Business news 12 April 2024
Lenders expect higher default rates. Half of consumers cut back on non-essential spending. Global economy faces decade of weak growth. GDP, Insolvencies, Markets & more business news that we thought would interest our members.
James Salmon, Operations Director.
Lenders expect higher default rates
The Bank of England’s latest quarterly credit conditions survey shows that lenders are seeing increasing demand for credit card lending and higher default rates.
Default rates for both credit cards and other unsecured lending increased during Q1, and lenders expect further increases in Q2. Lenders also saw default rates on secured loans to households, including mortgages, increase in the first quarter.
While losses given default – the estimated amount a lender loses when a borrower defaults – fell in the first quarter, lenders expect it to rise in Q2. Karim Haji, global and UK head of financial services at KPMG, said: “Defaults across all unsecured lending increasing over the same three-month period indicates many people are still struggling to meet their day-to-day costs. Lenders will need to be vigilant and continue to offer support for borrowers in the interim.”
Half of consumers cut back on non-essential spending
Half of consumers have cut back on their non-essential spending this year, with eating out being the most common expense to be reduced, according to a survey by KPMG. The survey found that only 3% of consumers have been able to increase their spending on non-essentials in the first quarter. Eating out was the most frequently cut discretionary spending, followed by clothing purchases and takeaways.
When asked what they would do if prices dropped, 47% said they would save the money, while 20% would put it towards essential costs. Only 11% said they would increase their non-essential spending. The survey also revealed that consumers are buying more own-brand and discounted items, and buying fewer items overall. A quarter of consumers said they do not plan to spend any of their savings this year, while a quarter are currently using their savings to cover essential costs.
FCA urges those struggling financially to seek support
Financial Conduct Authority chief executive Nikhil Rathi has encouraged financially struggling individuals to seek support, warning that the risk of turning to loan sharks may increase if people do not address their situation early. FCA research shows that 7.4m UK adults feel heavily burdened by domestic bills and credit commitments. The analysis also found that 40% of adults who had fallen behind on their bills had avoided talking to their lenders about their finances.
Economists expect growth in February
Analysts expect official data to show that the economy grew in February and continues to move out of recession. A survey of City economists for Refinitiv suggest GDP rose by 0.1% in February, delivering the first consecutive months of growth since September.
Global economy faces decade of weak growth, warns IMF chief
IMF managing director Kristalina Georgieva says the global economy faces a decade of “tepid growth,” warning that “inflation is not fully defeated, fiscal buffers have been depleted and debt is up.”
GDP
UK Gross Domestic Product rose 0.1% in February, the Office for National Statistics said on Friday, providing another sign of a return to sluggish economic growth this year. The month-on-month figure was in line with a projection in a Reuters poll. On an annual basis, GDP was 0.2% lower. The economy contracted in the third and fourth corners of 2023, putting the U.K. in a technical recession. January recorded light growth, which was revised upward to 0.3% on Friday.
Industrial & Manufacturing Production
UK industrial production rose 1.1% month on month in February, 1.4% annually, defying expectations of a fall.
Manufacturing production rose 1.2% month on month in February, 2.7% annually, exceeding expectations (2%)
Markets
London markets drifted lower in afternoon trading yesterday, as investors digested a second US inflation report and the latest ECB interest rate decision. In late trading, the FTSE 100 was 0.5% lower while the 250 was 0.1% lower.
US markets were broadly positive on Thursday, Futures flickered near the flatline early on Friday as traders looked ahead to the release of corporate earnings from major US banking stocks.
And this morning the FTSE was up over 1% and smashing through the 8000 point barrier as commodity stocks rose on Middle Eastern tensions and the prospect of ECB rate cuts boosted other stocks.
ECB
The European Central Bank held interest rates steady for a fifth straight meeting and gave its clearest signal yet of an upcoming rate cut, despite uncertainty over the U.S. Federal Reserve’s next moves. “If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction,” it said in a statement.
Oil
Brent hovered around $90 a barrel on Thursday as persistent inflation dampened rate cut optimism in the short term, but stayed near six-month highs as investors braced for a potential attack on Israeli interests by Iran.
Gold
Gold rallied to a new record and is just shy of $2400 on the back of US inflation and Middle Eastern tensions.
Apple
Apple are refreshing their entire MAC series with new M4 chips designed to enable AI capabilities.
Motor finance claims
The Financial Conduct Authority has warned motor finance firms must hold back cash as a probe into the market goes on. “We expect you to undertake an assessment of whether your firm’s financial resources are adequate,” the watchdog wrote in a letter to firms on Friday. This includes analysing whether the likes of dividend payments could cloud firm’s ability to pay liabilities relating to the probe in the future, the FCA said.
CMA concerned over big tech’s AI dominance
The Competition and Markets Authority (CMA) says big tech’s dominance of the AI market is a matter of “real concern.” The competition watchdog has been looking at powerful AI tools called foundation models and has found an “interconnected web” of AI partnerships involving Google, Apple, Microsoft, Meta, Amazon, and chip-maker Nvidia. CMA chief executive Sarah Cardell said: “When we started this work, we were curious. Now, with a deeper understanding and having watched developments very closely, we have real concerns.” She added: “The essential challenge we face is how to harness this immensely exciting technology for the benefit of all, while safeguarding against potential exploitation of market power and unintended consequences.”
UK multinationals get boost in fight against EU tax order
Britain’s fight against an EU order to recover millions of euros from the London Stock Exchange and multinationals that benefited from an illegal exemption in a British tax scheme have received a boost from an adviser to Europe’s top court. Advocate general Laila Medina at the Court of Justice of the European Union said judges should annul the European Commission’s 2019 decision against the UK’s illegal tax rulings granted to certain multinational groups. The Commission claimed that Britain’s Controlled Foreign Company (CFC) rules gave these firms an illegal advantage. Ms Medina faulted the EU executive and the General Court’s legal errors, stating that the CFC rules can only be fully understood when considering the UK corporate tax system as a whole.
CGT and second homes
With deputy Labour leader Angela Rayner making headlines due to questions over whether she paid the correct amount of capital gains tax on a property, the Telegraph says it is important to understand how CGT is charged. It highlights that a gain on a main home, known as the principal private residence (PPR), is tax-free if it has been the PPR throughout the ownership period. However, if a property ceases to be the PPR, relief is given on a time apportioned basis. Individuals with multiple homes can make an election to nominate which property is treated as their PPR for tax purposes. Jointly owned homes have specific rules, and divorce or separation can affect tax relief eligibility.
Tax freeze to cost the average worker an extra £50k
The typical worker in England will pay nearly £50,000 more income tax over their career compared to three years ago, according to analysis by TaxBite. The average salary has risen by 16% between 2020/21 and 2023/24, but the income tax an average earner would have to pay over 48 years has increased by £47,102, or 27%. This means that the average earner now has to work for over six years solely to fulfil their lifetime tax obligations, which is six months longer than in 2020/21. Tax thresholds were frozen in 2021, meaning millions of taxpayers are paying more tax due to inflation pushing up wages. The number of people paying income tax has surged by 4.5m since 2010, and in 2023/24, 18% of income taxpayers were projected to pay either the higher or additional rate compared to 10.4% in 2010. John O’Connell, chief executive of the TaxPayers’ Alliance, has called for the lifting of thresholds and cutting of tax rates, while Chris Etherington of RSM has warned that frozen thresholds could deter people from entering the workforce. He said: “While the Chancellor is focused on trying to reduce the tax burden on workers, the biggest change that needs to happen is for the thresholds to be linked to inflation. That is the only thing that will make a real difference to workers’ lives.”
Telegraph’s financial stability at risk if Barclay family regains control
The Telegraph’s financial stability is in jeopardy if the Barclay family regains control. Suspicious transactions discovered while the company was placed in receivership by Lloyds Banking Group could restrict its access to finance if the family makes a comeback. A £60m loan from Lloyds to the parent company of The Telegraph, Press Acquisitions Limited, would be threatened with immediate repayment. Lloyds’ knowledge of the suspicious transactions means it could withdraw financing if the Barclays regain control, under its own regulatory obligations and integrity policies.
Latest Insolvencies
Petitions to wind up (Companies) – BEATTIE’S RECYCLING LTD
Petitions to wind up (Companies) – KNOWLE ENTERPRISES LTD
Petitions to wind up (Companies) – DANS DRYLINING LTD
Petitions to wind up (Companies) – NETWORKS FOR GOOD LIMITED
Appointment of Liquidators – OSBORNE DEVELOPMENTS (COLCHESTER) LIMITED
Petitions to wind up (Companies) – CREST VENTURES LIMITED
Appointment of Administrator – BURLINGTON(WATH)CLUB LIMITED BURLINGTON HOUSE
Petitions to wind up (Companies) – JACME ORAL CARE LIMITED
Petitions to wind up (Companies) – ZANMGT LTD
Appointment of Liquidators – BETAHR LIMITED
Petitions to wind up (Companies) – MCHL CONSULTING LTD
Petitions to wind up (Companies) – HARLEY ULTRASOUND LIMITED
Petitions to wind up (Companies) – JH PARKHOUSE LIMITED
Appointment of Administrator – THE GREAT NORTH EASTERN BREWING COMPANY LIMITED
Petitions to wind up (Companies) – FOUNTAYNE MANAGING LTD
Petitions to wind up (Companies) – GODFREY GROUP LTD
Petitions to wind up (Companies) – DALEMOUNT LIMITED
Petitions to wind up (Companies) – CREED SCAFFOLDING LIMITED
Petitions to wind up (Companies) – SMYTH BRICKWORK LTD
Appointment of Liquidators – ROWBOTHAM CONSULTING LIMITED
Petitions to wind up (Companies) – GLASS WALL INSTALLATIONS LTD
Petitions to wind up (Companies) – JAP4PERFORMANCE LTD
Petitions to wind up (Companies) – HALESTYLE HERBERT CRESCENT LIMITED
Petitions to wind up (Companies) – CLEANAMATCH LTD
Petitions to wind up (Companies) – VISION MARKETING AND DISPLAYS LTD
Petitions to wind up (Companies) – HURK LIMITED
Appointment of Liquidators – NEWCLAY PRODUCTS HOLDINGS LIMITED
Appointment of Liquidators – RW TEST SOLUTIONS LTD
Petitions to wind up (Companies) – TOUCHPAPER CONSULTING LTD
Appointment of Liquidators – NTP SOLUTIONS LIMITED
Petitions to wind up (Companies) – AYAANSAN FASHION LTD
Appointment of Liquidators – GP M DEB LIMITED
Petitions to wind up (Companies) – AUTO EXECUTIVE CARS LIMITED
Petitions to wind up (Companies) – CB FLUE & CHIMNEY CONSULTANTS LTD
Petitions to wind up (Companies) – JFC TRADING LIMITED
Petitions to wind up (Companies) – S & J QUALITY SERVICES LIMITED
Petitions to wind up (Companies) – J F BUILDING SERVICES (UK) LTD
Petitions to wind up (Companies) – YOUR CATERING SOLUTIONS LIMITED
Petitions to wind up (Companies) – HAM SAH LTD
Petitions to wind up (Companies) – VIRTUOUS CONSULTING LTD
Appointment of Liquidators – BLUE HOUSE POINT LIMITED
Appointment of Liquidators – NORTH WEST LAUNDRY SUPPLIES LTD
Petitions to wind up (Companies) – PK ENGINEERING CONSTRUCTION LIMITED
Petitions to wind up (Companies) – SOLAR FINANCING MANAGEMENT LIMITED
Petitions to wind up (Companies) – DEALS IN WHEELS LIMITED
Petitions to wind up (Companies) – PRIMA NOVA LTD
Appointment of Liquidators – RE-SHAPE LAND LIMITED
Petitions to wind up (Companies) – SHOPPERS WEAR LIMITED
Petitions to wind up (Companies) – FXAGLOBAL SERVICES LTD
Petitions to wind up (Companies) – NO. 1 HOME IMPROVEMENTS LIMITED
Petitions to wind up (Companies) – PROVINCEWIDE CONSTRUCTION LTD
Appointment of Liquidators – BRAZIER PROPERTIES LIMITED
Appointment of Liquidators – SEADA UAINE LTD
Petitions to wind up (Companies) – ENERGISE SALES LTD
Appointment of Liquidators – ROSEWOOD DEVELOPMENT HOLDINGS LTD
Appointment of Administrator – BOTANICAL WATER TECHNOLOGIES LTD
Petitions to wind up (Companies) – THE NATIONWIDE EMERGENCY GLAZING COMPANY LTD
Petitions to wind up (Companies) – DRIVERS 4 U (SOUTHERN) LIMITED
Appointment of Liquidators – FTN ENGINEERING LTD
Appointment of Liquidators – LD DEVELOPMENTS LTD
Petitions to wind up (Companies) – ALL ASPECTS CARE LIMITED
Petitions to wind up (Companies) – ASSET SPACE LTD
Petitions to wind up (Companies) – RK PROJECT CONTROLS LIMITED
Petitions to wind up (Companies) – JKB ELECTRICAL SERVICES LIMITED
Appointment of Liquidators – DRYSDALE GOLF LIMITED
Appointment of Liquidators – BRIDGEND CUSTODIAL SERVICES LIMITED
Appointment of Liquidators – CYUNA LTD
Petitions to wind up (Companies) – ROSNEY JOINERY CONTRACTORS LTD
Petitions to wind up (Companies) – ANDREI BALUTEANU LIMITED
Petitions to wind up (Companies) – A.B. BUTCHERS LIMITED
Petitions to wind up (Companies) – LEGAL BUSINESS SUPPORT LIMITED
Appointment of Liquidators – EAST LODGE CAPITAL PARTNERS LLP
Petitions to wind up (Companies) – INTERIOR FIT-OUT SERVICES LTD
Petitions to wind up (Companies) – RELIABLE APPLIANCE REPAIRS LIMITED
Petitions to wind up (Companies) – WADHURST INVESTMENTS LIMITED
Petitions to wind up (Companies) – CONSTRUCTION ION 33 LIMITED
Appointment of Liquidators – LISTER SQUARE (NO 360) LIMITED
Appointment of Liquidators – EVOLUTION SECURITIES NOMINEES LIMITED
Petitions to wind up (Companies) – KJP CONSULTANTS (CUMBRIA) LIMITED
Petitions to wind up (Companies) – JOHNSON’S BESPOKE IMPRINTED CONCRETE AND GROUNDWORKS LIMITED
Petitions to wind up (Companies) – FIDELUS MANAGEMENT SERVICES LTD
Appointment of Administrator – 3ACE INTERNATIONAL LIMITED
Petitions to wind up (Companies) – KFF READING LTD
Appointment of Liquidators – HENLU LIMITED
Appointment of Liquidators – MERAK CAPITAL LLP
Petitions to wind up (Companies) – NEXIS SERVICES LTD
Petitions to wind up (Companies) – PROMINENT VENTURES UK LTD
Appointment of Liquidators – ALDERLEY PROPERTIES LIMITED
Petitions to wind up (Companies) – GRIFFIN DRY LINING LTD
Petitions to wind up (Companies) – MSF TRADES & LABOUR LTD
Appointment of Liquidators – ALP MEDICAL SERVICES LIMITED
Petitions to wind up (Companies) – PREMIER CLEANING CONTRACTORS LTD
Petitions to wind up (Companies) – DIMAX CARPENTRY LTD
Petitions to wind up (Companies) – GRABHIRE4U LTD
Petitions to wind up (Companies) – MACRO RECRUITS LTD
Petitions to wind up (Companies) – PARKVIEW DESIGN & BUILD LTD
Petitions to wind up (Companies) – CHROMEVALUE HOLDINGS LIMITED
Petitions to wind up (Companies) – FLAMELILY INDEPENDENT LIVING LTD
Petitions to wind up (Companies) – N-TECH BUILDING SERVICES LIMITED
Appointment of Liquidators – QUINTESSENTIAL BRANDS UK LIMITED
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.
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.
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 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 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.