Business news 16 January 2024
AI warning from Davos. UK business leaders more optimistic about 2024 than last year. Post office miscarriage of justice & more business news that we thought would interest our members.
James Salmon, Operations Director.
AI warning as world leaders gather in Davos
The International Monetary Fund warned as Davos got underway that artificial intelligence would affect about 60% of jobs in advanced economies, with negative impacts such as lower salaries or work disappearing altogether expected for about half of them. Kristalina Georgieva, its managing director, said: “We are on the brink of a technological revolution that could jump-start productivity, boost global growth and raise incomes around the world. Yet it could also replace jobs and deepen inequality.” Separately, the Basel Committee on Banking Supervision warned that AI could pose a risk to financial stability. “Financial stability is only one dimension, there are many other potentially more important consequences related to AI. Issues that if not properly managed could change the course of history, not necessarily for the good,” chair Pablo Hernandez de Cos said.
Unemployment
UK Unemployment was steady in the three months to November, figures from the Office for National Statistics showed. The unemployment rate for the period from September to November was 4.2%, unchanged from the August to October period. The figure came in line with the market consensus. Also in the three months to September, annual growth in average total pay, excluding bonuses, was 6.6%. This in line with market consensus as well and slower than growth in the previous three-month period of 7.3%.
UK business leaders more optimistic about 2024 than last year
UK bosses are significantly more optimistic about the prospects for the UK economy in 2024 compared to last year, according to a survey by PwC. The survey showed that 39% of UK bosses expect the economy to improve in 2024, up from just 9% last year. This increased confidence is likely due to easing inflation, rising real incomes, and the expectation of interest rate cuts by the Bank of England. The survey also revealed that over half of the CEOs surveyed expect to make at least one major acquisition in the next three years, reflecting the improving confidence in the economy. The UK is also outpacing its global counterparts in AI adoption, with 42% of UK CEOs adopting generative AI in the past year. Despite concerns about job cuts, nearly half of UK bosses plan to expand their workforce in 2024. Globally, executives are increasingly worried about the long-term viability of their businesses, with pressures mounting from AI and climate disruption. Some 45% of CEOs do not believe their businesses will survive without significant changes in the next ten years. Overall, companies were more confident in the global growth picture, but less optimistic about revenue growth in the next year. Britain was the top country to invest in, according to the survey.
Confidence improves for small firms
Small businesses are confident in reaching profit targets this year, with 80% expecting to reach their goals and 91% predicting increased profitability in the next 12 months, according to a survey by accountant and business advisory Moore UK. Maureen Penfold, chair of Moore UK, said business owners are beginning to see the “light at the end of the interest rate tunnel.” That said, Penfold stresses that “businesses haven’t lost sight of the challenges they face.”
Accountant warned PO boss of miscarriage of justice
A forensic accountant investigating the disputed Horizon accounting system claims he warned Angela Van Den Bogerd, a senior manager overseeing matters relating to the system, that a postmaster’s prosecution could be a miscarriage of justice. Jo Hamilton had been charged with theft even though no evidence had been found. Hamilton pleaded guilty to false accounting in 2008 and was sentenced to a community order. She was acquitted over a decade later as the lead appellant in a Court of Appeal judgment in 2021. Ian Henderson, director of forensic accountancy firm Second Sight, said he told Van den Bogerd about Hamilton’s case in 2013. Meanwhile, James Hartley, the lawyer who battled on behalf of the 555 subpostmasters and first exposed the IT scandal, said the City law firms that acted for the Post Office – Cartwright King, Womble Bond Dickinson and Herbert Smith Freehills – should be punished for their role in the Horizon scandal.
Vodafone and Microsoft
Vodafone and Microsoft announced a new, 10-year strategic partnership offering scaled digital platforms to more than 300 million businesses, public sector organisations, and consumers across Europe and Africa. Through the partnership, the companies will use Microsoft’s generative AI, to scale Vodafone’s managed Internet of Things connectivity platform, develop new digital and financial services for businesses, particularly SMEs across Europe and Africa, and overhaul its global data centre cloud strategy. Vodafone will invest $1.5 billion over the next 10 years in cloud and customer-focused AI services developed in conjunction with Microsoft.
BT’s rural not spots
BT Group are in negotiations with Elon Musk’s Starlink to explore the possibility of offering satellite phone and broadband services in rural areas plagued by connectivity issues. This potential collaboration, first reported by The Telegraph, is set to address the so-called ‘rural not spots’, a persistent challenge to BT’s universal service obligations.
Experts call for VAT threshold change
The Government should consider raising the VAT threshold from £85,000 to £100,000 to remove the barrier to growth for businesses, according to a report by the Federation of Small Businesses. The current freeze on the threshold, which has been in place since 2017, means that more companies are being brought into the VAT system due to inflation. Tax Policy Associates estimates that around 26,000 businesses are stalling their growth to avoid crossing the threshold. Raising the threshold would increase productivity, capital, and employment in the economy. The report suggests allowing companies with sales between £100,000 and £120,000 to apply for a rebate on VAT passed to HMRC that reduces gradually as turnover grows. The present VAT freeze is expected to bring in an additional £1.4bn a year by 2027-28, but it also creates a distortion below the threshold. Tax Policy Associates founder Dan Neidle argues that a lower threshold should be considered to bring more traders into the system.
Hiring is at a decade-low
The number of people being hired has slumped to a new decade low and is expected to worsen amid shrinking job vacancies, according to a report by BDO. The report reveals that UK employment is at its weakest since August 2013, with the index dropping for a sixth consecutive month. While there were small upticks in optimism from business owners in the service sector, BDO predicts that UK GDP growth will remain stagnant due to higher borrowing costs and inflation.
PageGroup warns of hiring slowdown
Professional services recruiter PageGroup has issued a profit warning, becoming the third recruiter to warn of a hiring slowdown in a week. The company expects full-year profits to be below guidance, down about 40% from last year. CEO Nicholas Kirk attributes the decline to lower levels of candidate and client confidence. The warning follows similarly bleak results from Robert Walters and Hays. Neil Shah, director at Edison Group, notes that the global hiring market has slowed down considerably due to high interest rates and macroeconomic uncertainty.
Remote workers less likely to be promoted
Remote workers are often overlooked for promotions due to their lack of visibility, according to studies. Company bosses tend to promote staff who are physically present at work, as they are seen as more committed and better able to network. One analysis found that 5.6% of workers who were in the office at least part-time were promoted last year, compared to just 3.9% of those who worked entirely remotely. Another survey by KPMG of chief executives at big companies found that 87% of them favoured in-office workers. Remote workers also face challenges in terms of mentoring and feedback, as well as in-person meetings, which are more important at higher levels. However, studies by the National Bureau of Economic Research have shown that hybrid workers do not face career disadvantages compared to those who come into the office every day.
Whitehall inefficiencies mean billions wasted
Britain is wasting tens of billions of pounds on badly run projects, cold war-era IT systems, and crumbling infrastructure, according to the National Audit Office (NAO). The report suggests that the government can make savings in five major areas: big infrastructure, managing buildings and other assets, buying, IT systems, and reducing fraud and error.
Latest Insolvencies
Appointment of Liquidators – GLENWAY HOLDINGS LIMITED
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Petitions to wind up (Companies) – OXUS LTD
Appointment of Liquidators – OPTIMUS ALC LIMITED
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Appointment of Liquidators – L S CONSULTING (2018) LTD
Appointment of Administrator – STEWART MILNE HOMES (ARBROATH) LIMITED
Appointment of Liquidators – PHILLIPS & CO (LAND DEVELOPMENT) LIMITED
Appointment of Liquidators – SGI VENTURES LIMITED
Appointment of Liquidators – THAKKER IT SOLUTIONS LIMITED
Appointment of Administrator – TXM PLANT LIMITED
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Appointment of Administrator – BACCHUS NEWCO LIMITED
Appointment of Liquidators – WEST FOLKARDS LTD
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Appointment of Liquidators – FRASERCO CONSULTING LTD
Appointment of Administrator – STEWART MILNE GROUP LIMITED
Appointment of Liquidators – TALENTBOX LTD
Appointment of Administrator – STEWART MILNE HOMES CENTRAL SCOTLAND LIMITED
Appointment of Administrator – DMS VEHICLE LOGISTICS LTD
Appointment of Liquidators – ELIZABETH GRAY DEVELOPMENTS LIMITED
Appointment of Administrator – EQUIPMENT AND TRACK SOLUTIONS LIMITED
Appointment of Administrator – STEWART MILNE HOMES (KIRKTON) LIMITED
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Petitions to wind up (Companies) – ONE TRANSPORT UK LTD.
Appointment of Administrator – MILSPEED LIMITED
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Appointment of Liquidators – CLINICAL OPERATIONS FREELANCE SOLUTIONS LTD
Petitions to wind up (Companies) – QUAESTUS (RD) LIMITED
Appointment of Liquidators – VILLAGE CONSTRUCTION (NOTTS) LIMITED
Appointment of Administrator – ORANGE MOUNTAIN BIKES LIMITED
Petitions to wind up (Companies) – DRAYHILL LIMITED
Appointment of Liquidators – NEOSTELLA UK LTD
Appointment of Liquidators – THE BRITISH SCHOOL, TEHRAN
Appointment of Liquidators – KEITH IBBETSON CONSULTING LTD
Petitions to wind up (Companies) – ATECA MARINE LTD
Appointment of Liquidators – STONEHOUSE HCC LTD
Appointment of Liquidators – TC ASSOCIATES LIMITED
Petitions to wind up (Companies) – PHOTONGROW LTD
Appointment of Liquidators – PINE COAST CONSULTING LIMITED
Petitions to wind up (Companies) – TRIPLE M PROJECTS 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.
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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 for purchase on recourse?
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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!
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Check our compensation calculator to see how much your business could be owed!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.