Business news 16 August 2023
James Salmon, Operations Director.
Inflation cools to 6.8%. Insolvencies fall in July. Mortgage holders may be ‘overly optimistic’ on debt. Attempted fraud up 146%. 440,000 Brits lose millionaire status. Wage increases hit a new high and unemployment climbs to 4.2%. And more business news that we thought would interest our members.
Breaking news – Inflation cools to 6.8%
UK Inflation cooled sharply in July to an annual 6.8%, but the core consumer price index remained unchanged, posing a potential headache for the Bank of England. The headline CPI reading was in line with a consensus forecast among economists polled by Reuters, and follows the cooler-than-expected 7.9% figure of June. On a monthly basis, the headline CPI decreased by 0.4% versus a consensus forecast of -0.5%.
The Pound strengthened moderately in response to 1.276 US Dollars and 1.167 Euros
Insolvencies fall in July
Insolvency Service data shows that the total number of insolvencies fell 6% year-on-year to 1,727 in July. The decline was driven by a sharp drop in the number of directors closing their businesses through creditors’ voluntary liquidations. These fell by 17% to 1,336. The number of administrations rose 53% to 124, while the number of compulsory liquidations rose by 81% to 248. Marco Piacquadio, of insolvency practitioner FTS Recovery, said that while the headline figures appeared to be “relatively good news”, there had been “an increase in larger businesses looking for help and guidance.”
FCA: One in 10 interest-only mortgage holders may be ‘overly optimistic’ on debt
The Financial Conduct Authority (FCA) has warned that one in 10 interest-only mortgage holders might be “overly optimistic” about paying off their debt. Research commissioned by the regulator shows that 82% of borrowers are confident that they could repay what is left on their loan at the end of the mortgage term. However, the FCA said research suggests this “may be overly optimistic,” noting that while 36% of borrowers expected some shortfall, modelling suggests this could be closer to 46%. Analysis by the watchdog shows that there were 774,000 purely interest-only mortgages at the end of June last year, as well as 240,000 part interest-only mortgages. These account for 8.8% and 2.9% of regulated mortgages, respectively. The FCA notes that the number of interest-only mortgages is now around half of that recorded in 2015.
PM sees ‘light at the end of the tunnel’ on inflation
Rishi Sunak says there is “light at the end of the tunnel” for the Government’s plan to halve inflation. Arguing that the “best way to be able to bring interest rates down and stop them going up is to bring inflation down,” the Prime Minister insisted that ministers are “making progress” and said it is “important that we stick to the plan.” “The plan is working. I think there is light at the end of the tunnel,” he added.
Attempted fraud up 146%
The latest NICE Actimize Fraud Insights Report reveals that attempted fraud transactions have skyrocketed by 92% and attempted fraud amounts have soared by 146%.
Umbrella companies could be ‘regulated out of existence’
Contractor lobbying body, IPSE, has highlighted concerns with elements of the government’s proposals to stop tax avoidance in the umbrella sector, suggesting some strands could see umbrellas “regulated out of existence”.
One suggestion is to make agencies responsible for deducting employment taxes from the fee paid to the umbrella company. But this would lead to confusion and eliminate one of the key responsibilities of Umbrella – the calculating and deducting of taxes.
Another proposal that IPSE is concerned about is the transfer of tax debt across the supply chain. This would see the tax debt owed by a non-compliant umbrella transferred to another party in the supply chain.However, this is likely to dissuade companies dealing with umbrella companies altogether.
The government’s consultation – Tackling non-compliance in the umbrella company market – closes at 11.59pm on Tuesday 29th August. It is currently open to submissions from stakeholders. This includes individual contractors as well as professional bodies.
440,000 Brits lose millionaire status
Private wealth has taken a hit from soaring inflation and a collapse in global currencies, with more than 3.5m people losing their millionaire status last year. Analysis by UBS and Credit Suisse shows that the number of people with assets totalling $1m fell from 62.9m to 59.4m during 2022.
Britain saw the third largest fall, with the number of millionaires dropping by 440,000 to 2.6m.
The report shows that private wealth fell 2.4% to $454.4trn at the end of 2022, with $11.3trn wiped off the value of personal assets. Despite a decline in 2022, UBS and Credit Suisse expect global wealth to rise by 38% to $629trn by 2027, while the number of millionaires will increase to 86m during the five-year period. Separate research for the Bloomberg billionaires index found that the richest 500 people in the world lost a total of $1.4trn in 2022.
Wage increases hit a new high
Wage increases in the UK have reached a new record high, climbing by 7.8% between April and June, up from 7.5% in the March to May quarter. The increase means regular pay growth almost matched inflation, which currently stands at 7.9%. Total pay, including bonuses, rose by 8.2% a year in the three months to June. Within the headline figures, the Office for National Statistics (ONS) data shows that private sector wage growth increased to 8.2% while public sector pay increased by 6.2%. The ONS data means the Bank of England could be more likely to hike interest rates from 5.25% to 5.5% in September. CMC Markets analyst Michael Hewson says the numbers “have not just given the central bank a headache, but a migraine,” while analysts at Capital Economics now expect the Bank to deliver “one more 25 basis point rate hike before it brings its tightening cycle to a close.” Dr Sushil Wadhwani, a former member of the Bank’s Monetary Policy Committee, said the news of wage growth is “disappointing” for rate setters as it likely means interest rates will have to increase to at least 5.5%. Meanwhile, Roger Barker, director of policy and corporate governance at the Institute of Directors, warned that rising wages are a worry for employers, saying: “Such a backdrop of continuing wage cost pressures and labour shortages is not a positive one for many businesses.”
Unemployment climbs to 4.2%
Data from the Office for National Statistics shows that unemployment increased from 3.9% to 4.2% in the three months to June. This is the highest rate since 2021. The report also shows that inactivity in the labour market due to long-term sickness hit a new record high of 2.58m. The number of employees on the payroll increased by 97,000 to 30.2m in July, while job vacancies fell by 66,000 and now stand at around 1.02m. The number of workers on zero-hours contracts in the three months to the end of June increased to 3.6% of the workforce, up from 3.4% in the previous three months. Reflecting on the ONS figures, Chancellor Jeremy Hunt said: “Thanks to the action we’ve taken in the jobs market, it’s great to see a record number of employees.” He added: “Our ambitious reforms will make work pay and help even more people into work – including by expanding free childcare next year – helping to deliver on our priority to grow the economy.”
Supermarket inflation slows again
Supermarket inflation has slowed for the fifth month in a row, with grocery price growth falling to 12.7% in the four weeks to August 6, the second sharpest slowdown in price in 15 years, according to survey data from Kantar. This marked a month-on-month decline of 2.2 percentage points. This comes on the back of price drops on staples including milk, pasta, bread and cooking oils, with a four-pint carton of milk down around 19p to £1.50. Retailers have been under pressure to ensure falling ingredient costs filter through to supermarket shelves. While a Competition and Markets Authority review into possible profiteering found no evidence of retailers doing so, the watchdog urged supermarkets to lower prices where they could afford to. During the same period, take-home grocery sales increased by 6.5% from a year before, slowing from a 10.4% annual rise a month before.
Firms start to prioritise skills over degrees
UK businesses are shifting their hiring focus from degrees to specialised skills, according to research by LinkedIn. The share of vacancies that do not require a university degree increased by 90% last year. Recruiters are now five times more likely to prioritise skills over qualifications, with four in five expecting skills-first recruitment to become the norm in the next 18 months. The Institute of Student Employers found that less than half of graduate jobs required a minimum 2:1 degree last year. It is noted that employers including PwC have already dropped degree-level requirements for certain roles.
AI
Rishi Sunak is reportedly planning an AI summit later this year that will aim to invite the likes of Joe Biden and other G-7 leaders, along with tech chiefs such as OpenAI’s Sam Altman and Microsoft’s Satya Nadella
Bank of Ireland resolves glitch
The Bank of Ireland has confirmed that it has rectified a technical problem which that let customers withdraw funds from ATMs they didn’t have and allowed customers to go beyond their normal withdrawal and transfer limits.
HMRC staff working remotely at record levels
Official data shows that 95% of HMRC staff work remotely at least one day per week, with this the highest proportion since the height of the pandemic. Performance reports from HMRC show that in June the department answered 70% of telephone calls, down from 85% in June 2021. With Gareth Davies, the National Audit Office’s auditor general, highlighting that HMRC’s accounts showed performance “deteriorating” over the past year, an HMRC spokesman said: “There is no link between our customer service performance and working from home. All our staff are held to the same standards, whether they are working from an HMRC building or from home.”
Latest Insolvencies
Appointment of Liquidators – WOLSEY PROJECTS LTD
Appointment of Liquidators – STEPHENSON PROPERTIES LIMITED
Appointment of Liquidators – PROJECTOOL LIMITED
Appointment of Administrator – CHARNWOOD PAINT SPECIALISTS LIMITED
Appointment of Liquidators – J BEAVORS FINANCIAL CONSULTANCY LIMITED
Appointment of Liquidators – GYANA LIMITED
Appointment of Liquidators – EVELYN STREET LTD
Appointment of Liquidators – VERDEMAT BOWLS LIMITED
Appointment of Liquidators – DEPENDABLE COMPUTING LIMITED
Appointment of Administrator – STAND SAFE LTD
Appointment of Liquidators – HOLLANDS SHERINGHAM LIMITED
Petitions to wind up (Companies) – DUCHY FARM KENNELS LIMITED
Appointment of Liquidators – GLASFOR DEVELOPMENT LTD
Appointment of Liquidators – AKL SEARCH LTD.
Petitions to wind up (Companies) – E R PROPERTY RENTALS LIMITED
Appointment of Administrator – JW-G CONSTRUCTION LTD
Appointment of Liquidators – R T C AGRICULTURAL LIMITED
Petitions to wind up (Companies) – SEXI PROPERTY GROUP LTD
Appointment of Liquidators – AICIL LTD
Appointment of Liquidators – SALLYANN FREUDENBERG CONSULTING LIMITED
Petitions to wind up (Companies) – BROSS BAGELS LIMITED
Petitions to wind up (Companies) – FIREWORK SUPERSTORE LIMITED
Petitions to wind up (Companies) – CREPE OLE LIMITED
Petitions to wind up (Companies) – FUEL AND GROCERY LTD
Appointment of Administrator – HENLEY HOMES PUBLIC LIMITED COMPANY
Appointment of Liquidators – FUSTRA LIMITED
Appointment of Liquidators – CRM CONSULTING LIMITED
Appointment of Liquidators – SEN SYSTEMS ENGINEERING LTD
Appointment of Liquidators – AXIS COMPUTER SYSTEMS LIMITED
Appointment of Liquidators – ATLANTIC MED MARINE LIMITED
Appointment of Liquidators – DATA MIGRATION SOLUTIONS LIMITED
Appointment of Liquidators – NORDIC BLACK CONSULTING LTD
Appointment of Administrator – R&W CIVIL ENGINEERING LTD
Appointment of Liquidators – ELAN CONSULTING (SUFFOLK) LTD
Appointment of Liquidators – TRS PR LTD
Winding up Order (Companies) – ESSEX CLADDING TEAM LTD
Appointment of Liquidators – A MENZIES LTD
Appointment of Administrator – R & W 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!
No face-to-face meeting required – 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?
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.