Business news 12 October 2022
James Salmon, Operations Director.
Blow for campaign against late payments. GDP’s surprise decline. Energy price support package for British businesses expanded. UK grocery inflation climbs. UK unemployment falls. Kwasi Kwarteng promises ‘relentlessly upbeat’ economic plan. And more business news.
Blow for campaign against late payments
The government scrapped the role of “minister for Small Business”. Liz Truss and Kwasi Kwarteng, previously Minister of State at the Department of Business, Energy and Industrial Strategy clearly values the role. A new position of “minister for enterprise and markets” in instead a more junior role with small business now only one of 16 areas of responsibility covered. That really demonstrates the value Liz Truss and this government puts on the 5 million small businesses that are the heartbeat of the UK Economy.
Tackling late payments was one of the key roles of the Small Business Commissioner. Rightly so, as late payments are the single biggest killer of small businesses. As cashflow headaches, missed opportunities and the distraction and headaches caused sap the energy of this key sector.
The new minister for enterprise and markets, Dean Russell MP, has pledged that he “will continue to champion our innovative and hardworking small business community ensuring they have a voice at the heart of government”. let’s see how he fits that in with his 15 other areas of responsibility.
GDP’s surprise decline
The UK Economy registered a surprise decline in August according to the Office for National Statistics, during what was a poor month for the consumer-facing sector. GDP declined by 0.3% in August from July, following a revised (down) climb of 0.1% in July from June. Month-on-month growth in July was initially forecast at 0.2%. August’s gross domestic product was expected to have remained unchanged from July.
Energy price support package for British businesses expanded
The UK Government has expanded the energy price subsidy scheme for British businesses. It will now include contracts that were agreed after December 1 last year before the war broke out in Ukraine.
UK grocery inflation climbs to record high of 13.9% in September
Food costs rose by 13.9% last month, according to research company Kantar, pushing up the average annual bill by £643 to £5,265 – if consumers were to buy the same products as they did last year. Lidl remains the fastest growing grocer, for the fifth month in a row.
UK unemployment falls to lowest level since 1974
Unemployment in the UK hit a new multi-decade low in the three months to August, driven by long-term sickness among older people and by students choosing not to work. Figures from the Office for National Statistics show unemployment stood at 3.5% – 0.3 percentage points down on the quarter and the lowest since 1974. Kwasi Kwarteng, the Chancellor, said the 50-year low in the jobless rate showed that “the fundamentals of the UK economy remain resilient”. But analysts suspect the persistent pressure on wages will mean the Bank of England will find it harder to bring inflation down. Average pay, excluding bonuses, grew by 5.4% over the three months from June to August
Kwasi Kwarteng promises ‘relentlessly upbeat’ economic plan
The Chancellor has pledged to deliver a “relentlessly upbeat” economic plan when he presents his next financial announcement at the end of the month. Speaking in the Commons, Kwasi Kwarteng promised it would include “an absolute iron commitment to fiscal responsibility”, with accompanying forecasts from the Office of Budget Responsibility (OBR). But the Chancellor refused to reveal ahead of the statement whether welfare payments will rise with inflation or be subject to a real-terms cut. Dan Paskins, director of impact at Save the Children, commented: “It seems unfair that some in society were given clarity from the chancellor about what the economy holds for them within days of him taking office, while the poorest families are still awaiting vital information.”
IMF admits Chancellor’s mini-Budget will boost the UK’s economic growth
The International Monetary Fund (IMF) has admitted that the Chancellor’s mini-Budget will boost the UK’s economic growth, with the country set to become the fastest growing G7 country this year. The IMF said the tax cuts announced by Kwasi Kwarteng are expected to lift growth even higher than its current forecast of 3.6%. However, the IMF warned that high inflation would persist at around 9% next year despite predictions of interest rates climbing to 5%. The IMF believes higher inflation and rising interest rates will push around 350,000 more people out of work in the UK, with the unemployment rate expected to rise to 4.8% by the end of 2023, from 3.5% today.
Ministers to cap revenues of renewable energy firms
The UK Government has decided to cap the revenues of renewable energy generators and nuclear power plants as part of its plan to help households and businesses with soaring energy costs. It has been estimated that taxing generators such as wind and solar farms could raise between £3bn and £4bn to help offset some of the cost of limiting power prices for households at an average of £2,500. Business Secretary Jacob Rees-Mogg said: “We have been working with low-carbon generators to find a solution that will ensure consumers are not paying significantly more for electricity generated from renewables and nuclear. That is why we have stepped in today with exceptional powers that will not only ensure vital support reaches households and businesses this winter but will transform the United Kingdom into a nation that offers secure, affordable and fairly-priced home-grown energy for all.” The details will be included in the Energy Prices Bill which will be introduced in the Commons on Wednesday.
BoE will not extend emergency bond-buying programme
The Bank of England has confirmed that its bond-buying scheme to stabilise pension funds will end on Friday. The Pensions and Lifetime Savings Association, which represents schemes managing about £1.3tn of retirement money, had said many funds wanted the bond-buying programme to last until the chancellor delivered his economic plan on 31 October. But Andrew Bailey, the BoE Governor, told pension funds they had until the end of the week to shore up their portfolios against further shocks. Mr Bailey said: “My message to the funds involved and all the firms involved with those funds is: You’ve got three days left. You’ve got to get this done. Because again, part of the essence of a financial stability intervention is that it is clearly temporary.”
Markets
The FTSE 100 dropped below 6900 again yesterday. U.S. stocks also fell on Tuesday in the run-up to third-quarter results from companies as profit expectations drop amid rising interest rates and stubborn inflation. The S&P500 is expected to post year on year profit rises of 4.1% but that has fallen from 11.1% expected in July. Overnight, the S&P 500 dropped -0.65% and the NASDAQ dropped -1.10%. Meanwhile the Dollar is trying to extend its recent rally again but buying is mostly seen against Yen and Sterling. Sterling, on the other hand, is pressured after BoE ruled out extending the emergency intervention in bond markets beyond this weekend.
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 charge our members a fixed annual subscription irrespective of how high the debt value is!
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – 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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.