Business News 14th July 2017
This is the hopefully enjoyable and informative, bite size business news compiled by the Credit Protection Association on Friday 14th July 2017 for its members and visitors.
Markets Round up
Yesterday The FTSE 100 was pretty much leve ending the day on 7413 while the Euro Stoxx 50 climbed 0.36% to 3528. Banks and retailers lifted the UK index in the morning session but the rise was short lived. AstraZeneca lead the fallers with news that the CEO may be being poached by Teva Pharmaceuticals. Sterling was marginally stronger building on the previous day’s gains after marginally better than expected labour market data kept bets for a tightening of Bank of England policy on the table. There were modest gains in the US and Asia with the S&P500 up 0.2% to 2448, the Nasdaq up 0.2% to 6274, the Nikkei up 0.1% to 20119 and the Hang Seng up 0.2% to 26389. Global stocks were broadly up with the MSCI world index up 0.2% to 1937. The pound rose against the dollar to 1.2956 and against the euro to 1.1345. Brent oil rose 1.7% to 48.23 and Gold fell 0.34% to 1218.
UK accepts there will be a divorce bill
The United Kingdom acknowledged officially for the first time that it will have to pay money to the European Union as it withdraws from the EU bloc, seeking to damp down a row over the country’s so-called Brexit bill. “The government has been clear that we will work with the EU to determine a fair settlement of the U.K.’s rights and obligations as a departing member state,” Brexit Minister Joyce Anelay, a member of the House of Lords, said Thursday in a written statement to Parliament that referred explicitly to the “financial settlement” with the EU. “The government recognizes that the U.K. has obligations to the EU, and the EU obligations to the U.K., that will survive the U.K.’s withdrawal — and that these need to be resolved.”
Credit Card defaults
Credit card defaults jumped at the fastest pace since the end of the Great Recession in the three months to June, as the Bank of England warned more households were likely to miss payments in the coming months. The survey of the UK’s biggest banks and building societies showed the balance of lenders who said default rates on credit card loans rose in the second quarter “increased significantly” compared with the previous quarter, to its highest since the third quarter of 2009. British banks are set to reduce their unsecured lending in the third quarter, the latest Credit Conditions Survey from the Bank of England showed. Lenders said the availability of secured and unsecured credit to households will decrease over the next three months to mid-September. An expected slight decrease in availability of secured credit to households reflects a changing appetite for risk, the bank said. In the second quarter, the availability of secured credit to households increased, while that for unsecured credit decreased from the prior period.
Treasury Committee Chair
Conservative MP and hard-Brexit opponent Nicky Morgan has been elected to chair the parliamentary committee which scrutinises the Treasury, Bank of England and the financial services sector. Morgan was elected chair of the Treasury Committee after a secret ballot of Members of Parliament, winning 290 votes in the final round of voting. Her closest rival was prominent Conservative and Brexit supporter Jacob Rees-Mogg, with 226 votes. She replaces former Chairman Andrew Tyrie, who retired as an MP before June’s general election. Tyrie gained a reputation for fierce interrogation of fellow politicians, regulators and corporate executives and led the Parliamentary Commission on Banking Standards in 2013.
Reliance on the rich threatens economy
The Office for Budget Responsibility has warned that Britain’s economic security is being put at risk by the growing reliance on taxing its wealthiest. The OBR Fiscal Risks Report says that over the past decade, the proportion of income tax paid by the top 1% has risen from 24.4% to 27.7%. It warned that this “reliance” on a small number of people paying so much tax has made the economy more “vulnerable” to financial shocks. The OBR identifies other tax risks including: the effect of Brexit on the UK’s “tax-rich” financial sector; the continuing rise in self-employment; the possible declines in fuel and stamp duty; and the prospect of a Brexit ‘divorce bill’.
Insolvency rates rise
Individual insolvency rates in the UK increased last year for the first time since 2009, with a growing gender gap also appearing. Women were involved in more than half of the insolvencies in 2016, up from less than a third at the turn of the century. There were 20.6 insolvencies per 10,000 women in 2016, compared with 18.7 insolvencies per 10,000 men.
Content marketing can draw in customers
The Telegraph looks at how a growing number of SMEs are turning to content marketing to draw in customers, without directly selling or advertising to them. The method involves text articles, videos or social media posts about a business’s product or service that are not explicitly promotional. Janet Murray, founder of Soulful PR, comments: “For example, if you offer accountancy services, this might mean creating a blog post about how to find a great accountant.”
The Daily Telegraph, Business, Page: 8
Openreach being monitored
Regulator Ofcom said that it will establish a separate unit to monitor the performance of BT’s broadband network operator Openreach. Ofcom announced measures to ensure Openreach will be held to account, as it becomes legally separate from BT, so it delivers for both phone and broadband users. “We expect the reformed Openreach to engage with industry to deliver widespread fibre networks, offering fast, reliable broadband. The new company should provide a good service to meet the needs of all the people and businesses who rely on its network, together with a step change in quality of service,” Ofcom said.
European Car Sales
Nearly 1.5m new cars were sold in the European Union last month, the best June result since 2007, the European Automobile Manufacturers Association said. On a yearly basis, the market expanded by 2.1%, with the best results registered in Italy and Spain, while Germany and the UK bucked the trend, with sales slipping by 3.5% and 4.8% respectively. From January to June, more than 8.2m cars were sold, up 4.7% on the first half of 2016. Italy and Spain were again the best performers among major EU markets, with year-on-year increases of 8.9% and 7.1%, ACEA said.
Government confirms pension tax relief cut
The government has confirmed it will go ahead with a proposed cut to the annual pensions savings limit from £10,000 to £4,000 a year for those who have already made use of pension freedoms.
Pensions Regulator to toughen up
The Pensions Regulator is to toughen up its policing of the industry, after a Department for Work and Pensions report recommended giving it greater “proactive” powers to crack down on corporate pension scheme failings. Unveiling the results of the review, the regulator said its approach of “educate, enable and enforce”, which places using its powers as a last resort, is “no longer appropriate”. The review was born from criticism over the handling of the BHS pensions scandal, where it was criticised for being slow to intervene.
City AM
Weak pound entices tourists
The ONS has said the weakness of sterling was behind a surge in the number of tourists visiting the UK in the first three months of 2017. The number of holidaymakers coming to the UK rose by 21.1% – although the number of business visitors declined. Overall there were a record 8.3m visits in the quarter, a rise of nearly 10% on the same period in 2016. While lower sterling has made it cheaper for tourists to visit Britain, it has not discouraged Britons from going abroad. Figures revealed that Britons spent £8.6 billion on trips abroad, a rise of 11.7% from the previous year.
BBC News
Visa plans to pay businesses to ban cash
Visa could pay British businesses to stop accepting coins and notes, after its chief executive vowed to “put cash out of business”. The Telegraph reports that Visa will offer shops and restaurants lump sums worth thousands of pounds, as well as free contactless technology upgrades, if they ensure that customers only pay by debit card, credit card or digital payment such as Apple Pay.
The Daily Telegraph, Page: 1
Previous News pages
Business News 13th July 2017
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