Business News 14th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Wednesday 14th June 2017 for its members and visitors.

Theresa May softened her tone on the country’s negotiations to leave the EU, welcoming the “good process” set out by the bloc for the talks. Speaking alongside French President Macron after a working dinner in Paris, May said that with “willingness and intent on both sides to build… [a] future partnership,” she believed a deal could be reached that would be in the interests of all sides. May, who last week lost her majority in a general election she had called in the hopes of bolstering her mandate for the talks, said she had confirmed to Macron that “the timetable for the Brexit negotiation remains the same and will begin next week.”

British American Tobacco expects profit growth to be weighted to the second half of the year, due to the phasing of volume shipments, next generation product investments and marketing spend. The group said the business continued to perform very well and trading was in line with expectations with continued market share growth, driven by the Global Drive Brands. It said first half EPS was expected to benefit from a significant currency translation tailwind of around 14%.

Bank of Mum and Dad risks IHT trap

A survey by Key Retirement has found half of parents and grandparents do not understand the tax rules on gifting. Nearly three out of four (73%) say the rules are very complicated, while nearly two out of five (38%) are not aware their estate might be liable for IHT on gifts to family members. The research also showed 58% of parents and grandparents want to be able to help children and grandchildren on to the property ladder. Dean Mirfin, technical director at Key Retirement, warned that many gifts would needlessly fall into the IHT net because they took the form of a lump sum instead of being spread over several years. He added: “We would support tax breaks on gifts and early inheritance in those instances where the incentives can be used for major intergenerational gifts, which have a greater perceived societal benefit.”

Financial Times FT Adviser Daily Express, Page: 27

Tax scam warning

Taxpayers are being warned to ignore scam text messages claiming to be from HMRC following a spate of attempted frauds.

Daily Mail, Page: 45

Economics degree pays off

A new government dataset reveals that an economics degree from the London School of Economics is the golden ticket as far as graduate salaries go, with one in four holders earning more than £120,000 after five years. Those taking the economics and management degree at Oxford are also among the best-paid graduates. The median salary is £76,000, with one in four earning more than £118,000. A degree from one of the 24 elite universities in the Russell Group is particularly lucrative and can earn a graduate £50,000 more than a student who did the same subject at a less prestigious college.

The Times, Page: 4 Daily Mail, Page: 13 Independent I, Page: 13 The Daily Telegraph, Page: 10

SFO set to stay

Theresa May has been urged to abandon her plan to abolish the Serious Fraud Office. Senior Conservatives warned the PM that her failure to secure a majority meant her plan to scrap the SFO was now unlikely to command enough Parliamentary support.

Evening Standard, Page: 8-9

Half of SME owners neglect company shares in will

Legal & General’s ‘State of the Nation’s SMEs’ report reveals 51% of small business owners have left no instructions in their will or made any special arrangements regarding shares. Only 26% of shareholders said that they would buy the shares left following the death of a fellow shareholder, with 51% having to rely on their personal wealth to do this. One in five (21%) said that they thought that their beneficiaries would inherit and become active in the business. A further 16% would simply look at selling their shares to a third party. Nearly four in ten (36%) of SMEs with a worth of over £5m also had no share protection insurance.

Commercial Reporter Professional Adviser

Jaeger creditors set to miss out

Unsecured creditors to Jaeger are owed a total of £49.17m, according to an administrator’s report filed by Alix Partners. However, only creditors to Jaeger Company’s Shops Limited, the main trading company, which are owed £29.92m, are expected to make any recovery, albeit less than 2p in the pound.

The Times

Retail Acquisitions’ liquidators appointed

Milner Boardman and Duff & Phelps have been appointed as joint liquidators to Retail Acquisitions, the consortium that owned BHS at the time that the retailer entered administration.

Retail Week Sky News

House price growth picks up steam

The typical home in the UK cost £220,100 in April, a rise of £3,500 on the previous month and a £12,000 increase from the same month a year ago, according to the ONS. It said that average house prices in the UK have increased by 5.6% in the year to April, accelerating from 4.5% in the year to March. “These figures go against the recent trend of a Brexit-related slowdown that we predicted last year but remain consistent with our guidance of 2% to 5% growth in 2017 as a whole,” said Richard Snook, senior economist at PwC. Meanwhile, figures from the CML show home buyers borrowed £9.6bn in April, down 14% on March’s total but up 19% on April 2016.

The Times, Page: 44 The Daily Telegraph, Business, Page: 5

Foreign investors snap up London homes

A survey of international investment in London housing shows foreign buyers snapped up 3,600 of London’s 28,000 newly built homes between 2014 and 2016. More than 70% of the homes bought by foreigners were as rental investments, and in 15% of cases the properties were bought by companies, one in six of which were in offshore tax havens.

The Guardian, Page: 15

Pensions regulator warns over dividends

The Pensions Regulator says the ratio of deficit repair contributions to dividends at 210 companies in the FTSE 350 dropped from around 10% in 2011 to 7% by the end of the 2016 financial year.

Financial Times, Page: 22

Lloyds helped HBOS fraudster to buy prime asset cheaply

The FT reports that Lloyds Banking Group helped the former directors of a bankrupt company involved in the HBOS scandal to buy back its only valuable asset at a cut price.

Financial Times, Page: 2

PM urged not to abandon austerity

Theresa May has been warned not to abandon austerity amid indications that she is willing to start spending again to remain in power. Senior Conservatives said the “dynamics of sound financial policy” have not changed just because the Tories now need the support of the DUP to secure a majority. A senior Tory MP said: “One of the big issues is the size of the debt and the cost of borrowing and we need to be pretty clear about what we are borrowing for. I don’t think this changes the dynamics of sound financial policy.” An editorial in the Standard called claims that austerity will be abandoned as “worrying”. The paper said a so-called “end to austerity” would lead to a “loss of economic credibility”.

The Daily Telegraph BBC News Evening Standard

UK inflation rate hits 2.9%

The UK inflation rate rose to 2.9% in May, up from 2.7% the previous month, official figures from the ONS show. It is the highest rate since June 2013 and keeps inflation above the Bank of England’s 2% target.

The Times Financial Times The Daily Telegraph The Guardian, Page: 4 Daily Mail, Page: 2 Independent I, Page: 6-7

Asian Markets

Asian shares were mostly higher as investors await word from the Fed on rates and the outlook for winding down its massive balance sheet.

U.S. Markets

U.S. shares with the U.S.30 hitting an all-time high as bank and technology shares gained. The U.S.500 technology sector rose 0.71%, recovering from its biggest two-day decline in nearly a year.

Oil

Prices fell around after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back on output.

Gold

crept up early as the market waited for the end of a two-day U.S. Federal Reserve meeting, with the central bank expected to hike interest rates and give indications on its monetary policy for the rest of the year.