Business news 15 January 2025

Stagflation, Reeves to act, inflation expectations, Small businesses focus locally, retail, housebuilding, power plants, pensions, markets, insolvencies & more business news that we thought would interest our members.

James Salmon, Operations Director.

Inflation

Inflation (CPI) reported at 2.5% for December. Below estimates of 2.6%.

UK Inflation fell to a lower-than-expected 2.5% in December, with core price growth slowing further, according to data released by the Office for National Statistics this morning. The consumer price index (CPI) rose to 2.6% in November, with economists polled by Reuters expecting the December reading to stay unchanged. Core inflation, which excludes more volatile food and energy prices, came in at 3.2% in the twelve months to December, down from 3.5% in November.

Accountants flag stagflation concerns

The UK economy is facing increasing risks of stagflation, according to analysis by the ICAEW. The business confidence index fell by 14.2 points to 0.2, marking the lowest level since late 2022. This decline is largely attributed to tax increases, with 41% of accountants surveyed citing the tax burden as a significant concern, up from 29% previously. This marks the first time that tax has been identified as the biggest concern in the ICAEW survey since it was launched in 2004. Despite expectations of 0.2% growth in November, overall growth for Q4 2024 is anticipated to stagnate. Suren Thiru, economics director at ICAEW, said: “The economy is in a challenging period, with stagflation a live risk.” He added: “There is little in our key forward-looking indicators.. to suggest that a meaningful improvement is likely any time soon.”

Reeves vows action on improving growth

Chancellor Rachel Reeves has pledged to go “further and faster” to improve economic growth, saying she is “under no illusion” about the scale of the challenge. This comes after government borrowing costs surged, with the yield on 30-year government bonds nearing a high not seen since 1998. Addressing the Commons, Ms Reeves said: “The economic headwinds that we face are a reminder that we should, indeed we must, go further and faster in our plan to kick-start economic growth that plunged under the last government.” It is understood that the Chancellor is planning to bring forward announcements from Labour’s promised industrial strategy. While she insisted that Labour is committed to its fiscal rules, Ms Reeves refused to rule out future spending cuts, saying she would not write “five years of Budgets in the first six months” in government.

Analysts expect steady inflation

UK inflation is set to have been steady in December, holding at the 2.5% recorded in November, according to a consensus of analysts compiled by Pantheon Macroeconomics. Rob Wood and Elliott Jordan-Doak, economists at Pantheon Macroeconomics, believe that inflation staying at 2.6% will only be “a temporary reprieve” for the economy. They expect price pressures to increase in the coming months, with Consumer Prices Index inflation forecast to reach 3.2% in April. Meanwhile, Deutsche Bank believes inflation will climb to 2.7% in December. Sanjay Raja, a senior economist at the bank, warns that “price momentum will only pick up from here,” with increases to employer National Insurance contributions and the National Living Wage set to push inflation higher.

Small businesses focus on local growth

New research indicates that the UK’s smallest businesses, particularly microbusinesses with fewer than 10 employees, are prioritising local growth over international expansion. A survey by Zempler Bank revealed that 27% of these businesses prefer regional development, while only 12% said their main goal was to expand internationally. While 54% of businesses expect modest growth, 24% have no ambition to grow. It is noted that while some small businesses could be hit by increases to statutory sick pay and parental pay, most will be shielded from changes to National Insurance contributions. Zempler Bank chief executive Rich Wagner said: “While sole traders and some microbusinesses are shielded from some of the upcoming tax changes, these changes will still hit smaller businesses hardest.” He added that smaller businesses “often don’t have the ability to absorb these additional costs or pass them on to customers in the way that larger firms can.”

Tax raid puts retail jobs at risk

A tax raid set out by Chancellor Rachel Reeves in October’s Budget has raised concerns over job losses in the retail sector, with the British Retail Consortium (BRC) reporting that “with the Budget adding over £7bn to their bills in 2025, retailers are now facing difficult decisions about future investment, employment and pricing.” The concerns stem from an increase in employer National Insurance rates, which are set to climb from 13.8% to 15%, and the reduction of the payment threshold from £9,100 to £5,000. Nearly half of retail leaders (46%) anticipate reducing their workforce, while 56% plan to cut hours and overtime. Additionally, 31% of retailers quizzed by the BRC are looking to invest in automation, replacing staff with self-service checkouts.

Housebuilding sector sees unexpected growth

The UK housebuilding sector received a boost as builders reported better-than-expected results for last year. Persimmon completed 10,664 homes in 2024, a 7% increase from the previous year, driven by an 18% rise in private home completions. The average selling price rose by 5% to approximately £268,500, reflecting “improving market conditions.” Cairn Homes also reported strong growth, with profits soaring nearly a third to about €150m. Meanwhile, MJ Gleeson said it expects results for the 2025 financial year to surpass the previous 12 months.

Power plant costs could double to £40bn

The anticipated cost of the Sizewell C nuclear power plant in Suffolk has surged to nearly £40bn, doubling since its initial proposal to ministers in 2020. The increase is attributed to rising construction costs and delays at EDF’s Hinkley Point C project. The UK Government and EDF plan to finance about 40% of Sizewell C, which aims to supply electricity for 6m homes, while seeking private investors for the remainder. The new financial model proposed for Sizewell differs from Hinkley Point’s, allowing EDF to recover costs earlier, raising concerns about potential financial burdens on consumers and taxpayers.

Markets

Yesterday, the FTSE 100 closed down 0.29%  at 8201.54 and the Euro Stoxx 50 closed up 0.53% at 4980.47. Overnight in the US the S&P 500 rose 0.11% to 5842.91 and the NASDAQ fell 0.23% to 19044.39.

This morning on currencies, the pound is currently worth $1.221 and €1.1855. On Commodities, Oil (Brent)  is at $80.13 & Gold is at $2686. On the stock markets, the FTSE 100 is currently up 0.81% at 8268.56 and the Eurostoxx 50 is up 0.73% at 5016.71.

The US releases its latest inflation data today,  and it is expected to show a fifth month of increases. An elevated reading will bolster the case for an extended pause in Federal Reserve interest-rate cuts.

Private equity urged to kickstart dealmaking

Private equity fund managers are facing increasing pressure from investors to initiate deals after a prolonged period of inactivity. Adam Wedgwood, head of financial sponsor coverage at investment bank Cavendish, suggests that as the market shows signs of improvement, “so too will market confidence and PE will have a higher risk tolerance.” Meanwhile, John Taylor, a private equity partner at Herbert Smith Freehills, says assets snapped up by private equity houses during a post-pandemic deals boom in sales are now reaching maturity and investors are keen to see a return. Dealmaking increased 36% by value in the first nine months of 2024, with EY saying this was driven by buyers and sellers getting closer on valuation expectations and bullish sentiment.

Few workers consider increasing pension contributions

Half (50%) of savers have never considered increasing their current workplace pension contributions, according to research for the Pensions and Lifetime Savings Association (PLSA). Almost three in ten people (28%) do not know the process to increase their pension contributions, with more men (55%) than women (39%) saying they understood how to change their contributions. Zoe Alexander, director policy and advocacy, PLSA, said: “This research underscores the gap between knowledge and action when it comes to pensions.”

Hays and hiring

Underlining how bad the hirngs market has been, Hays in a trading statement said net fees fell 15% on-year in the second quarter, and by 12% on a like for like basis. Net fees dropped by 17% for Germany, 14% for the UK & Ireland, 17% for Australia & New Zealand, and 12% for the Rest of World. They were down 10% on-year but “sequentially stable” for Temp & Contracting staff and 21% for Permanent. For the first half, Hays expects £25 million in pre-items operating profit compared with consensus of £27 million. Additionally, it warned that it is too soon to determine whether the Permanent staff net fee fall is due to deferrals or to a sustained slowdown.

Latest Insolvencies

Appointment of Administrator – GEO. ADAMS & SONS (RETAIL) LIMITED
Appointment of Liquidators – ANDERSON PORTER LTD
Appointment of Administrator – LOTTIE LONDON LIMITED
Appointment of Liquidators – CKP2 CONSULTING LIMITED
Appointment of Liquidators – KENCH & COMPANY (READING) LIMITED
Appointment of Administrator – BRAND AGENCY (LONDON) LIMITED
Appointment of Liquidators – SHROOTHAN SOLUTIONS LIMITED
Appointment of Administrator – ULTIMATE CREATIVE COMMUNICATIONS LIMITED
Appointment of Liquidators – CATERPILLAR TUNNELLING EUROPE LIMITED
Appointment of Liquidators – SERVICES SUPPORT (BTP) LIMITED
Appointment of Liquidators – NTJH LIMITED
Appointment of Liquidators – THE FUNDING CORPORATION (BENTON) LIMITED
Appointment of Administrator – WERRENS BEDFORD LTD
Appointment of Liquidators – AMO CONSULTING & SERVICES LIMITED
Appointment of Administrator – CELSUS GROUP LIMITED
Appointment of Liquidators – B G L ESTATES LIMITED
Appointment of Liquidators – SERVICES SUPPORT (BTP) HOLDINGS LIMITED
Appointment of Liquidators – JELLYWIGGLE LIMITED
Petitions to wind up (Companies) – LOGISTICS & FACILITY SOLUTIONS LIMITED
Petitions to wind up (Companies) – FREE TO LEARN GROUP LTD
Petitions to wind up (Companies) – NAGNI LTD
Appointment of Liquidators – SPIERS@CLIPSHAM LIMITED
Petitions to wind up (Companies) – SELECT ASSET MANAGEMENT LIMITED
Appointment of Liquidators – BROMSGROVE ACCIDENT REPAIR CENTRE LIMITED
Appointment of Liquidators – ON – SITE RESEARCH LIMITED
Petitions to wind up (Companies) – WHITE ROSE TRAINING LIMITED
Appointment of Liquidators – COTTLEYS HOLDINGS LIMITED
Appointment of Liquidators – ASSESSMENT, RESEARCH & EVALUATION ASSOCIATES LTD
Petitions to wind up (Companies) – WOODTRACK LIMITED
Winding up Order (Companies) – LACE LTD

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:

  1. 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.
  2. Our monitoring service will alert you to any significant changes in the status of those customers.
  3. 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.