Business news 13 September 2022
James Salmon, Operations Director.
UK Unemployment rate hits 48 year low. Accounting sector on course for record year. Natural Gas. Liverpool Dockers to strike. And more business news.
UK Unemployment rate hits 48 year low
The UK’s unemployment rate fell 0.2% to 3.6%, its lowest level since 1974 in the three months to July, latest official figures show. However, wages are still failing to rise in line with inflation, with real pay falling 2.8%. The low unemployment rate is driven by those who have lead the workforce, with some 21.7% now economically inactive. Falls in the number of vacancies advertised would indicate that a change in the jobs market is coming.
Accounting sector on course for record year
Turnover in the UK’s accounting sector increased 0.69% from June to July, hitting £3.54bn. Figures from the Office for National Statistics (ONS) show revenues increased 16.65% year-on-year, with accounting firms continuing to profit from volatile economic conditions.
Professor Atul Shah said the ONS data serves as evidence that accounting firms are “recession proof,” with major accountancy firms seeing consistently reliable income from their audit segments. He added that firms in the sector have been boosted further by surging demand for consulting services. Julie Matheson, regulatory partner at law firm Kingsley Napley, said the research shows the UK’s accounting sector remains “tremendously robust” in the face of economic volatility.
Markets
The US dollar has continued to give up gains as inflation is anticipated to have cooled in the US affecting expectations for future rate rises. Overnight US markets advanced as the DOW rose 0.71%, the S&P 500 rose 1.06% and the NASDAQ rose 1.27%.
Natural Gas
Prices have started to fall as the Eu adds details to its planned intervention, curbing demand. However, prices still remain over 8 times normal rates.
Liverpool Dockers to strike
Dockworkers at the Port of Liverpool rejected the latest pay offer and look set for a two-week strike at the nation’s fourth-biggest port for global trade further threatening the British economy. Peel Ports Ltd. offered a 7% pay rise and a one-time payment of £750. The vote was unanimous to reject it. 24 pickets are due to start the day after the Queens funeral.
Goldman Sachs
According to reports the investment bank is set to make huge cuts in its workforce as earnings fell 47% in the last year.
500 mortgage deals pulled in a month
There are almost 1,000 fewer mortgage deals on the market than there was a year ago, according to Moneyfacts.co.uk, with analysis showing that more than 500 deals have been withdrawn since last month. The number of available fixed and variable rate home loans has fallen to 3,890, with this marking the lowest level since April 2021. There are now 517 fewer residential mortgages available than in August. In September 2021 there were 4,812 mortgage deals available, 922 more than there are this month. There are also now 1,425 fewer mortgages than there were at the start of December 2021, with the Bank of England rolling out several base rate increases since then. The Moneyfacts.co.uk report shows that the average standard variable rate now stands at 5.40%. This is the highest rate since December 2008.
Brits outpace Europeans in digital banking uptake
People in the UK are significantly ahead of other Europeans when it comes to embracing digital forms of banking. Analysis shows that bank users in Britain are nearly twice as likely as other Europeans to favour applying for financial products and services online via website or app. The research found that over half of Europeans prefer to apply for new financial products – such as current accounts, credit cards or loans – in-person at a local bank branch. However, in the UK, only around a fifth would opt to apply in-person. The research was commissioned by consumer and business credit information provider CRIF and sought to gauge attitudes towards financial services.
Regulation rethink is a ‘recipe for disaster’, says former FCA official
Former Financial Conduct Authority (FCA) official Matthew Nunan has warned that Government plans to exert greater control over financial rule-making are a “recipe for disaster.” With ministers looking to grant the Government powers to overturn decisions made by independent City watchdogs, Mr Nunan, a former head of wholesale enforcement at the FCA, said it was not clear why politicians – “few of whom are qualified economists or financial service professionals” – would make “better decisions than financial regulators.” This comes with the Financial Services and Markets Bill set to grant ministers “call in” powers that will allow the Government to intervene in decisions deemed to be in the public interest. Mr Nunan said that while he can understand the need for politicians “to set policy goals and to guide state functions and regulators in the direction of travel at a macro level. Having the ability to overturn individual decisions at the micro level seems a recipe for disaster.”
Why King Charles will pay no IHT on the Queen’s fortune
Several papers look at inheritance tax following reports that King Charles is not liable for the levy on the wealth and assets he is set to inherit from the Queen due to a deal negotiated between the crown and the Government in 1993 which effectively exempts the monarch in such situations. The deal confirming the exemption of the monarchy from inheritance tax was never written into law, but was part of a more informal “memorandum of understanding” between the government and the palace. The Memorandum of Understanding on Royal Taxation says some royal assets are held by the Queen as “as Sovereign rather than as a private individual” and that “it would clearly be inappropriate for inheritance tax to be paid in respect of such assets”. The Independent notes that the sovereign pays income and capital gains tax on a “voluntary basis” and inheritance tax on the basis described in the memorandum, a basis that did not include the monarch dying and passing their wealth onto the next monarch. The Standard highlights that according to the Sovereign Grant Act 2011, “the Monarch is not legally liable to pay income tax, capital-gains tax, or inheritance tax because the relevant enactments do not apply to the Crown.” The Queen, it adds, started paying income and capital-gains tax on the estate of her own accord in 1993.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.