Business news 14 February 2025
Wealthy lose faith in UK economy. Trump’s tariffs threaten UK economy. Rachel Reeves investigated. GDP, interest rates, regulators, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Wealthy lose faith in UK economy
Confidence among high net worth individuals (HNWIs) in the UK economy has plummeted to a record low, with only 48% expressing faith, down from 84% six months ago, according to the latest Saltus Wealth Index Report. This decline follows a series of unpopular policies and gloomy economic indicators, with many HNWIs fearing further tax increases. Mike Stimpson from Saltus remarked: “The extent to which the confidence of high net worth individuals has collapsed demonstrates a missed opportunity for the new Government.” The report highlights that over 80% of HNWIs anticipate tax hikes in the coming year, particularly in capital gains tax, income tax, and inheritance tax. Dr Michael Peacey of the University of Bristol noted that the decline reflects significant shifts in sentiment regarding taxation, with many regretting their support for Labour due to tax changes.
Trump’s tariffs threaten UK economy
The UK economy is facing a potential £24bn impact due to President Donald Trump’s announcement of reciprocal tariffs on countries imposing VAT. The move could lead to a 21% levy on UK goods exported to the US. The National Institute of Economic and Social Research (NIESR) warned that such tariffs could reduce UK economic growth by 0.4 percentage points over the next two years. William Bain, head of trade policy at the British Chambers of Commerce, said the proposals would create “more cost and uncertainty for investors, businesses and consumers.”
Rachel Reeves ‘investigated over expenses’ in HBOS banking job
Sir Keir Starmer has expressed full confidence in his Chancellor after it was claimed that Rachel Reeves had been involved in an “expenses scandal” while working at Halifax Bank of Scotland (HBOS) from 2006 to 2009. A whistleblower had complained that Reeves and two colleagues were profligate with their expenses, according to the BBC. But a spokesperson for the Chancellor has denied any knowledge of an investigation, asserting that all expenses were properly submitted and signed off. Meanwhile, Reeves’ claims to have been employed at the Bank of England for ten years have been thrown into doubt after her LinkedIn profile revealed she only spent five and a half years working at the Bank – including nearly a year studying.
UK economy shows slight growth
The UK economy experienced modest growth of 0.1% in the fourth quarter of 2024, easing immediate recession fears, according to the Office for National Statistics (ONS). Despite this, a measure of GDP per head revealed a contraction for two consecutive quarters, indicating ongoing challenges. The Government faces pressure to stimulate growth amid rising inflation and increased costs for essential services. The Bank of England’s projections suggest a growth forecast of only 0.75% for 2025, down from earlier expectations.
Pill ‘cautious’ about further rate cuts
Huw Pill, Chief Economist at the Bank of England (BoE), has stressed the need for caution in cutting interest rates as the process of disinflation had not yet been completed. Despite a recent rate cut, inflation remains above the BoE’s 2% target, currently at 2.5%, and is expected to rise to 3.7% later this year. Pill went on to point out that the main issue affecting the economy is supply-related, rather than demand-driven, and warned that sharp rate cuts may not resolve long-term inflationary trends. Employers anticipate raising wages by an average of 3.7% this year, which Pill believes is not aligned with achieving the 2% inflation target.
UK may need fewer regulators, Business Secretary suggests
Business Secretary Jonathan Reynolds has raised concerns about the number of regulators in the UK, suggesting a potential overhaul of the regulatory landscape. This comes as the Government outlined a new mandate for the Competition and Markets Authority (CMA), aiming for a more growth-focused approach. The draft “strategic steer” for the CMA stresses the need to enhance the UK’s attractiveness for international investment. CMA chief executive Sarah Cardell responded by announcing plans to expedite merger consultations, reducing the review period from 65 days to 40 days. “We know speed of decision making is vital to reduce uncertainty and costs for businesses,” Cardell said. The CMA’s recent leadership changes reflect ongoing frustrations with its perceived interventionist stance.
Markets
Yesterday, the FTSE 100 closed down 0.49% at 8764.72 and the Euro Stoxx 50 closed up 1.75% at 5500.50. London’s blue-chip stocks under-performed their counterparts in France and Germany, weighed down by a series of disappointing earnings reports. Barclays, in particular, faced a notable decline, falling as much as 6%. Unilever’s shares also dropped after revealing plans to list its Ice Cream business, alongside a cautious outlook for the new financial year.
The euro-area economy managed to eke out growth at the end of last year after all. Eurostat revised up its initial estimate to show GDP increased 0.1% in the fourth quarter.
Overnight in the US the S&P 500 rose 1.04% to 6115.07 and the NASDAQ rose 1.5% to 19945.64.
This morning on currencies, the pound is currently worth $1.258 and €1.201. On Commodities, Oil (Brent) is at $75.38 & Gold is at $2934. On the stock markets, the FTSE 100 is currently down 0.22% at 8745 and the Eurostoxx 50 is up 0.34% at 5519.
Tax crackdown on cash-in-hand jobs
Dog breeders, pet sellers, and waste management workers in Britain are facing a tax crackdown due to concerns over how cash-in-hand work may be contributing to the black economy. An estimated 520,000 individuals in these sectors must now register for tax to obtain or renew their operating licences. HMRC has identified these industries as “vulnerable to hidden economic activity.” The black economy has reportedly grown by 80% over the past seven years, with one in 11 adults now involved. It comes after taxi drivers and scrap metal dealers were told in rules introduced in 2022 that they had to be registered for tax to obtain or renew their licences. HMRC anticipates that overall, around 800,000 businesses will be affected by the new measures, which require proof of tax registration for licence renewals.
Starmer runs from farmers’ protest over tax
Sir Keir Starmer has defended the Government’s changes to inheritance tax relief for farms amidst a farmers’ protest during his visit to Milton Keynes. He stated that voters must choose between additional funding for the NHS and maintaining tax breaks for farmers, saying: “You can’t have both.” However, the PM was criticised for failing to talk to the farmers choosing to drive off instead. Farmer Richard Miles, who travelled from Welford, Northamptonshire, to take part in the protest, said: “We are not being listened to at all, that’s why we feel we have to come and see him in person.”
Energy efficiency upgrades could cost £18,000 each
New energy efficiency standards in England and Wales could impose significant financial burdens on landlords, with costs potentially reaching £18,000 for upgrades. Angela Rayner, the Housing Secretary, and Ed Miliband, the Energy Secretary, have proposed that all privately rented homes achieve a minimum energy performance certificate (EPC) rating of “C” by 2030. Currently, around 60% of the 5m households in the private rented sector are rated EPC D or below, with total improvement costs estimated at £21.6bn. Gary Hall from Knight Frank said: “Landlords are consistently tackling a series of evolving requirements from the Government.” Chris Norris from the National Residential Landlords Association warned that the Government’s plans are unrealistic, estimating that 2,000 properties will need upgrades daily to meet the new standards. The Government is consulting on potential financial support measures, including a cap on costs and grants to assist landlords.
Accountants at cash strapped council probed
An investigation has been initiated by the Financial Reporting Council (FRC) into the conduct of two accountants at Woking Borough Council (WBC) following the council’s financial collapse. The probe focuses on the council’s “operations and investment activities” from 31 March 2017 to 31 March 2023, during which WBC declared itself effectively bankrupt in June 2023, facing debts exceeding £2bn. Ray Morgan, the former chief executive of WBC, confirmed his involvement in the investigation but refrained from further comment. Councillor Ann-Marie Barker stated: “Woking residents deserve complete transparency and for those responsible for the borough’s financial issues to be held accountable.”
Natwest
NatWest said it exceeded its annual outlook during a “strong financial performance in 2024”. NatWest said total income in 2024 fell 0.3% to £14.70 billion in 2024 from £14.75 billion. Pretax profit, however, rose 0.3% to £6.20 billion from £6.18 billion. Total income topped consensus of £14.59 billion, and pretax profit beat consensus of £6.07 billion. Net interest income alone rose 2.0% to £11.28 billion in 2024 from £11.05 billion in 2023.
HSBC
HSBC is set to announce $1.5 billion of yearly cost savings, the Financial Times reported. HSBC is set to unveil the measures next week Wednesday when it announces annual results, the FT noted. The moves will land the lender savings of $1.5 billion after one-time costs, the FT reported, citing two people familiar with the situation. Back in October, HSBC announced a “simplified organisation structure”. From the start of 2025, it will operate through four business lines, it explained back in October. They will be the Hong Kong division, the UK arm, Corporate & Institutional Banking and International Wealth & Premier Banking.
Arm
The British chip designer, is reported to be planning to build its own chip. The firm has signed Meta (Facebook) as its first customer for the chip, according to the Financial Times, putting Arm in direct competition with its customers, to whom it typically licenses chip designs.
Thames
Thames Water are appealing to the UK’s Competition and Markets Authority to examine the decision by OFWAT the industry regulator on the company’s business plan. Britain’s largest water and sewage company said Ofwat’s Final Determination for the five years to 2030 doesn’t “appropriately support the investment and improvement” required, according to a company statement today.
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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.