Business News 14th September 2017

CPA hopes to inform, with its daily bite-size business news on Thursday 14th September 2017, filled with stories we think will interest Business people.

Markets Round up

Yesterday was a choppy session for the FTSE100 closing down just 21 points at 7379, having traded as low as 7336.23 on the back of sterling strength. For most of the day, the heavyweight miners dragged the UK’s benchmark index lower weakened by the strength of the pound leading up to tomorrows Bank of England interest rate decision. Tesco investors appeared nervous ahead of a trading statement due tomorrow from takeover target Booker Group. Shares were down 2.4% to 198.7 shortly at the end of trading. The oil majors had a positive close, as the price of oil pushed higher on the back of a bullish report from the International Energy Agency, stating that the global surplus was starting to shrink as demand rises and various production cuts begin to take effect. U.S shares closed slightly higher with the S&P500 and Nasdaq both up 0.1% to 2498.37 & 6460.19, notching record highs, as a gain in the energy sector offset losses in tech. Asian shares were moderately lower after the release of softer-than-expected China data which indicated the economy is cooling. Markets also digested the rise in U.S. Treasury yields overnight following tax reform headlines out of Washington.

Oil prices rose on Wednesday after the International Energy Agency (IEA) said a global surplus of crude was starting to shrink due to robust global demand and an output drop from OPEC and other producers. WTI is at $49.3 and Brent is at $55.1. Gold prices dipped on Wednesday, erasing earlier slim gains as the dollar index moved into positive territory, though a retreat in global stocks after Tuesday’s record high kept the metal hemmed within a narrow range. This morning Gold sits at 1322.7. The pound has held at 1.11 euros and 1.32 US dollars ahead of the BOE meeting.

Unemployment drops to 42-year low

Unemployment fell by 75,000 in the three months to July, bringing the jobless rate down to 4.3% from 4.4% in the previous quarter. The rate remains at its lowest since 1975, but a squeeze on incomes continues, according to the ONS. Real earnings shrank by 0.4% in the three months to July – the fourth month running that pay has been outpaced by inflation. Between May and July of this year there were over 32 million people in work, up over 350,000 on last year. Employment minister Damian Hinds welcomed the labour market statistics, saying ‘the strength of the economy is helping people of all ages find work, from someone starting their first job after leaving education, to those who might be starting a new career later in life.’

Low interest rates hurting workers, says Morgan

Nicky Morgan, chair of the treasury select committee, has told the Resolution Foundation that the committee is to launch an inquiry into the costs and benefits of nearly ten years of rock-bottom interest rates. The former education secretary said there is “clearly a sense” that “perpetually low interest rates” are not working for many people with jobs.


Chancellor Philip Hammond set out plans for the UK financial sector post Brexit in a speech at Mansion House last night in bid to calm concerns of a cliff edge scenario. His vision of a transitional period post April 2019 where the UK and the EU 27 retains access to each other’s markets comes in a week where the French Economy Minister claimed Paris could claim London’s title as the European financial centre in the years following Brexit.

Bank of England

The BOE will probably vote 7-2 in favor of keeping policy on hold today, even as inflation speeds up, because of sluggish wage growth and a lack of evidence the economy is rebalancing. A renewed warning that rates may rise faster than markets expect could be as hawkish as it gets. If rates hold Sterling should wobble.

DUP rebel

The Democratic Unionist Party has announced it will be voting against the government for the first time since it signed up to a ‘confidence and supply’ deal with the Conservatives. The Northern Irish party’s 10 MPs will vote with Labour in favour of a fair pay rise for NHS staff and against a rise in tuition fees in a motion tabled by Jeremy Corbyn’s party. Arlene Foster and her party signed up to the agreement after the Tories embarrassingly lost their majority in a snap election in June, securing a pledge from the government to hand over £1bn in funding for NI.

SME’s avoid Bank debt

The latest SME Finance Monitor from BDRC suggests that demand for finance among SMEs is so weak that they are willing to turn down growth opportunities rather than take on bank debt. The study found that in the year to June only 4% of SMEs had applied for a new or renewed loan or overdraft facility, down from 11% in 2012. Four in every five companies said that they would accept a slower rate of growth rather than borrowing to grow faster, while one in five said that they would turn away an opportunity because of a fear of being in debt. Shiona Davies, director at BDRC, said signs in the first half of last year showed that the smallest businesses were “less willing to borrow to grow”.

‘Google tax’ take swells to £281m as levy starts to bite

HMRC figures reveal Britain’s take from the “diverted profits tax” rose nine-fold to £281m in 2016-17, after 14 companies were hit by levy.

Brussels backs new tax on tech company profits

European Commission president Jean-Claude Juncker has backed plans for a tax crackdown on internet giants such as Facebook and Google. Proposals by France – supported by Germany, Italy and Spain – mean European countries will remain in charge of collecting a tax on online revenues but will also be backed by the threat of continent-wide sanctions. Mr Juncker also urged governments to give up their veto over EU tax matters so a “fair tax for the digital industry” can be pushed through even faster.

Internet giants accused of aiding VAT fraud

MPs have accused Amazon and eBay of profiting from VAT evasion at the expense of taxpayers and UK businesses. Members of the public accounts committee told executives from the firms they were “turning a blind eye” as organised criminals in the UK and China handle undervalued or misclassified goods for the British market. Overall, HMRC estimates that online VAT fraud costs the taxpayer between £1bn and £1.5bn a year on sales of £7.5bn.

Gig economy workers reminded of tax deadline

The Low Incomes Tax Reform Group is advising self-employed people who started trading in the 2016/17 tax year – particularly those working in the gig economy – that they have just weeks left to register for self-assessment to meet the 5 October deadline.

OECD countries in bout of corporate tax competition

The OECD says eight countries reduced their corporate tax rates in 2017, with cuts averaging 2.7 percentage points.

Eye-watering tax could kill off pubs

The Campaign for Real Ale (Camra) has launched a campaign calling for an annual £5,000 reduction in business rates for every pub across England.

Landlords expected to quit

The Rics’ housing market survey for August shows a majority of surveyors (61%) expect more landlords to step away from the market, with changes to stamp duty and mortgage interest tax relief likely to deter investors.


Singapore named a former speaker of parliament as the city-state’s first woman president on Wednesday while critics expressed dismay that other candidates were disqualified and the election went uncontested. Aiming to strengthen a sense of inclusivity, Singapore had decreed the presidency, a largely ceremonial six-year post, would be reserved for candidates from the minority Malay community this time. Of the four other applicants, two were not Malays and two were not qualified to contest, the elections department said on Monday. Halimah Yacob had automatically qualified because she held a senior public post for over three years.

North Korea

North Korea showed defiance on Wednesday over new UN sanctions imposed after its sixth nuclear test, vowing to redouble efforts to fight off what it said was the threat of a US invasion. The North’s Foreign Ministry said the resolutions were an infringement on its legitimate right to self-defence and aimed at “completely suffocating its state and people through full-scale economic blockade”. “The DPRK will redouble the efforts to increase its strength to safeguard the country’s sovereignty and right to existence and to preserve peace and security of the region by establishing the practical equilibrium with the US,” it said in a statement carried by the official KCNA news agency. Then this morning the news agency threatened Japan. “Japan is no longer needed to exist near us,” the state-run Korean Central News Agency said on Thursday, citing a statement by the Korea Asia-Pacific Peace Committee. “The four islands of the archipelago should be sunken into the sea by the nuclear bomb of Juche,” it said, a reference to the regime’s ideology of self-reliance.

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