Business news 17 October 2023
James Salmon, Operations Director.
BoE has work to do to bring inflation under control. Wage Inflation. E-commerce reforms needed to protect small firms. Homeowners paying up to 80% of income on mortgage repayments. And more business news that we thought would interest our members.
BoE has work to do to bring inflation under control
The Bank of England’s chief economist, Huw Pill, has indicated that if persistent elements of inflation remain then interest rates may have to stay high for longer. Speaking ahead of the release of official figures on September’s inflation due out on Wednesday, Mr Pill said the Bank of England still has “work to do” to get price rises under control, adding: “We cannot be complacent…It is important that we do not declare victory prematurely.” Economists polled by Reuters are expecting inflation to have fallen to 6.5%, down from the current level of 6.7%.
Wage Inflation
UK Wage Inflation data came in cooler than market expectations, figures from the Office for National Statistics showed. In the three months to August, annual growth in average total pay, excluding bonuses, was 7.8%. This was in line with market consensus, as cited by FXStreet.
The figure for the previous three-month period was revised upwards to 7.9% from 7.8%. Including bonuses, average pay growth cooled to 8.1%, which undershot market expectations of 8.3%. It was 8.5% in the three months to July.
UK delays publication of workforce data, raising concerns about accuracy
The Office for National Statistics has delayed publication of some of its monthly employment figures until next week, casting doubt over the accuracy of its findings on the state of the workforce.
FSB: E-commerce reforms needed to protect small firms
The Federation of Small Businesses (FSB) is calling for reform as new research suggests small businesses are facing an abundance of challenges on online marketplaces. According to the research, 53% of small businesses surveyed currently use an online platform, with 71% considering them “very important.” However, 39% reported difficulties in resolving issues. The study also found that 12% of businesses experienced fake or malicious reviews, 16% faced delayed payments from Amazon, and 24% were delisted when similar products surfaced.
The FSB has urged the Competition and Markets Authority (CMA) to investigate the charging structures of retail platforms and food delivery platforms. Amazon disagreed with the findings, stating that the survey does not accurately represent the experiences of its more than 100,000 UK-based sellers. A CMA spokesperson emphasised the importance of ensuring fair competition and consumer protection.
The FSB also called on the Government to make online fake and malicious reviews an offense and to introduce a dispute resolution procedure. The Department for Business and Trade stated that it is cracking down on false reviews and addressing late payments, which are a significant issue for small businesses.
Homeowners paying up to 80% of income on mortgage repayments
New research shows homeowners across the UK could be paying as much as 80% of their household income on monthly mortgage repayments. The analysis by conveyancing technology specialist Legal Bricks warns of a “mortgage time bomb” as the most expensive places to live in the UK, such as Oxford and Bath, see households spend over 75% of their income on mortgage costs. However, in the most affordable places to live, like Darlington and Hartlepool, homeowners are spending less than 25% of their income on housing.
IFS: Tories have no room for tax cuts
The Institute for Fiscal Studies has warned that the UK is facing increased taxes and tight public spending due to high levels of debt, a struggling economy, and elevated borrowing costs. The think tank predicts that the UK will enter a recession next year, with rising unemployment and continued pressures on household finances. The IFS expects taxes to rise by £52bn by 2027, largely due to freezing the income tax threshold, which it says is equivalent to a 6 pence rise in income tax. It also warns that there may have to be real-terms cuts to government budgets and reduced spending on public services. The IFS advises against deviating from the Government’s current plans, as it could cause long-term damage to the economy. The UK still faces a challenging macroeconomic outlook, with GDP 5.2% below its pre-pandemic trend. The IFS emphasises the need for sustained economic growth and cautions against further increases in debt.
Climate tech investment plummets
Investment in climate technology has fallen by 40% in the last year, according to a report from PwC. The report analysed more than 8,000 climate tech start-ups and over 32,000 deals worth more than £400bn. The decrease in investment reflects market conditions rather than a deliberate move away from climate tech. However, the share of funding going to climate tech continued to rise, accounting for over 10% of private market start-up investments in 2023. “A challenging macroeconomic environment, sinking valuations, and geopolitical turmoil has seen capital flows to climate tech ventures drop 40% at a time when climate tech needs it most,” said Will Jackson-Moore, global sustainability leader at PwC UK.
Rolls-Royce to axe 2,500 jobs
Rolls-Royce is expected to announce plans to lay off around 2,500 staff as the aircraft engine manufacturer pursues a restructuring of its non-engineering workforce. Although the redundancies will be distributed across its global operations, they are likely to affect hundreds of UK staff, Sky News reports. The recovery in global air travel following the coronavirus pandemic has revived Rolls-Royce’s financial position but its share price is still down on its pre-pandemic level. CEO Tufan Erginbilgiç has been working on efficiency plans since taking the helm in January.
HMRC’s ageing systems at risk
The UK is facing a potential security breach as a result of the Government’s failure to upgrade the outdated computer system of HMRC. The tax authority has warned that its old and ageing IT systems could lead to a major security breach, leaving taxpayers’ sensitive data vulnerable to hackers. The risk, codenamed red, is ranked as high, and experts have raised concerns about the threat of cyberattacks from countries such as Russia, China, and North Korea. The chair of parliament’s Treasury committee has demanded answers from HMRC officials, while cybersecurity experts have highlighted the increased risk of identity fraud and bank account takeovers. Heather Self, a tax expert at Blick Rothenberg, said criminals could target “lists of people in specific government departments or people in specific tax brackets”, or steal data to commit identity theft, fraudulent bank transfers, money laundering and open new bank accounts.
UK Government shelves stricter company disclosure rules
The Department of Business and Trade has scrapped plans to introduce new corporate reporting requirements for UK companies. Draft secondary legislation was published in July setting out plans to force large UK listed and private companies to publish annual resilience statements, distributable profit figures, material fraud statements and triennial audit and assurance policy statements.
However, pressure from top City figures and the Government to reduce the regulatory burden on British businesses prompted the Business Secretary Kemi Badenoch to withdraw the legislation. London Stock Exchange chief executive Julia Hoggett welcomed the move as did Lloyd’s of London, UK Finance and TheCityUK. In a statement, the Government said it remained committed to wider audit and corporate governance reform, including establishing a new Audit, Reporting and Governance Authority to replace the existing Financial Reporting Council. Business Minister Kevin Hollinrake added that the Government would “continue at pace with our plans to reform the wider non-financial reporting framework,” adding: “This will deliver a more targeted, simpler and effective framework for both business and investors, reinforcing that the UK is one of the best places in the world for firms to list and to do business.”
Roger Barker, director of policy and governance at the Institute of Directors, said the announcement “places the Government’s longstanding reforms of audit and corporate governance in disarray.” Barker said he shared concerns about the volume of reporting requirements faced by UK companies but felt “the Government’s unwillingness to follow through with long-expected reforms is a source of uncertainty for business,” a position shared by Jonathan Reynolds, Labour’s shadow business secretary.
House Prices
UK House Price Growth was muted this month by October’s usually loftier standards, numbers from Rightmove showed, though the property portal noted some calm is returning to the mortgage market. According to Rightmove, UK house prices rose 0.5% on-month in October, quickening slightly from September’s 0.4% rise. However, this month’s rise is markedly cooler than the 1.4% “historic norm” house price expansion usually delivered in October.
Boohoo Frasers
Frasers have made another swoop for shares in boohoo. The retailer, which owns Sports Direct and House of Fraser now owns 15.1% of the online retailer, increasing its stake from 13.4%. Only last week, Frasers lifted its holding from 10.4% to 13.4%, while in September, Frasers said it had raised its holding to 9.1%.
Latest Insolvencies
Appointment of Liquidators – CANON HOUSE PROPERTIES LIMITED
Appointment of Liquidators – GTA (SOURCING) LIMITED
Appointment of Liquidators – JOHN R.RUTHERFORD LIMITED
Appointment of Liquidators – WORKLIFE RECRUITMENT SERVICES LTD
Appointment of Liquidators – PREMIER CONFERENCING LIMITED
Appointment of Liquidators – C.K.M. TIMBER LIMITED
Appointment of Liquidators – DPS (SOUTH WEST) LTD
Appointment of Liquidators – WHEATROYD DEVELOPMENTS LTD
Appointment of Liquidators – ISANGO! LIMITED
Appointment of Liquidators – APOSTLE ACCOUNTING LIMITED
Appointment of Liquidators – SEBANNA TECHNOLOGY LIMITED
Appointment of Liquidators – TRATTORIA GUIDI LIMITED
Appointment of Liquidators – MANOR ROW ESTATE COMPANY LIMITED(THE)
Appointment of Liquidators – CLINIPHY LTD.
Appointment of Liquidators – TRAVEL SCOT WORLD LIMITED
Appointment of Liquidators – PREMIER VOICEMAIL LIMITED
Appointment of Administrator – NARYA HART LIMITED
Appointment of Liquidators – FABLETECH LTD
Appointment of Liquidators – TJM CONSULT LIMITED
Appointment of Liquidators – I R REMOVALS LIMITED
Appointment of Liquidators – CAMBRIDGE BIOTECHNOLOGY LIMITED
Petitions to wind up (Companies) – THE COMMUNITY CONNECTIONS GROUP LTD
Appointment of Liquidators – SKETCHY IDEAS LIMITED
Appointment of Liquidators – TRIMBOB LTD
Appointment of Liquidators – ADVENN LIMITED
Appointment of Liquidators – DIRECT BUILDING MAINTENANCE SERVICES LIMITED
Petitions to wind up (Companies) – INN DEEP LTD
Appointment of Liquidators – RIVERSIDE ART & GLASS LTD
Petitions to wind up (Companies) – HECTAGON (UK) LIMITED
Appointment of Liquidators – IAN SILVESTER CONSULTING LIMITED
Appointment of Liquidators – ROWTEST LTD
Petitions to wind up (Companies) – EMISSION CLAIM LIMITED
Petitions to wind up (Companies) – RB HOTELS (MARFORD) LIMITED
Appointment of Liquidators – VP HOLDING COMPANY 1 LIMITED
Appointment of Liquidators – OHANA DAY NURSERIES LTD
Petitions to wind up (Companies) – AYLES GROUP LIMITED
Appointment of Liquidators – INSPIRED CAMPS LTD
Appointment of Liquidators – PHOENIX LEADERS LIMITED
Petitions to wind up (Companies) – J8 MECHANICAL LTD
Appointment of Liquidators – BARNWOOD ESTATES LIMITED
Appointment of Administrator – PARKERS BAKERY LTD
Appointment of Liquidators – EFFECTUS PEOPLE SOLUTIONS LTD
Appointment of Liquidators – LISTRAC FINANCE LIMITED
Petitions to wind up (Companies) – SIELEY PROPERTY LIMITED
Petitions to wind up (Companies) – THEATRERY LTD
Appointment of Liquidators – BBJ CONSULTING SERVICES 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!
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!
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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.