Business News 12th July 2017

This is the hopefully enjoyable and informative,  bite size business news compiled by the Credit Protection Association on Wednesday 12th July 2017 for its members and visitors.

Markets Round up

The FTSE 1000 closed yesterday down 0.6% at 7330 . Euro Stoxx 50 closed down 0.4% at 3464. Stocks around the world reacted to the release of Donald junior  Trump’s emails that admitted the Russians were supporting his father and trying to damage Clinton. It was a reminder that politics can influence the markets. Marks & Spencers were down 4.7% following disappointing numbers from their food division. Carillion continued it’s nosedive as it fell a further 31%. The S&P 500 was broadly level overnight closing at 2425 while the Nasdaq continued its bounce, rising 0.3% to 6193. The pound weakened to $1.283 and €1.121. The Japanese Nikkei was down but the Chinese Hang Sang was up as attention turns to Janet Yellens testimony later.  Oil rose more than 1.5%, extending gains from the previous day as the U.S. government cut its crude production outlook for next year and as fuel inventories plunged. Gold edged up for a third day on a weaker U.S. dollar. The UK market has started the day up over half a percent.


Regarding the divorce bill, Boris Johnson said the bloc can “go whistle” and that “the sums that I have seen that they propose to demand from this country seem to me to be extortionate.” He also added there is no government plan for talks collapsing without an agreement “because we’re going to get a great deal.” May’s spokesman, James Slack, then contradicting Johnson tellingreporters that “contingency planning is taking place for a range of scenarios.”. Meanwhile the negotiators are looking to agree broad principles to resolve the irish border issue so that it doesn’t hold the negotiations. British Brexit Secretary David Davis said on Tuesday that a full plan for the border is unlikely “until the end of the process” of negotiating the split.



JPMorgan Chase Chief Executive Officer Jamie Dimon r warned on Tuesday that EU officials could force London-based firms to move substantially more employees abroad than currently planned if they demand additional banking operations are performed inside the bloc. “If the EU determines over time that they want to move a lot more jobs out of London into the EU, they can simply dictate that,” Dimon said in Paris. “If regulators say one day we’re not comfortable with your risk people, your lawyers, your compliance being in the U.K. they can make us move it.” HSBC CEO Stuart Gulliver said his bank will still relocate as many as 1,000 London-based jobs to Paris. Societe Generale said it will move 300 to 400 jobs from the U.K. to Paris

Finance leaders feeling less positive

Financial leaders are feeling less optimistic about Brexit, according to a UK-wide survey by Icas. The Icas Brexit Tracker, in association with law firm Brodies, charts a range of responses from -50 (very negative) to +50 (very positive). The May-June survey, based on responses from more than 530 chartered accountants, found that on average the sentiment regarding the experience of Brexit so far was slightly more negative (-9, compared with -6 in March).

BOE dove

In an interview, the Monetary Policy Committee’s Ben Broadbent sounded a relatively ‘dovish’ note, saying he was not ready to vote for a hike in Bank Rate yet. “In my opinion, it is a bit tricky at the moment to make a decision. I am not ready to do it yet. “There is reason to see the committee moving in that direction – but there are still a lot of imponderables,” he said.

UK economy going soft

Standard & Poor’s thinks the UK economy is heading for a soft patch. An S&P report which said that squeezed real wages and uncertainties relating to the manner in which the UK will leave the EU mean that growth will likely be 1.4% this year, and 0.9% in 2018. That represents a pullback from the 1.8% growth in 2016 and is “subject to considerable downside risks, stemming mainly from Brexit uncertainties,” S&P said. The agency does not expect a rise in UK interest rates until mid-2019. The reason given is the squeeze on living standards caused by higher inflation which will outweigh the benefits for exports of a cheaper pound.

Taylor Review

The Taylor review into modern employment practices was released yesterday. Recommendations by Matthew Taylor, author of the report, included introducing legal definitions for workers in the gig economy, in other words these workers to be classified as dependent contractors. Businesses in the gig economy would have to pay more tax under proposals put forward by the Taylor review of modern working practices with it being proposed they be liable for National insurance contributions. The review recommends firms which have a “controlling and supervisory” relationship with their workers should pay a full range of benefits and NI contributions, and says self employed workers  should be classified as dependent contractors. The review also called for cash-in-hand employers to switch to online systems such as PayPal, amid suggestions that cash-in-hand costs the UK £6bn of tax a year. Matthew Taylor, the report’s author, described the proposals as “the most radical reform of employment rights in a generation” if they were all adopted, but the CBI said “a number of proposals in the report will be of significant concern to businesses”. Theresa May said the government would carefully study the review’s recommendations but stopped short of promising new legislation. The FT welcomes the report’s recommendations for tax reforms, but the Telegraph’s leader says the review should not be used as an excuse to hike taxes. The Telegraph’s Jeremy Warner warns that the proposal to tax gig economy growth could stifle the economy, while Lex in the FT says the recommendations will ultimately mean little for most large established employers. Theresa May wooed working class workers, promising to back the recommendations proposed by Mr Taylor to improve the rights of those at the bottom of the jobs market. However, PM’s support came with limits. She did not agree to extend maternity and paternity leave to self-employed workers and it is unlikely that the Government will back raising national insurance contributions for the self-employed after the rebellion such plans caused in the Tory party following the announcement by the Chancellor in the last Budget. Mrs May also refused to support ending the ‘cash in hand’ payment culture – another recommendation in the report – saying that it was up to contractors to pay their tax.

Software hold-up delays rates relief

Firms hurt by rises in business rates are yet to receive the relief they were promised in March because councils are waiting for software to be updated. Civica, which supplies the business rates software used by one in five local authorities in England, said that it was working to update software so that bills could be amended to reflect help provided by the £300m business rates “hardship fund”. Northgate, another leading software provider, said that it is meeting the government today to discuss the issue.

Chancellor pressured over tax avoidance losses

Philip Hammond is facing pressure to recover any monies lost to aggressive tax avoidance in the recruitment sector, after a Guardian investigation exposed how millions of pounds could be lost to the exchequer. Frank Field MP has also asked the Treasury if it has calculated the impact on tax revenues of the liquidation of companies linked to the recruitment adviser Anderson Group, which promoted a scheme which saw thousands of firms set up to exploit VAT and NI rules. Many of the mini companies linked to Anderson were put into voluntary liquidation at the end of 2016 – a move that post-dated HMRC’s fraud and investigation service asking the company for details about the large numbers of VAT registration applications made on behalf of its clients.

Ofwat review

Ofwat is encouraging suppliers to step up their customer service levels and to focus on longer-term plans ahead of deciding the framework the sector will have to work under from 2020, as it also aims to make water more affordable for consumers. UK water and sewage companies are subject to price controls that are reviewed and set by the regulator every five years, with the sector currently working under the framework set for the 2015 to 2020 period that was outlined by Ofwat in 2014. United Utilities, Severn Trent  and Pennon Group  – will put forward their business plans for the 2020 to 2025 period to Ofwat as part of the review, which the regulator will then scrutinise before deciding to approve individual company plans or whether it needs to step in and intervene.


Lloyds have announced they will be ending fees for unplanned overdrafts  for the 20 million customers of Lloyds Banking Group, which includes the Halifax and Bank of Scotland. From November this year, any customer going over their overdraft limit will face no fees at all, Lloyds said. However, the bank may continue to block payments from the account until the overdraft is paid off.

Ofcom auction

Ofcom set out the rules for its upcoming auction of spectrum to help meet mobile broadband demand and support the roll-out of 5G networks. Ofcom will auction licences to use 190 megahertz of spectrum in two frequency bands later this year, which it expects to increase the airwaves available for mobile devices by almost one third. 40 megahertz will be auctioned in the 2.3 gigahertz band. These airwaves will be able to be used immediately to provide extra capacity for downloads and browsing for mobile users.

Energy over billed?

Every household in the UK should get a one-off rebate of £285 on its fuel bills as a result of excess industry profits, Citizens Advice has said. Over eight years, it claimed firms that transport gas and electricity – so-called energy networks – have made £7.5bn in “unjustified” profits.

Auto-enrolment passes 8m mark

CityAM reports that statistics from the Pensions Regulator reveal the popularly of the workplace pension has exceeded expectations. More than 8m people have signed up for a workplace pension since auto-enrolment was launched in 2012. Hundreds of thousands more employees are also set to enrol in the coming months, ensuring the total number will ultimately beat the expectation of 8m people in total set out five years ago.

Football revenue hits record high

Premier League football clubs’ revenues rose 9% to a record £3.6bn in the 2015-16 season, according to analysis from Deloitte. It says broadcast earnings of £1.9bn accounted for more than half of the top flight clubs’ total revenues.

Coffee Drinkers live longer

Sorry for adding this late, I meant to put it in yesterday’s post but had a mental block. Drinking three cups of coffee a day may help you live longer, according to a study of almost half a million people from 10 European countries. The research, published in the journal the Annals of Internal Medicine, suggests an extra cup of coffee could lengthen a person’s lifespan – even if it is decaffeinated. searchers from the International Agency for Research on Cancer and Imperial College London say they have found that drinking more coffee is linked to a lower risk of death – particularly for heart diseases and diseases of the gut. Red wine and now coffee? I could live forever. An extra cup of coffee could add 8 minutes to your life. Excuse me while I go now to fire up my Nespresso machine.

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Previous News pages

Business News 11th July 2017

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

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Business News 23rd June 2017

Business News 22nd June 2017