Business News 12th September 2017
CPA hopes to inform, with its daily bite-size business news on Tuesday 12th September 2017, filled with stories we think will interest Business people.
Markets Round up
UK markets rose 0.5% to 7413.60 on Monday following weekend developments which saw Miami escape the worst effects of Hurricane Irma and weaken substantially in the approach to Tampa. The FTSE 250 rose 0.4% 19,694.30 Easyjet jumped on the view that it would benefit from people cancelling Florida and Caribbean holidays. The same logic applied to TUI AG which saw similar gains. European and Swiss reinsurers were up sharply with Munich Re, almost 5% ahead after a director said the company did not like Florida as an underwriting location and did not have a high exposure. U.S. stocks rallied to record highs as Hurricane Irma weakened without causing as much damage as many had feared, and a North Korean holiday passed without new missile launches. Investors continued to buy risk assets overnight and sell havens, as Asian stocks extended gains while the yen and gold fell further. Oil prices rose with WTI at $47.80 and Brent at $53.56 as key U.S. refineries began restarts following Hurricane Harvey, which may help revive crude oil processing. Gold prices hit their lowest in over a week and are at $1327.2 this morning, as a lull in geopolitical tensions spurred a pick-up in investor appetite for riskier assets. The pound is up at 1.109 Euros and 1.327 US dollars.
Breaking News – Inflation
Inflation is in for August above expectations. CPI came in at 2.9% (2.8% predicted, 2.6% in July) and RPI at 3.9% (3.7% predicted 3.6% last month). More to follow tomorrow
Confidence dips amongst SMEs
An international survey by the insurer Hiscox has found just 61% of UK small companies reported growth in revenue over the 12-month period to June 2017. It places British SMEs at the bottom of an international group that includes the US – where 72% of small firms reported climbing revenues – Spain (71%), Germany (68%), the Netherlands (67%) and France (62%). The proportion of UK SMEs with an optimistic outlook also dropped, from 60% to 55%. Responding to the report’s findings, Mike Cherry, FSB chairman, suggested that a raft of policy measures were needed, including “tackling late payments, reforming business tax, an ambitious industrial strategy, and changes to public procurement.”
Household Spending
UK household spending moved back into the black for the first time in four months during August, with outlays rising year-on-year driven by the e-commerce sector, the results of a closely-followed survey revealed. The latest Visa UK consumer spending index data showed that UK household spending increased for the first time in four months in August with a 0.3% year-on-year increase in expenditures, compared to a decrease of 0.8% in July. Growth was strongest in the e-commerce sector, where, according to the data, expenditures rose 6.5% year-on-year.
EU states propose ‘turnover tax’ for multinationals
Four EU countries are proposing a new tax on multinationals in a bid to stop corporation tax dodging. A letter to the European Commission by the finance ministers of France, Germany, Spain and Italy says an “equalisation tax” paid on turnover instead of profits could recoup “some of what these companies should be paying in terms of corporate tax”. However it could be argued that while the proposed levy will probably collect a few billion in tax, it will ultimately damage the European economy by curbing tax competition and leading to higher costs for consumers.
Brexit
The Labour Party’s divisions on Europe were left exposed after a mini-rebellion in a series of votes on the UK government’s flagship Brexit Bill. UK Prime Minister Theresa May headed off defeat in the crunch Commons clash and hailed results as a historic Parliamentary victory that would allow exit negotiations to move on. Jeremy Corbyn had branded the European Union (Withdrawal) Bill a ministerial “power grab” and ordered his MPs to vote against the government. But seven Labour MPs backed giving the Bill a second reading and 13 abstained in the vote, although at least one missed the debate as a result of hospital treatment.
Tax breaks to tempt ships
Ministers are launching a drive to double the size of Britain’s Merchant Navy by highlighting tax breaks as an incentive for registering ships in the UK.
Smaller housebuilders struggle to access finance
A squeeze on funding for smaller housebuilders is hampering government efforts to boost the housing supply, according to a study by the Federation of Master Builders. It found 54% of small and medium developers said accessing finance is a major barrier to building more homes, up from 50% last year.
Professionals warned of pension pot limits
The Telegraph’s Sam Meadows warns professionals who expect to enjoy gold-plated “final salary” pensions that they could see their retirement income eroded by punitive taxes. This is because of a £1m statutory limit on the value of a pension fund before tax-free status is lost. Mr Meadows points out that anyone who is on course for a £50,000 annual pension could be caught by the tax, which is charged at 55% on any excess over the £1m cap.
The Daily Telegraph, Page: 23
Businesses should invest amid slowing growth, ICAEW says
Businesses should invest for the future despite the current economic and political uncertainty, according to a report from the ICAEW. Its latest economic forecast predicts GDP growth of 1.6% in both 2017 and 2018, 0.8% slower than the average for the past three years. “Businesses are in no rush to make major capital investments at the moment. With corporate balance sheets and profitability healthy, borrowing costs low and demand from the UK’s major trading partners strong, businesses could be investing now for the future,” said Michael Izza, ICAEW chief executive.
Super-rich see wealth rise
A report by Campden Wealth and UBS shows just 4% of the world’s richest families lost money last year. The research into the family offices of the super-rich found that just 10 out of 262 suffered a decline in wealth over 2016, while three-quarters of the families – who had an average fortune of $1.45bn (£1.1bn) – increased their wealth. A further 22% reported no change to their wealth.
The Guardian, Page: 25
Charity donations in wills almost double in a year
One in ten people left money to charity in the last year, compared to just one in 16 from the year before, according to research from the Co-op Legal Services. Ben Yearsley, director at Shore Financial Planning, suggested the rise may be to do with growing wealth within the country, as giving to charity is “tax efficient”.
The Daily Telegraph
Irma
Florida is drenched and tattered — but fortunate. Irma moved over Georgia and Alabama as a tropical storm, leaving in its wake a state that avoided the worst predictions of destruction. Still, about 12.3 million people were without power, the Florida Division of Emergency Management said, and almost half the state’s gas stations were out of fuel.
Volkswagen goes electric
VW plans to build electric versions of all 300 of its models by 2030, CEO Matthias Mueller said on the eve of the Frankfurt auto show. It will spend 20 billion euros ($24 billion) to develop the vehicles on top of 50 billion euros on batteries. Mueller called the industry’s shift from fossil fuels “unstoppable,” given tightening emission rules and China’s phase-out of gasoline and diesel cars.
North Korea
The UN has unanimously adopted its strongest sanctions yet on North Korea, aimed at depriving Pyongyang of more than $1.3bn in annual revenues and boosting pressure on Kim Jong Un’s regime following its recent nuclear test. The measures, which include an embargo on textile exports, a halt to employing additional North Korean workers overseas and a cap on refined petroleum trading that will reduce oil imports by 30 per cent, won support from China and Russia, but only after stronger proposals circulated by the US were watered down. “Combined with the previous Security Council resolutions, over 90 per cent of North Korea’s publicly reported 2016 exports of $2.7bn are now banned,” said a statement from the US mission to the UN, adding they were “the strongest sanctions ever imposed on North Korea”.
Norway
After spending a record amount of Norway’s oil wealth to prevent a recession, Prime Minister Erna Solberg became Norway’s first Conservative Party leader in more than 30 years to win re-election. The 56-year-old, and the groups of lawmakers who support her, won a slender majority in the 169-member parliament, according to Norway’s election authority after voting ended in Oslo late on Monday. With 93 percent of the votes counted, the four parties supporting the outgoing center-right government were set to gain 88 seats. “It looks like we have a clear majority” to govern for “four more years,” Solberg told cheering Conservative Party supporters at a rally in Oslo.
Let’s hear it for fat!
Researchers now say high fat intake is associated with a lower risk of mortality. Their study in the Lancet also concluded that higher fat diets correlated with a lower risk of stroke. People with the highest in total fat intake — an average of 35.3% of calories from fat — had about a 23% reduced risk of death compared with those with the lowest intake. The same study showed a high carb intake is associated with a higher risk of death.
Or see our recent previous news pages
Business News 11th September 2017
Business News 8th September 2017
Business News 7th September 2017
Business News 6th September 2017
Business News 5th September 2017
Business News 4th September 2017
Business News 1st September 2017
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