Business News 16th August 2017

CPA hopes to inform, with its daily bite-size business news on Wednesday 16th August 2017, filled with stories we think will interest our members and visitors.

Markets Round up

The FTSE 100 continued to bounce from last week’s lows, to close 30 points higher yesterday at 7383. The pound fell against most major currencies after weaker-than-expected inflation data was seen as reducing the prospect of an early rise in UK interest rates. A fall in the pound benefited the FTSE 100 as it means overseas earnings which make up the majority of the indexes earnings are worth more when they are converted back into sterling. CPI inflation remained unchanged at 2.6% last month, whereas analysts had expected the rate to climb to 2.7%. That this was a currency move was shown by the more UK centric FTSE 250 which didn’t move. European  Shares rose modestly (Euro Stoxx 50 up 0.3%), recovering further ground as geopolitical tensions eased in holiday-thinned trading, though falls among commodity-related stocks capped gains.  US shares stalled their recovery with all the major indexes barely moving despite better-then-expected retail sales data . In Asia Hong Kong, Indian  and Korean Stocks were up while Japanese and chinese stocks were flat. Oil prices extended their declines with WTI at $47.88 and Brent at $51.22, after data showed that crude output from key U.S. shale regions is likely to continue to grow. Gold prices fell sharply to $1269 on after better-than-expected U.S. economic data and the decrease in tensions over North Korea encouraged investors to buy riskier assets.  The pound continues to weaken against most currencies  as it fell to 1.1003 euros and 1.2883 US dollars.

UK employment

UK unemployment falls to fresh 42-year low at 4.4%. The UK’s unemployment rate fell again to its lowest level in over 40 years in June, while wage growth climbed above expectations in an impressive jobs report. UK wages grow by better than expected 2.1%. UK unemployment rate hits lowest since 1975.

US Retail

US Retail sales volumes sped ahead by 0.6% on the month in July to reach $478.9bn, according to the Department of Commerce, following an upwardly revised gain of 0.3% in the month before. The print for June was originally pegged at a 0.1% dip on the month. Sales of motor vehicles and building materials both increased by 1.2% month-on-month to reach $100.1bn and $31.44bn, respectively. Watch out today for the FED minutes to indicate how the current data is influencing the central banks thinking. recent soft inflation figures are likely to have had an impact.


The UK Government said it does not want to reintroduce controls on the border between Northern Ireland and the Republic of Ireland after it leaves the EU in March 2019. The avoidance of any kind of physical infrastructure on the border would be its number one priority when negotiating its only land frontier with the EU, the Department for Exiting the EU said. The statement came in a paper released as part of a series detailing Britain’s position on key Brexit issues before a third round of negotiations start on August 28.


“Anglo-Saxon political angst” is spurring a shift in investment from U.S. and British equities to Europe, according to a survey by Bank of America Merrill Lynch. Money managers cut allocations to the two nations to a post-financial crisis low amid a war of words between Trump and his North Korean counterpart and warning confidence in the ability of U.K. PM Theresa May to negotiate Brexit.


The International Monetary Fund has warned that China’s credit growth is on a “dangerous trajectory”. In a new report, the IMF says there is an increasing risk of a “disruptive adjustment” and/or a marked slowdown in economic growth”. The agency calls for decisive action to deflate the credit boom smoothly. Without the boom, the report suggests, China’s recent economic expansion would have been significantly slower. Since the global financial crisis, China’s economic growth has slowed, from an average of 10% a year in the previous three decades to a rate of 6.7% last year.


Finance Minister Wolfgang Schaeuble said on Tuesday he did not share the view of Germany’s constitutional court that the European Central Bank may be violating laws on monetary financing with its 2.3 trillion euro asset purchase programme. “I don’t share this opinion,” Schaeuble said during a business dinner hosted by the Handelsblatt business newspaper. “I believe that the (ECB) mandate is being implemented,” he added in a rare defence of the central bank. He said that the ECB was exhausting the tools at its disposal to “fulfil its hellishly difficult task of devising a monetary policy for many different countries.”

HMRC warns taxpayers over ‘disguised remuneration’ manoeuvre

HMRC has warned taxpayers that ruses to escape its “disguised remuneration” crackdown will not work, and those who consider them face a significant penalty or even prosecution. HMRC has issued a “spotlight notice” to draw attention to flaws in a scheme aimed at avoiding a 2019 charge that is expected to raise more than £1bn from people who once used offshore trusts to cut their tax bills.

The Financial Times

Rates appeals collapse following reforms

Official appeals against business rates have plummeted since the introduction of reforms in April, small business groups have warned. Businesses claim the “check, challenge and appeal” system for contesting bills has made it nearly impossible to challenge calculations that may be incorrect. The Times reports that between April 1, when the new system began, and the end of July about 2,200 businesses had instigated an official “check” of their bill. That compared with 57,430 appeals within the first three months of the last revaluation period in 2010. Mike Cherry, chairman of the Federation of Small Businesses, said that the new system had heaped “further misery on thousands of small firms”.

The Times, Page: 33

Trump Threat on Obamacare Would Boost Deficit

Health plan premiums for some in Obamacare will surge and the federal deficit will increase by almost $200 billion over a decade if President Donald Trump follows through on a threat to halt certain insurance subsidies under the law, the Congressional Budget Office said Tuesday. The CBO, which provides nonpartisan analysis of federal policy issues for lawmakers, released the report Tuesday after the Trump administration made repeated threats to stop paying cost-sharing reduction subsidies under Obamacare. The payments go to insurers, and are used to help reduce out-of-pocket costs for poorer Americans in the program. Stopping the payments would have several effects, CBO said. Premiums for mid-level Obamacare plans — known as “silver” — would rise by 20 percent next year, and by about 25 percent in 2020, the agency said. The CBO also estimated that the federal deficit would rise by $194 billion over the next decade — because the government would subsidize those increased premiums.

White House power struggle

Steve Bannon – once considered Donald Trump’s most powerful adviser – is fighting off claims that the president is considering adding him to the list of ousted White House aides. The president’s chief strategist is under pressure for escalating a power struggle with HR McMaster, the national security adviser, and for his ties to the alt-right movement which is under new scrutiny in the wake of violent protests in Charlottesville, Virginia.  In recent weeks, Mr. Bannon has found himself increasingly isolated in the White House as centrists including John Kelly, the president’s new chief of staff, consolidate control and seek to temper the influence of nationalists like the chief strategist.  For the time being, the former Breitbart media group executive chairman remains influential. Many credit him with helping Mr. Trump craft his initial, widely criticized response to the weekend violence in Virginia, which the president blamed on “many sides”. Mr. Trump did not criticize the white supremacist groups that organized the ill-fated rally, which led to the death of one person, for a full 48 hours

Government urged to slash stamp duty

Paul Smith, chief executive of estate agency chain Haart, has urged the government to cut stamp duty to ease the burden on those looking to buy a home. He said the levy amounted to “excessive profiteering at the expense of the aspiring homeowner.” The call comes as official figures showed that the price of the average house in the UK increased by £10,000 last year to £223,000.

Daily Express, Page: 25   The Independent, Page: 66

Gates donates $4.6bn to charity

Bill Gates has given away $4.6bn (£3.6bn) to charity in his largest donation since 2000. He remains the world’s richest person, despite giving away 64m shares in Microsoft. The shares are equivalent to 5% of his total fortune, currently estimated to be $89.9bn.

The Times, Page: 38   The Guardian

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Previous News pages

Business News 15th August 2017

Business News 14th August 2017

Business News 11th August 2017

Business News 10th August 2017

Business News 9th August 2017

Business News 7th August 2017

Business News 3rd August 2017

Business News 2nd August 2017

Business News 1st August 2017

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