Business news 15 January 2024

Red Sea crisis could hit economic recovery. Recession risk, Business confidence, austerity, inflation, insolvencies, housing & more business news that we thought would interest our members.

James Salmon, Operations Director.

Red Sea crisis could hit economic recovery

Economists have warned that conflict in the Red Sea and escalating tensions across the Middle East pose a risk to the global economy. Flagging the possible impact of the Middle East crisis alongside the war in Ukraine, a World Bank reports warns: “Conflict escalation could lead to surging energy prices, with broader implications for global activity and inflation.” On recent attacks on commercial vessels transiting the Red Sea, John Llewellyn, former chief economist of the Organisation for Economic Co-operation and Development, reflected: “This has escalated to become a serious problem.” He added that the probability of serious disruptions to world trade now stands at 30%, up from 10% a week ago. Liam Byrne, chair of the Commons Business and Trade Select Committee, commented: “There’s now a real risk that a Red Sea battle will push up prices, just as inflation was beginning to fall.”

Economists warn of recession risk despite November growth

Office for National Statistics (ONS) data shows that the economy returned to growth in November, expanding by 0.3% following a 0.3% decline in October. The increase was driven by the services sector, which rose by 0.4% during the month. November’s growth exceeded forecasts, with economists having predicted growth of 0.2%. Meanwhile, revised estimates from the ONS show that the economy shrank between July and September. The decline in Q3 means that a technical recession – two consecutive quarters of decline – will only be avoided if December delivers growth, lifting Q4’s overall reading. ONS chief economist Grant Fitzner said that while GDP “bounced back” in November, “the longer-term picture remains one of an economy that has shown little growth over the last year.” Chancellor Jeremy Hunt welcomed the ONS figures and insisted that the country was in “a strong position for growth into the future.” Yael Selfin, chief economist at KPMG, said the overall outlook remained “gloomy,” adding: “Even if the economy manages to avoid a recession, it is expected to remain in stagnation territory.”

Austerity cost 2% GDP

According to Bank of England research published lat week, George Osborne’s austerity program after the Conservative party came to power in 2010 cost the UK economy more than 2% in lost GDP. BOE analysis from 2015 shows the tight public spending plans and tax increases imposed by the then Chancellor of the Exchequer to fix the public finances after the 2008 financial crisis pulled down the level of GDP by “a little over 2%” by 2015. Had he been able to complete his goal of balancing the books, the costs would have risen to 3% of GDP by 2017, about the same as the 3.25% estimated cost in GDP growth the the BOE puts on Brexit.

Inflation could fall to 1.7% in April, says Capital Economics

Britain could see inflation slow to below 2% before the United States and the eurozone, according to analysis by Capital Economics. The consultancy said that while inflation in Britain could fall to 1.7% in April, it is likely to be 2% in the eurozone and 2.6% in the US at that point. Paul Dales, chief UK economist at Capital Economics, said: “If we’re right, then in April, inflation in the UK will be lower than in the US and the eurozone for the first time in two years.”

Fewer business leaders are expecting a recession

Britain’s business leaders are feeling more optimistic as they head into 2024, with a poll by JPMorgan finding that fewer decision-makers expect the UK to fall into recession. Most of the 279 respondents expect revenue, profit and capital expenditure to climb this year, with 78% predicting that revenue will improve. On the need for credit, 38% say levels will remain on a par with 2023, 58% expect an increase and only 5% expect their credit needs to decrease. While 42% of leaders are preparing for a possible recession or believe the economy is in one, this marks a decline from the 69% who last year predicted there would be a recession in 2023. JPMorgan found that 43% of corporate leaders were upbeat about the UK economy, with this slightly down on the 44% who said the same in last year’s poll and 58% recorded in 2022. Catherine Pierre, head of UK commercial banking at JPMorgan, said. “As we head into 2024, despite a possible recession, business leaders are gearing up to react accordingly, while also forging ahead with plans for thoughtful growth.” On the key challenges they face, 40% of bosses flagged rising interest rates and 38% pointed to uncertain economic conditions.

Bosses remain optimistic about 2024

Analysis from BDO shows that while unemployment is expected to grow and job vacancies are predicted to fall over the next year, bosses remain more optimistic about 2024 than last year. BDO’s employment index, which tracks hiring intentions, fell for the six consecutive month in December to 99.12 points. However, the index measuring output rose by 0.9 points, marking the second month in a row of improvement. Meanwhile the optimism index ticked up 0.1 point to 98.44. BDO’s Kaley Crossthwaite welcomed the upturn in optimism and output, but argued: “It is critical that businesses see renewed support from the Government to enhance their productivity, increase recruitment and bolster skills.”

SME confidence climbs

Small businesses are increasingly confident over an economic recovery and the positive impact this will have on their finances. A poll by small business lender Iwoca shows that almost half of small businesses expect their revenues to expand this year, marking a steep increase on the 26% who said the same at the start of 2023. Christoph Rieche, chief executive at Iwoca, said: “After a tough year of high inflation for small businesses, it is fantastic to see optimism about growth return.” He added: “Now that the economic environment is beginning to stabilise, SMEs can see the light at the end of the tunnel and increase their ambitions in 2024.” Iwoca noted that concerns remain about the long-term outlook, with 43% of business leaders feeling pessimistic about the UK’s economic future. It was also shown that 64% say the UK is losing its lead compared to other economies.

AI could hit 40% of jobs

Artificial intelligence (AI) could affect 40% of jobs around the world, according to the IMF. The International Monetery fund said that in wealthy nations the share could be as high as 60%, with AI completely replacing humans in about 30% of jobs. The report also warned of a “digital divide” where poor countries struggle to reap the benefits of the technology.

Energy providers force more businesses into insolvency

Energy providers forced twice as many businesses into insolvency last year than they did in 2022, according to research by Mazars. The number of winding-up petitions filed by the UK’s top 10 energy providers increased by 139% to 86. Businesses, unlike households, are not protected by an energy price cap, leading to many falling into arrears due to high bills. Mazars partner Michael Pallott said: “Energy costs have been a real killer for some businesses. The number that are in significant arrears with their energy suppliers is now pretty substantial.” He predicts that the number of firms closing due to energy debts will rise due to higher interest rates and a weak economic environment.

4 in 10 councils at risk of going bust in the next five years

Four in 10 local authorities in England are at risk of going bust over the next five years, according to analysis by Grant Thornton. Since 2021, six councils have issued section 114 notices, meaning they have declared themselves effectively bankrupt. The analysis shows that while last year, one in six councils in England had cash reserves at 5% or less than their total revenue expenditure, this year the rate is one in five. Grant Thornton said this will hit 25% in 2025 and climb to 40% over the next five years. Philip Woolley of Grant Thornton said: “The first tranche of failures were less well managed councils. Now, it is the well-managed ones that are really under pressure as well. The funding model is broken.”

Post Office may face £100m tax bill over Horizon payouts

Dan Neidle of Tax Policy Associates says the Post Office paid less tax by deducting payments to victims of the Horizon scandal from its profits, a move experts say could be in breach of tax laws. Mr Neidle estimates that deducting postmaster compensation from its trading profit would mean that the Post Office underpaid more than £100m in corporation tax. Heather Self of Blick Rothenberg says payments of compensation by the Post Office are almost certainly not deductible for corporation tax purposes. “Not only is it difficult to argue that they were incurred for trading purposes, there is also a general rule of public policy that fines – or payments in the nature of fines – are not deductible,” she added. While the Post Office appears to have deducted compensation provisions from their taxable profits, it did not do so when it came to calculating executive pay. Mr Neidle said: “Bonuses have been paid to the executive team based on an apparent level of profitability which does not exist.”

Hospitality hit by soaring bills

Experts have warned that bars, restaurants and pubs are being driven out of business by the soaring cost of energy, rent, and produce, as well as staff shortages. Analysis from consultancy group CGA shows that the number of licensed premises in Britain fell by 3.6% from 103,682 to 99,916 in the year to September. Martin McTague, national chair at the Federation of Small Businesses (FSB), said: “Increasing rents and input costs, coupled with inflation, high energy prices and low consumer demand have been chipping away at the hospitality industry.” He added that more than half of small businesses in the sector are experiencing falling revenues, “as well as rock bottom confidence levels.” FSB research shows that 56% of small hospitality businesses have seen their running costs increase by more than 10% in the last year.

Listed firms will build fewer homes this year

The number of new homes completed by stock-market listed housebuilders is set to fall below 70,000 this year. Forecasts from Peel Hunt suggest that, between them, the property companies listed on the London Stock Exchange will build around 69,300 homes in 2024. This is slightly less than the 71,000 it estimates were finished in 2023 and significantly lower than the 85,000 completed in 2022. The dip poses a risk to the Government’s goal to build 300,000 homes a year by the mid-2020s. In recent years, the average – which includes all housebuilders, not just those listed on the LSE – has been around 235,000. The ten listed housebuilders in Peel Hunt’s analysis were Barratt Developments, Persimmon, Berkeley, Crest Nicholson, Bellway, MJ Gleeson, Redrow, Springfield, Vistry and Taylor Wimpey.

Experts upgrade property price outlook

House prices are set to increase this year, according to forecasts from Knight Frank. In October, the property consultancy predicted that average property values in the UK would be 4% lower by the end of 2024. However, a faster-than-expected fall in inflation has seen analysts reconsider this and say house prices will instead increase by 3% in the next 12 months. Tom Bill, head of UK residential research at Knight Frank, said: “As the news has got better coming into the new year, and as lenders continue to drop rates on their mortgage products, that will feed through into the market.”

London jobs market stalls

The job market in London has stalled, according to research conducted by KPMG and the Recruitment and Employment Confederation (REC). The number of vacancies in London fell for the tenth month in a row, while the number of permanent placements fell in the four months to December. Muniya Barua, deputy chief executive of BusinessLDN, said that the slowdown in London’s jobs market is “sending a clear message to the Chancellor,” arguing that Jeremy Hunt “needs to deliver a bold pro-growth package in the March Budget.” REC chief executive Neil Carberry has called for a Budget that “includes a proper plan for workforce capacity, embraces better welfare-to-work support and reforms the Apprenticeship Levy,” warning that ”any return to growth in 2024 will put strain on a labour market with embedded shortages.”

Government and banks in talks over fraud plan

The Home Office has been in discussions with major banks including Barclays, Lloyds and Santander, as well as industry lobbying group UK Finance, about a Government information campaign designed to tackle online fraud. The initiative, which will include television advertisements, is believed to have a multimillion-pound budget. City sources say Home Office officials have asked a number of banks to sign non-disclosure agreements over the campaign. However, some banking executives fear the initiative would be a waste of public money, given the prominence of the industry-funded Take Five to Stop Fraud campaign. Despite these concerns, a UK Finance spokesperson said it sees the “long-established and effective consumer awareness campaign … as complementary to the Home Office’s forthcoming campaign.”

Over-55s have start-up plans

A survey of 1,000 people over the age of 55 by Virgin StartUp saw a third say they like the idea of starting a business, with almost a quarter of those seeking to do so in 2024. Two fifths said that they were attracted to “being their own boss.”

GSK to invest £200m in Britain

Pharmaceutical group GSK will invest more than £200m into the UK in the next two years. The FTSE 100 firm will look to improve its UK sites, including constructing new facilities and assembly lines.

Tories could deliver two tax-cutting Budgets before the election

The Mail’s Glen Owen says it is possible that Rishi Sunak could deliver two tax-cutting Budgets before voters go to the polls, saying that if the Prime Minister holds off the general election until later in the year, the Chancellor could hold a Budget in the autumn in addition to the one already due to take place in March. Asked whether he could “fit in” two tax cutting Budgets in 2024, Mr Sunak said: “Without commenting specifically on Budgets, what I can say is I want to cut people’s taxes, I want to control spending and welfare and cut people’s taxes, and I believe we’re making progress.” On his intentions in regard to taxation, the Prime Minister said: “I’ve been very clear that when we can responsibly cut more taxes, we will. That is the direction of travel.”

Half of young managers demand salary boost before returning to office

Half of young managers are demanding a salary boost before returning to the office full-time, according to research from the Chartered Management Institute (CMI). The research suggests that more than half of managers of all ages were working from home between one and four days a week. Of those under 35, 49% expected a salary rise to work in person five days a week. Anthony Painter, the CMI’s director of policy, said: “A lot of this flexibility is driven by family responsibilities and the under- 35s – that’s the cohort most likely to have young kids and therefore need to work more flexibly. Staff still have an ability to negotiate.” The study also found that leaders under 35 are the most likely to push for subsidised travel and free lunches.

Latest Insolvencies

Petitions to wind up (Companies) – ML LOGISTICS LTD
Petitions to wind up (Companies) – RWAN CONSTRUCTION LIMITED
Appointment of Liquidators – TIMBER DISPLAYS LTD
Appointment of Liquidators – CARANSTAR PROPERTIES LIMITED
Appointment of Liquidators – CREF3 UKI PW L LTD
Appointment of Liquidators – PDH LIMITED
Appointment of Liquidators – DOODLE HEALTH LTD
Appointment of Liquidators – MORSE GROUP LTD
Appointment of Administrator – CLARITY HOMES & COMMERCIAL LIMITED
Appointment of Liquidators – VSF CAPITAL LIMITED
Appointment of Liquidators – ANTROBUS NETWORK LIMITED
Appointment of Liquidators – KAC REX LIMITED
Appointment of Liquidators – SPEAKEASY MEDIA LIMITED
Appointment of Administrator – ACG CONTRACTS LIMITED
Petitions to wind up (Companies) – R-MAC ROOFING & BUILDING LTD.
Winding up Order (Companies) – NÜBER FOOD LIMITED
Petitions to wind up (Companies) – FRAME BROTHERS LTD
Appointment of Liquidators – BALLEE PROPERTIES LIMITED
Appointment of Liquidators – RAVENHILL BUSINESS PARK LIMITED
Petitions to wind up (Companies) – TWO JAYS TRADING LTD
Petitions to wind up (Companies) – TEESPRING UK LIMITED
Petitions to wind up (Companies) – SUNRISE PUBLISHING LTD
Petitions to wind up (Companies) – ASHBROOK TRADERS LTD
Petitions to wind up (Companies) – BILLINGE PROPERTY GROUP LTD
Petitions to wind up (Companies) – BIRD BOX BONDS PLC
Petitions to wind up (Companies) – DECOR STYLE LIMITED
Petitions to wind up (Companies) – POWER-AID LTD
Petitions to wind up (Companies) – AUXERRE FASHION LTD
Petitions to wind up (Companies) – BERKSHIRE ASSETS (WOKINGHAM) LIMITED
Petitions to wind up (Companies) – AUXERRE LIMITED
Petitions to wind up (Companies) – DOMINION OFFICE SUPPLIES LTD
Appointment of Liquidators – CAUSALITY SOLUTIONS LTD
Appointment of Liquidators – NIKS CONSULTING LIMITED
Petitions to wind up (Companies) – EMPIRE MOTORS BOLTON LIMITED
Appointment of Liquidators – TRAVEL 2 LIMITED
Appointment of Liquidators – CHARTEREX LIMITED
Petitions to wind up (Companies) – ANDALUS CARGO LIMITED
Petitions to wind up (Companies) – WINEAPP LTD
Petitions to wind up (Companies) – IDSE LTD
Petitions to wind up (Companies) – VPS LEGAL SERVICES LTD
Petitions to wind up (Companies) – HP139 LTD
Petitions to wind up (Companies) – THE GLENDOWER GROUP LIMITED
Petitions to wind up (Companies) – ORTHIOS OPERATIONS LIMITED
Petitions to wind up (Companies) – COLLINSON TILES LIMITED
Petitions to wind up (Companies) – SS SECURE SERVICES LIMITED
Petitions to wind up (Companies) – BLUCON GROUP LIMITED
Petitions to wind up (Companies) – SAVE ENERGY WORLD LTD
Appointment of Liquidators – S2R CONSULTING LTD
Appointment of Liquidators – PLUTO FINANCE ASSETCO LTD
Appointment of Liquidators – KSENIA KOLCHINA CONSULTING LTD

Petitions to wind up (Companies) – RED OPTICAL LTD.

Appointment of Liquidators – SYLVIA SUGARMAN LIMITED
Appointment of Liquidators – C F WALSHAW LTD
Appointment of Liquidators – GOLDSAND HOTELS LIMITED
Appointment of Liquidators – CDNL HOLDING COMPANY LIMITED
Appointment of Liquidators – CAR RENTALS LIMITED
Appointment of Administrator – COLUS LTD
Petitions to wind up (Companies) – GRIMSBY FREEZING SERVICES LIMITED
Appointment of Liquidators – IOJ CONSULTING LTD
Petitions to wind up (Companies) – ABC INNS GROUP LTD
Appointment of Liquidators – MKL COMMERCIAL LETTINGS LTD
Appointment of Liquidators – PH ENGINEERING LIMITED
Appointment of Liquidators – OPTIMITI LIMITED
Appointment of Liquidators – DEC2024 LIMITED
Appointment of Liquidators – CYBERAID H.R. LIMITED
Appointment of Liquidators – THE SHIRES COUNTRY PUBS LIMITED
Appointment of Administrator – KENHAM BUILDING LIMITED
Appointment of Liquidators – CRANBROOK DAY NURSERIES LIMITED
Appointment of Liquidators – THE RUGGLESTONE INN LIMITED


Why should you become a CPA member!

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for some time to come.

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.

Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!

Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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 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 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.