Business News 15th August 2017
CPA hopes to inform, with its daily bite-size business news on Tuesday 15th August 2017, filled with stories we think will interest our members and visitors.
Markets Round up
The FTSE 100 staged a mini recovery yesterday of 0.6% to 7354, with sentiment improved after a rally in Asian equities sunday night/monday morning. Investors took heart from a perceived calming of the Korean pennisula a reduced risk of military action. The FTSE 250 climbed 0.9% to 19,703. European stocks bounced even harder with a 1.3% rise in the Euro stoxx 50 to 3451 and a 1.1% rise in the Euro stoxx 600 to 376.
US stocks climbed over 1% too as Trump went on holiday and the Korean crisis abated.
Sterling continued to weaken against it’s peers falling to 1.10 against the Euro and 1.297 against the dollar.
Oil sold off with Brent falling to $50.97 and WTI falling to $47.82.
The fall in risk hit gold too with it falling to $1283.75
US-China
Donald Trump is widely expected to order the launch of an investigation into alleged intellectual property theft, tasking US trade representative Robert Lighthizer with the job of overseeing the probe. The move from Washington could lead to tariffs being imposed on Chinese exports to the US, something Trump had promised during his election campaign. China-US relations would be put under strain if the administration followed through with the investigation.
Eurozone
The Eurozone’s industrial production declined for the first time in four months in June, Eurostat reported. Industrial production decreased 0.6% month-on-month in June, reversing a revised 1.2% rise in May. This was the first decrease since February, when output slid 0.2%. Economists had forecast output to fall 0.5% in June. The monthly fall was largely driven by a 1.9% decrease in capital goods and 1.2% fall in durable consumer goods. Output of intermediate goods and non-durable consumer goods fell 0.3% and 0.4%, respectively.
Pay rise?
Pressure on incomes looks set to continue, with pay rises forecast at 1% over the next year, a survey predicts. Despite falling unemployment, wage growth is weak because the supply of labour has also gone up, says the Chartered Institute of Personnel and Development (CIPD). The CIPD said for every low-skilled job, there were 24 applicants. There were also 19 candidates for every medium-skilled job and eight for every high-skilled vacancy.
INDUSTRY
Business leaders put trust in accountants
The majority of business leaders rely on accountants to make finance decisions, according to a survey by MarketInvoice. Some 56% of the business leaders surveyed said that accountants were their most important external advisers when considering business finance options. They are twice as important to businesses as commercial finance brokers (23%), while only 6% said they would consider speaking to a bank directly. The survey also indicates that businesses are likely to be making more calls on their financial advisers in the near future, with 38% of business leaders expecting a cash squeeze in the next six months. Darvish Heshejin, head of partnerships at MarketInvoice, said: “Accountants and commercial finance brokers are increasingly becoming the default go-to for companies seeking advice on business finance, especially where funding is required quickly.”
London Loves Business Computer Weekly
EU citizens rush to find City jobs
Figures from Morgan McKinley show the number of people looking for a job in the City rose last month, as EU citizens rushed to find employment in the UK ahead of Brexit. There was a 12% month-on-month increase in those seeking jobs in London’s financial industry in July, compared with a 14% drop during the same period last year.
SMEs
Tech start-ups losing access to investment funding
British start-up technology companies are being denied access to the European Investment Fund (EIF), as European institutions begin to cut the UK out of future projects. Since March, several venture capital funds say they have been told that the EIF has now effectively turned off the tap to new British commitments. Before the vote to leave the EU last year the fund indirectly invested more than half a billion pounds a year in Britain’s technology sector, its largest single source of money. The British Venture Capital Association is urging the government to ensure that the British Business Bank can step in to replace the lost funding.
VAT changes to hurt small traders
Small traders are receiving 20% VAT charges on fees paid to eBay when they sell on the platform following a restructuring measure introduced at the beginning of August. The move follows the provision of powers to HMRC to force online marketplaces to ensure that their overseas customers were registered and accounting for VAT and the changes are expected to secure an additional £875m of VAT revenue for HMRC by 2021, according to Blick Rothenberg.
Manchester beats London for new businesses
More new businesses are being created in Manchester than London, according to research by UHY Hacker Young. The firm found that Manchester creates 79 new businesses per 10,000 population, compared to 64 new businesses per 10,000 population in London. Both cities exceed the UK average, which stands at 50 new businesses per 10,000 population.
Manchester Evening News
TAX
Toynbee: Rees-Mogg wrong on tax
The Guardian’s Polly Toynbee is critical of proposals by Jacob Rees-Mogg to cut stamp duty and income tax, disputing the Conservative MP’s claim that cutting taxes brings in more revenue.
The Guardian, Page: 27
PROPERTY
Stamp duty ‘leading to longer commutes’
The Adam Smith Institute has calculated that stamp duty is costing the economy an extra £9.28bn by stopping people from living where they want and forcing them to commute for longer. Ben Southwood, an economist at the Institute, said there was an “economic cost” to people living “in areas they don’t necessarily want to live.”
Many buy-to-let investors planning to sell up
One in five buy-to-let investors plan to sell their properties, according to the Residential Landlord Association, which said almost half plan to increase rents over the next year. While the weaker property market is a factor, analysts say recent tax changes are having the biggest impact.
FIRMS
Appointments
David Busfield, a former HSBC senior commercial banking manager, has been appointed by Crowther Accountants as its new business development manager.
Yorkshire Post, Business, Page: 3
INTERNATIONAL
Switzerland accused of spying on German tax authority
German prosecutors are investigating three members of Switzerland’s intelligence agency on suspicion that they are spying on the German tax authority. The three have been accused of trying to identify German tax investigators working on a crackdown targeting Swiss banks.
The Independent, Page: 20
Billionaire held in money laundering inquiry
Israeli billionaire Beny Steinmetz has been detained on suspicion of money laundering. Police said that Mr Steinmetz was one of five people being held for allegedly drawing up false contracts and property deals to launder money.
The Times Financial Times, Page: 7 The Daily Telegraph, Business, Page: 29-30
ECONOMY
Pay growth to stay weak
Pressure on incomes looks set to continue, with pay rises forecast at 1% over the next year, a survey predicts. Despite falling unemployment, wage growth is weak because the supply of labour has also gone up, says the Chartered Institute of Personnel and Development (CIPD). The CIPD said for every low-skilled job, there were 24 applicants. There were also 19 candidates for every medium-skilled job and eight for every high-skilled vacancy.
BBC News The Independent, Page: 47
Finance sector set for slowdown
The UK’s financial services sector is poised for a slowdown, with economic uncertainty expected to hit mortgage and business lending. The stock of mortgage lending is set to ease back to £1,184bn next year, down from £1,192bn in 2017, according to the EY Item Club. Separately, analysis from the Share Centre has revealed earnings amongst companies in the FTSE 350 soared to £22.7bn between April and June, a rise of 41.3% on the same period last year.
Manchester Evening News, Page: 31 The Sun, Page: 43
OTHER
Transfer fees keep rising
Football transfer fees of more than £100m will soon become commonplace, according to analysis by PwC. The firm’s research – which does not take into account Neymar’s £200m move from Barcelona to PSG – tracked every transfer involving the top-20 ranked Uefa teams from 2001 to the current window. It forecast the average fee for the biggest 20 transfers each season would reach £65m by 2024-25.
The Daily Telegraph, Sport, Page: 2-3
Tax dodgers make for gripping viewing
The Guardian’s Julia Raeside praises Catching the Tax Dodgers, which aired last night on Channel 4, as “a fascinating piece of television, full of unexpected wonder.”
The Guardian, Page: 17