June, compared to 0.2% growth in June 2016. Over the three months to June, food sales rose 3.6% on a like-for-like basis and 4.7% on a total basis, which BRC said was the strongest three-month average since February 2012, and brings the 12-month total average growth to 2.5%, the highest since December 2013. Over the same period non-food retail sales rose 0.9% on a like-for-like basis and 1.2% on a total basis, above the 12-month average total growth of 0.6%. This was the best three-month average since December, BRC said, and the first above 1.0% in the year so far. It included 10.1% growth in online non-food sales in June. Over the three months to June online sales of non-food products rose 8.4%, whilst in store sales declined 1.2% on a like-for-like basis.

No NICs rise for self-employed

The First Secretary of State Damian Green has stated there will be no attempt to return to Philip Hammond’s proposal that Class 4 NI should be increased for the self-employed. Discussing Matthew Taylor’s review of the gig economy on BBC Radio 4, Mr Green said policies brought forward as a result of the report would not include the NICs rise. The Taylor report “deliberately doesn’t make tax recommendations,” he added. However, the Telegraph’s Szu Ping Chan points out that Taylor does call for a responsible debate on the issue of tax and states that Mr Hammond’s attempt to raise NICs for the self-employed was right. Elsewhere, the Sun cites FSB chief Mike Cherry, who said: “It’s a relief ministers have finally seen sense and taken this tax grab off the table.”

SMEs workers putting in the extra hours for free

New research from Paymentsense finds UK SME staff are working at least one additional unpaid day every week while 16% work even more hours, with younger workers (aged 18-24) averaging 11 extra unpaid hours every week. The extra work, regardless of the reason for doing it, is worth £1.6bn a year to SMEs, but is leading to 42% feeling more stressed, and 37% feeling taken for granted by their employer. A separate study by Aldermore found that over half of small business owners are taking fewer than five says off a year and a fifth did not take a single day off in the last year.

London now world’s third best business city

London has ranked joint-third in the list of best cities to do business in, according to Ipsos Mori’s Top Cities survey, up from fifth place four years ago. The survey, which recognised London’s ambitions despite the uncertainty caused by the Brexit vote, was topped by New York, with Abu Dhabi in second place.

M&A between UK and EU doubles since Brexit

Deals worth $32.5bn (£25.2bn) were announced in the first half of the year, more than doubling on the same period of 2016. In the first two quarters, Deloitte tracked 247 cases of UK firms agreeing deals worth $17.7bn on the continent, and 188 deals worth $14.7bn into the UK, with French and German companies in particular being highly acquisitive in the UK.

Australian trade deal

Australian PM Malcolm Turnbull said yesterday he is ‘very keen’ to secure a trade deal with the UK after Brexit ‘as quickly as possible.’ Speaking at a joint conference with Theresa May following a meeting between the two leaders at 10 Downing Street, Mr Turnbull said, ‘We move quickly. Australians are fleet of foot. We don’t muck around. We’re very simple. So we will move as quickly as the UK will move.’

USA trade deal

Following comments from Trump on the weekend that Saturday he expected to strike a deal with the UK ‘very, very quickly.’, some commentators have been quick to post warnings about rushing into a deal. Business leaders and analysts have warned it is easy to promise and hard to deliver. The challenge for the U.K. with talks set to begin this month is that America boasts more leverage and negotiating know-how than the U.K. does. That will potentially force May to compromise on areas such as financial regulation and food standards to land the agreement she needs. “The U.K. must be absolutely desperate to demonstrate that it’s able to get something from the United States,” said Peter Holmes, an economist at the Trade Policy Observatory, a research group. “The U.S. will make demands that even a desperate British government won’t be able to accede to.”

The cost of poor numeracy

A new report by National Numeracy and KPMG states that almost one in four adults are unable to do simple calculations such as working out interest on a savings account or currency exchange rates. The report notes that a 2012 survey found that 49% of working-age adults in England have the numeracy level expected of primary school children. The total cost to the UK economy of poor numeracy has been put at £20bn a year, the report adds.

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Previous News pages

Business News 10th July 2017

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

Business News 28th June 2017

Business News 27th June 2017

Business News 26th June 2017

Business News 23rd June 2017

Business News 22nd June 2017