Business news 13 August 2024
GDP and inflation increases expected. Wages & Unemployment figures in. Business output reaches two-year high. Foreign investment, the skills shortage, riots, migration, HMRC, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
GDP and inflation increases expected
With the Office for National Statistics (ONS) this week set to publish inflation data for July, economists at Pantheon Macroeconomics and Deutsche Bank expect consumer price growth to have accelerated to 2.3%. This would mark the first increase since December, with the rate having fallen to the Bank of England’s target of 2% in May and June. Separate data also due this week is expected to show that GDP grew by 0.7% in Q2, with the economy continuing to bounce back from last year’s recession. Meanwhile, ONS figures on the labour market are forecast to reveal that unemployment rose to 4.5% in the three months to June, while wage growth is predicted to have slowed to 4.6%.
Fight against inflation is not over
Catherine Mann, a member of the Bank of England’s Monetary Policy Committee, says that the battle to ease inflation is not over, despite price rises falling to the Bank’s target rate of 2% in recent months. Saying the Bank should be wary of lowering interest rates too quickly because wage growth and price pressures could stay elevated, Ms Mann warned: “We shouldn’t be seduced by headline inflation.” She added that wage inflation will take “a long time to erode away.”
Wages & Unemployment
UK wage growth fell to 5.4% in Q2 2024 from 5.7% in Q1 according to the Office of National Statistics. The unemployment rate, however is giving at a hotter-than-expected labour market signals, dropping by 0.2 percentage points to 4.2%. The main decrease in unemployment was in over 25s.
Business output reaches two-year high
UK business output has reached its highest level in two years, driven by manufacturing and services, according to a report by BDO. The output index rose to 100.77 in July, indicating growth above historic trends. Manufacturing rebounded to 100.03, while services surpassed the 100 threshold for the first time since August 2022. BDO’s business optimism index also reached its highest level since mid-2022, reflecting easing inflationary pressures and expectations of further interest rate cuts. However, BDO’s inflation index continued to grow, driven by consumer inflation. The employment index fell to its lowest level since February 2013, with job vacancies decreasing and unemployment increasing.
UK poised for ‘tidal wave’ of foreign investment
Alasdair Haynes, the chief executive of stock exchange Aquis, says the UK is set to see a surge in international investment due to an increase in political stability following Labour’s election success. Saying that he is “extremely bullish about what’s going to happen in the UK and what’s going to happen in Europe,” Mr Haynes added: “The UK in particular, I think, has been a very, very cheap market and it hasn’t been invested in because it hasn’t had a stable government for a number of years.” He suggested that with the election delivering a “stable government with a significant majority,” this could “open the doors for literally a tidal wave of international investment.”
Tax credit could address skills shortages, says think-tank
The Inclusive Growth Commission, a business-led think-tank, has called on the Government to introduce a “skills tax credit” to incentivise employers to address skills shortages. The commission found that the UK’s human capital stock, which represents the value of workers’ skills and knowledge, would be £1.8trn higher if it had grown at the pre-2008 financial crisis rate. This shortfall could cost each UK worker an estimated £55,000 over their working life since the financial crash. The proposed skills tax credit would allow companies to deduct more than they paid towards training costs through the tax system and offer a credit for loss-making companies. The commission also highlighted that the average investment in training per employee has fallen from £2,200 in 2011 to £1,800 in 2022.
Riot fears saw 10% drop in sales
Fears over potential riots across the country last week led to a 10% drop in hospitality sales, industry body UKHospitality has said. In areas believed to be most at risk, sales were down as much as 40%, with footfall declining up to 75%. UKHospitality chief executive Kate Nicholls has described the figures as “startling.”
Data shows ‘extraordinary’ changes in post-Brexit migration system
Data from HMRC shows that while there was a 257,000 increase in employment among UK nationals in Britain between December 2019 to December 2023, there was a 487,900 increase among Indian nationals and 278,700 increase among Nigerian nationals. The data also shows that there were 241,600 fewer employments for EU nationals in the UK in the period. MP Neil O’Brien, a former government minister who requested the data, said the figures show the “extraordinary changes” since the introduction of Britain’s new post-Brexit migration system in January 2021. He added that the UK’s new migration scheme had been “more restrictive towards EU migration, but much less restrictive towards migration from the rest of the world.”
Chancellor pushing regulators to promote growth
The Government is urging financial services regulators to promote the growth of the City of London, with Chancellor Rachel Reeves backing the introduction of a secondary objective for the Financial Conduct Authority and the Prudential Regulation Authority which says they must facilitate the international competitiveness of the UK economy and its long-term growth. Ms Reeves said Labour is “pushing the regulators to demonstrate that they are taking seriously the competitiveness of our financial services sector,” adding that she and Tulip Siddiq, the Economic Secretary to the Treasury, are “constantly” asking watchdogs what they are doing to meet the growth promotion objective. The Chancellor noted that the Government plans to carry out a financial services review “to go through the rulebook and tear up rules that are unnecessary or duplicative,” adding: “I believe that our financial services sector is the jewel in the crown of the UK economy, but we need to stay competitive in a very competitive landscape.”
Markets
Yesterday, the FTSE 100 closed up 0.52% at 8210.25 as markets stabalised after the panic of the last fortnight. The Euro Stoxx 50 closed flat at 4671.88. Overnight in the US the S&P 500 was flat at 5344.39 and the NASDAQ rose 0.21% to 16780.61.
In a strong session Tokyo moved up 3.5% helped by a stable yen and the assumption that the unwinding of carry trades has concluded.
This morning on currencies, the pound is currently worth $1.279 and €1.1717. On Commodities, Oil (Brent) is at $81.93 & Gold is at $2461. With stock markets, the FTSE 100 is flat at 8209 and the Eurostoxx 50 is up 0.16% at 4679.
Energy super highway
Energy regulator Ofgem gave the green light to a £3.4 billion funding package to build a proposed electricity “superhighway” under the North Sea.
OPEC
OPEC cut its forecast for global oil demand growth in 2024 citing softer expectations for China, a reduction that highlights the dilemma faced by the wider OPEC+ group in raising production from October.This is the first cut in OPEC’s 2024 forecast since it was made in July 2023, and comes after mounting signs that demand in China has lagged expectations due to slumping diesel consumption and as a crisis in the property sector hampers the economy.
HSBC
HSBC has promised not to close any more branches until at least 2026, as part of its ongoing commitment to face-to-face banking amid a decline in the presence of banks on the high-street. The banking group has also committed to investing more than £50 million this year to upgrade and improve its existing branch network.
HMRC’s unpaid tax write off points to ‘abject failure’
A leading article the Times looks at an HMRC report which says £19bn in unpaid tax is unlikely to be recovered. Data shows that the level of unpaid taxes stood at £43bn in the year to March 31 and the Times says the fact that 45% of national tax debt is likely to be written off compared to 32% a year earlier “represents abject failure by HMRC.” The paper says the chances of recovery “are governed not only by external factors such as bankruptcy but by HMRC’s effectiveness as an investigator, chaser and collector.” Noting that both Labour and the Conservatives made pre-election pledges to crack down on avoidance and evasion, it warns that “the body relied upon to do this is simply giving up on billions.” The piece says that while the situation is “galling enough for taxpayers who struggle to meet their tax obligations while others dodge theirs … more salt is added to the wound by HMRC’s equally abject record on service.”
Labour urged to target the rich with taxes
Andrew Fisher, a former executive director of policy for the Labour Party, says the Government “should look to those with the broadest shoulders” if it wants to increase taxes, arguing: “While working people are on average worse off, the highest income earners have become richer.” Pointing to concerns over the removal of winter fuel payments for nearly 10m pensioners or a possible increase to fuel duty, Mr Fisher says: “If the Government wants to raise more money it’s the rich who have it, and who have more of it than ever. Tax them, not struggling pensioners or car drivers.”
Shipbuilder shares suspended indefinitely
Shares in shipyard Harland and Wolff will remain suspended indefinitely, with the firm’s leadership saying they no longer believe it can finalise its 2023 accounts. This comes as a group of investors holding around 30% of shares have voiced concern over a possible pre-pack administration that they warn could see shareholders “wiped out without any say in the matter.” The firm’s AIM-listed shares have been suspended since July, when accounting issues forced it to delay publication of its audited annual report.
Latest Insolvencies
Appointment of Administrator – THE LONDON CITY CLEAN LTD
Appointment of Administrator – TRAILAR LIMITED
Appointment of Administrator – ONE (HOUSING & SUPPORT) CIC
Appointment of Administrator – INTER EUROPA LIMITED
Appointment of Administrator – LONDON CORPORATE CLEANING SERVICES LTD
Appointment of Liquidators – PREMIER OIL EXPLORATION ONS LIMITED
Appointment of Administrator – BM REALISATIONS LIMITED
Appointment of Liquidators – H P LAUNDRY DEVELOPMENTS LIMITED
Appointment of Liquidators – COLCHIAN CAPITAL LIMITED
Appointment of Liquidators – JUST PRODUCTIONS LIMITED
Appointment of Liquidators – CREML PROPERTY LIMITED
Appointment of Liquidators – SPECIALISED SUPPORTED HOUSING LIMITED
Appointment of Liquidators – TERRA URBANA PROPERTY MANAGEMENT LLP
Appointment of Liquidators – GREEN CANDLE HOLDINGS LIMITED
Appointment of Liquidators – HARDWICK GROVE MANAGEMENT SERVICES LIMITED
Appointment of Liquidators – ART AND ANTIQUES LECTURE AND CONFERENCE SERVICES LIMITED
Appointment of Liquidators – DIGITAL CLINICAL INNOVATIONS LIMITED
Appointment of Liquidators – CAPEL CONSULTANCY LTD
Appointment of Liquidators – ICG CONSULTING LIMITED
Appointment of Liquidators – PALACE HOLDINGS LIMITED
Appointment of Liquidators – JARDEN CONSUMER SOLUTIONS (EUROPE) LIMITED
Appointment of Liquidators – ROSEACRE ENTERPRISE LIMITED
Appointment of Liquidators – HANKHAM ORGANICS LTD
Appointment of Liquidators – ROBINSON WATERS ARCHITECTS LTD.
Appointment of Liquidators – FIXED GROUP LTD
Petitions to wind up (Companies) – CRYSTAL WHOLESALE LIMITED
Petitions to wind up (Companies) – MKB HOTELS LTD
Appointment of Liquidators – AROS (ISLE OF SKYE) LIMITED
Appointment of Liquidators – ERP CORE FUNCTION SUPPORT LIMITED
Appointment of Administrator – SAVALAS LTD.
Appointment of Liquidators – MASALA WORLD UK LTD
Petitions to wind up (Companies) – ZUCCA BISTRO LIMITED
Appointment of Liquidators – ARRAN AERONAUTICS LIMITED
Appointment of Liquidators – J&L CONTRACTS LTD
Appointment of Liquidators – JAMES FAMILY LIMITED
Appointment of Liquidators – S.RAGNO PHARMA CONSULTING LTD
Appointment of Liquidators – HATCHER CONSULTING LTD
Appointment of Liquidators – GREYMARE GROUP LIMITED
Appointment of Liquidators – KATHERINE BEAUMONT LTD.
Petitions to wind up (Companies) – ASG ENTERPRISES LIMITED
Petitions to wind up (Companies) – TITANS SECURITY LIMITED
Petitions to wind up (Companies) – DELL BROTHERS BUILDERS (SW) LIMITED
Appointment of Liquidators – ENCELADUS ENGINEERING LTD
Appointment of Liquidators – CLOUD COMMUNICATIONS SERVICES LIMITED
Appointment of Liquidators – RB CREATIVE LIMITED
Petitions to wind up (Companies) – HORTOR LIMITED
Petitions to wind up (Companies) – WINFIELD LOGISTICS LIMITED
Petitions to wind up (Companies) – ROSEMOUNT FABRICS LIMITED
Petitions to wind up (Companies) – MJ TYSON SECURITY LTD
Petitions to wind up (Companies) – L&B HAULAGE LIMITED
Petitions to wind up (Companies) – SELINA OPERATIONS MIDLANDS LTD
Appointment of Liquidators – KITSILANO LIMITED
Appointment of Liquidators – ANDREW CHRISTIE CONSULTING LTD
Appointment of Liquidators – IPS BUILDING SERVICES GROUP LTD
Appointment of Administrator – THE FLOOR ROOM LIMITED
Appointment of Liquidators – GEETEE INVESTMENTS LIMITED
Appointment of Liquidators – CARRAIG SOLUTIONS LTD
Appointment of Liquidators – SUNDER LIMITED
Appointment of Liquidators – 3VISION DISTRIBUTION LTD
Appointment of Administrator – LINK ELECTRICAL SERVICES (NW) LIMITED
Petitions to wind up (Companies) – SPG INSTALLATIONS LIMITED
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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.