Business News 13th July 2017

This is the hopefully enjoyable and informative,  bite size business news compiled by the Credit Protection Association on Thursday 13th July 2017 for its members and visitors.

Markets Round up

The FTSE 100 rallied higher yesterday, up 1.2% to 7417, helped by mining and oil shares. Oil was up over 1% as the US government cut its crude production outlook for the next year as fuel inventories plunged.  In addition to the strengthening oil price, Premier Oil jumped 27% following a “significant” oil discovery off the coast of Mexico. It was reported yesterday that UK wage growth performed better than expected and the unemployment rate fell to the lowest since 1975. Federal Reserve Chairwoman Janet Yellen suggested the bank’s rate-hike cycle does not have long to go before coming to an end, with low wage growth and inflation reasons for caution. European shares closed in a buoyant mood as investors digested the latest comments from Federal Reserve Chair Janet Yellen in the U.S. while wading through corporate earnings results with French shares up 1.7% and German shares up 1.6%. The S&P500 rose 0.7% to 2443 and the Nasdaq rose 1.1% to 6261 as the US stock markets responded positively to Yellen’s measured guidance. Asian stocks continued the trend with the Hang Sang rising 1.1% to 26328, its strongest in two years and markets broadly up everywhere but Japan where there was some profit taking and the strengthening yen was a dampener. The dollar was down against all the G-10 peers .  The pound recovered some ground against the Euro to 1.134 and rose against the dollar to 1.294. Oil was little changed with Brent at $47.36 and Gold rose to $1222.3


UK unemployment fell by 64,000 to 1.49 million in the three months to May, according to official figures from the Office for National Statistics (ONS).  The unemployment rate fell by 0.2% to its lowest since 1975, at 4.5%, the ONS added. But wage increases continued to fall further behind inflation. Excluding bonuses, earnings rose by 2.0% year-on-year. However, inflation had hit an almost four-year high of 2.9% in May. When the impact of inflation is factored in, real weekly wages fell by 0.5% compared with a year earlier

US interest rates

Janet Yellen guided  that the Federal Reserve will continue to tighten its monetary policy as falling unemployment on expectations for further moderate growth in the economy, the head of the central bank said. Policymakers also still thought it likely that they would start to unwind the Fed’s balance sheet in 2017, as long as their projections for growth panned out. In remarks prepared for her semi-annual report to Congress, US central bank chair Janet Yellen pointed out that the unemployment rate had fallen “modestly” below the Fed’s estimate of its sustainable long-term level.

UK Economy

The UK economy grew at a subdued rate in the second quarter of 2017, according to the British Chambers of Commerce  in its Quarterly Economic Survey. In the manufacturing sector, the balance of firms reporting increasing domestic sales held at +20, while domestic orders fell slightly to +15 from +16. At the same time, the balance reporting export sales rose marginally to +27 from +26. In services, the balance of firms reporting increasing domestic sales fell to +19 from +22 and domestic orders dropped to +15 from +19. The balance reporting increasing export sales came in at +13 versus +10 in the prior period. The balance of manufacturers confident that turnover would improve over the next 12 months increased to +46 from +44, and the balance for services to +40 from +39. The percentage of businesses in both manufacturing and services sectors attempting to recruit fell somewhat, but remain relatively high. “The subdued growth picture also underlines the importance of getting as much clarity on the Brexit transition as possible, as quickly as possible over the coming months,” Adam Marshall, Director General of the BCC, said. The BBC reports that such pay figures may cause the Bank of England rethink the need to raise interest rates

Insolvency Service cracks down on luxury spending

The Insolvency Service is issuing more bankruptcy restriction orders to clamp down on people who spend their money on luxuries rather than paying off their debts. The Service handed out 97 orders to penalise bankrupts for the “dissipation of assets” in 2016-17, up from 78 during the previous financial year. “Tolerance is wearing thin for debtors who shirk their duty to repay what they owe,” said Steve Ramsbottom of Moore Stephens. Alec Pillmoor, head of insolvency at RSM, added: “I would expect the insolvency service to keep this up to send a signal that those who disregard their credit obligations.” Official figures show 24,531 individuals were subject to insolvency proceedings in the first three months of this year, the most since the second quarter of 2014.

Repeal Bill

The Government’s flagship piece of Brexit legislation, the Repeal Bill will be published today, which will open the parliamentary debate over the nature of the UK’s departure from the EU. The Bill will bring EU laws and regulations into UK jurisdiction in order to provide continuity after Brexit. The Bill is expected to be debated in the autumn and will have to be passed by March 2019, the set deadline for Britain’s withdrawal.

Britons would pay higher taxes to end austerity

A Sky Data poll has found more than half of Britons would accept higher taxes if it meant an end to austerity. Some 56% support ending austerity and increasing Government spending, even if it meant they would personally pay higher taxes. Meanwhile, an IFS report says Philip Hammond would have £33bn extra to spend this autumn if he abandons plans to balance the nation’s books by the middle of the next decade. The research found that leaving the deficit at its 2016/17 level of 2.4% of GDP would allow a £17bn boost for public services, £5bn of tax cuts and an £11bn increase in planned benefit spending.

Sky News

Increase in drawdown pensions without advice

More people are taking out so-called drawdown pensions without taking advice, the Financial Conduct Authority has warned. It added that additional protections might be needed to ensure that savers get the best deal. The FCA’s study of the retirement market found 30% of consumers go in to drawdown without guidance compared with just 5% before such freedoms were introduced in April 2015. Of those who took all the money out of their pension pots since 2015, the FCA said 32% put the money into Isa accounts or other savings plans, 25% spent some or all the cash, 20% invested the money elsewhere, while 14% used the money to pay off debts.


Google has won a legal case against French authorities, meaning that it will not have to pay 1.1bn euros (£970m) in back taxes. The technology giant had been accused of illegaly routing sales in France through Ireland to avoid paying higher corporation tax. In 2015 it paid 6.7m euros in corporate taxes in France.

France announces £10bn in tax cuts

In an unconnected move, The French government is to introduce nearly £10bn worth of tax cuts in an effort to boost French companies’ competitiveness and attract foreign investment. Prime minister Edouard Philippe said corporation tax will be lowered to 25% by 2022, payroll taxes on bankers will be reduced and France’s wealth tax on assets worth more than €1m will be overhauled.

Bank Of England

The Bank of England should consider unwinding its 435 billion pound quantitative easing program earlier than planned, BoE policymaker Ian McCafferty told the Times in an interview. The BoE’s current policy dictates not starting to reverse QE until interest rates are materially higher than at present. No other serving BoE policy maker apart from McCafferty has proposed changing this. The BoE views interest rates as a more precise monetary tool than QE. Even a partial reversal of QE would involve a commitment to sell gilts back to the market over many months.


That’s a big iceberg

It’s not business news but an iceberg, one of the largest ever seen, was set adrift after snapping from a West Antarctic ice shelf that will be closely watched for signs of collapse, scientists said yesterday. A crack in the Larsen C ice shelf, a drifting extension of the land-based ice sheet, finally broke through after inching its way across the formation for years. It created an iceberg of about 2,200 square miles, with a volume twice that of Lake Erie, one of the North American Great Lakes. “The iceberg weighs more than a trillion tonnes, but it was already floating before it calved away so has no immediate impact on sea level,” said a team of researchers from the MIDAS Antarctic research project.

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Previous News pages

Business News 12th July 2017

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