Business news 18 February 2025
Pay & Unemployment, Inflation, Pessimism, late payment interest, business rates, tax, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Pay & Unemployment
UK pay growth accelerated to 5.9% in Q4 2024 up from 5.6% in Q3 2024 said the Office for National Statistics. The number of employees on payroll was broadly unchanged in Q4 2024 whilst the number of vacancies fell 9,000 to 819k. UK unemployment remained at 4.4% despite rising 48k to 1.56m unchanged against expectations of a rise to 4.5%
Inflation
Bank of England Governor Andrew Bailey played down the threat of a resurgence in UK inflation, saying it is “not telling us a story about the fundamental state of the economy.” We are facing a short-run hump in inflation. It’s going to go up but nothing like what it was a few years ago.” He said increases in inflation will be largely driven by regulated prices, such as energy bills. “We took two views on that. One was, well, this is not telling us a story about the fundamental state of the economy. Secondly, it’s going to take place against a background of a position which is sort of weaker in growth terms than we thought it would be.” adding “The process of disinflation has actually gone faster than we thought it would based on a lot of history.” “We are facing a weak growth environment in the UK.” Andrew Bailey said he’d like to see less volatility in bond markets, much of which he puts down to a flurry of announcements around US tariffs.
Labour voters increasingly pessimistic about the economy
More than half of Britons are feeling increasingly pessimistic about the economy, largely due to the Chancellor’s tax increases and cuts to winter fuel payments for pensioners. According to a survey by Ipsos, only 29% of Labour voters believe the party has improved the economy, while 26% are undecided. Overall, 52% of Britons are more pessimistic. Gideon Skinner from Ipsos said: “The public remain unconvinced about the overall direction of the economy under Rachel Reeves’s stewardship.” The survey results indicate that many anticipate rising unemployment, with older voters particularly disillusioned.
Rates drop on late payments
The interest rate on late payments for taxpayers with outstanding tax debts to HMRC has fallen from 7.25% to 7%, affecting approximately 1.1m taxpayers who missed the self-assessment deadline. The reduction follows the Bank of England’s base rate cut from 4.75% to 4.5%. Andy Wood, a tax expert, remarked that while the cut is beneficial, “the real issue is that taxpayers still pay double the interest on late payments compared to what HMRC pays them in refunds.” Currently, HMRC pays 3.5% interest on tax refunds.
Northern businesses hardest hit by rate hikes
Small businesses in the North are set to face significant challenges due to changes in business rates this spring. Chancellor Rachel Reeves announced a reduction in rates relief from 75% to 40%, resulting in an additional £140m burden for retail, hospitality, and leisure firms. Andrew Goodacre, chief executive of the British Independent Retailers Association, said: “Many more businesses based in the North will have received full relief compared to those in the South, and will therefore feel more of the pain from this 140% increase in the rates bill.” The impact is expected to be severe, with many smaller firms potentially closing, and even larger ‘anchor’ retailers reconsidering their presence in the North. The Government claims that an overhaul of business rates will eventually lead to a “permanent tax cut” for properties valued below £500,000.
Rising costs force 300 pubs to shut
The British Beer and Pub Association (BBPA) has raised alarms over the alarming rate of pub closures, urging the Government to take immediate action to prevent further losses. In 2024, 289 pubs in England and Wales closed, with London experiencing the highest number of closures at 34. Emma McClarkin, chief executive of the BBPA, said: “The scale of these closures is completely avoidable because pubs are doing a brisk trade.” The closures are attributed to rising borrowing costs, high energy bills, and increased financial pressures on households.
Tax hikes loom to pay for defence boost
Rachel Reeves would have to raise taxes by an additional £12bn to increase defence spending to 2.5% of GDP and avoid further cuts to services. Ben Zaranko from the Institute for Fiscal Studies stated that “additional tax rises were the most likely path” for the Chancellor, who is already facing pressure from unions regarding public sector pay. Emily Fry from the Resolution Foundation commented: “Funding this aspiration is far from straightforward, especially as the public finances are already under strain.” The situation is compounded by reports of steep job losses as businesses prepare for the impact of the Chancellor’s tax increases.
Supreme Court blocks Treasury move in car loan scandal
The UK’s Supreme Court has denied the Treasury’s request to intervene in a review of a significant ruling related to the motor finance scandal, marking a setback for several lenders. The Treasury’s application had raised hopes that the car loan industry could avoid paying out tens of billions in compensation, leading to a temporary rise in share prices for some lenders. However, following the court’s decision, shares in Close Brothers and Lloyds Banking Group fell. The Court of Appeal’s previous ruling deemed undisclosed commissions unlawful, prompting appeals from Close Brothers and FirstRand. The Treasury expressed its desire for a “fair and proportionate judgment” to ensure consumer compensation aligns with losses. Meanwhile, the Financial Conduct Authority’s application to intervene was granted, with a spokeswoman saying: “We look forward to assisting the court.”
Markets
Yesterday, the FTSE 100 closed up 0.41% at 8768.01 and the Euro Stoxx 50 closed up 0.48% at 5519.83. The US market was closed for Presidents day.
UK / EU defence companies staged significant gains on expectations that defence spending will be increased firstly for Ukrainian peacekeeping, but also in response to US pressure to increase EU funding for NATO. The PM of Poland, Donald Tusk said that European leaders needs to ‘immediately boost’ Europe’s defences.
The Bank of England Governor has warned the UK economy is static whilst the labour market is ‘softening’ playing down the recent 0.1% rise in UK GDP. The comments were seen as dovish for sterling and suggesting further reductions in bank rate will be required over 2025.
This morning on currencies, the pound is currently worth $1.2595 and €1.204. On Commodities, Oil (Brent) is at $75.65 & Gold is at $2910. On the stock markets, the FTSE 100 is currently up 0.06% at 8773 and the Eurostoxx 50 is down 0.03% at 5518.
Top US and Russian officials are meeting in Saudi Arabia to discuss how to end the war in Ukraine, without anyone from Kyiv taking part. European defense stocks are gaining for a fourth day and government bonds are falling on the prospect of higher spending in the bloc.
Gold prices soar as UBS predicts rise
Gold prices have surged by 10% in 2025, reaching $2,900 (£2,300), prompting UBS to upgrade its target price for the precious metal. Analyst Joni Teves noted that gold is experiencing “unprecedented market dislocations” and is expected to continue rising due to “deep-rooted bullish sentiment.” Teves also mentioned that uncertainties regarding tariffs and global conflicts are likely to benefit gold’s appeal. UBS forecasts that gold will climb to $3,200 later this year before settling above $3,000 by the end of 2025. Alec Cutler from Orbis Investments pointed out that despite gold’s rising prices, Western investors have been slow to engage, with central banks and Asian investors driving the current rally.
Labour urged to exempt care sector from tax raid
The adult social care sector is facing a significant financial crisis due to the planned increase in employers’ National Insurance contributions, which will rise to 15% and lower the earnings threshold. Mark Lloyd, managing director of RMBI Care, stated that “providers are being pushed over the edge” by this tax hike. The Nuffield Trust estimates a £900m impact on the sector, prompting over 50 MPs to urge Chancellor Rachel Reeves to reconsider her plans. They support a proposal from Box Power to exempt the care sector from these changes and explore alternative funding methods. Stephen Trowbridge of First City Nursing described the tax rise as a “direct attack on social care,” while Robert Kilgour warned of potential care home closures and the risk to vulnerable elderly lives.
Labour losing argument over IHT raid
The Labour Government’s proposed reforms to inheritance tax have ignited significant backlash from farmers and business owners, with William Lees-Jones, managing director of JW Lees, stating that the Prime Minister is “losing the argument and feeling rattled.” He likened the current situation to Margaret Thatcher’s Poll Tax, which contributed to her downfall. Lees-Jones expressed concerns that the reforms pose an “existential threat” to family businesses, warning that his family may not be able to manage the tax burden upon his death. Elsewhere, British hotel tycoon Steve Perez, who owns a string of upmarket restaurants and hotels in the East Midlands, as well as the drinks company Global Brands, said he is taking out a £6m insurance policy so is business doesn’t have to be sold in the event of his death. He said: “That’s the first quote I’ve had, but I’m probably going to have to increase that to at least £10m. I’ve got no incentive to grow the business now. In fact, it’s a disincentive to grow the business because it’s going to cost me more.”
Local audit oversight returns to government control
The Government has taken back oversight of local audit from the Financial Reporting Council, with leadership responsibilities transferred back to the Ministry of Housing, Communities and Local Government (MHCLG). As part of the transition, Neil Harris, the FRC’s director of local audit, will now be supporting the department as an independent expert adviser. An FRC spokesperson said: “The FRC is proud of what it has achieved as local audit system leader. It is FRC policy not to comment on individual employees’ circumstances, particularly as we, like other local audit system members, await the outcome of MHCLG’s consultation to understand how the proposed framework will operate in the future.”
Premier League clubs claim millions in R&D relief
Premier League football clubs have claimed substantial public funds through a research and development (R&D) tax relief scheme, designed to support genuine advancements in science and technology. Chelsea FC alone received over £2m from HMRC between 2020 and 2023. An audit revealed that 28 top-flight clubs across various sports have claimed a total of £13m since 2019. Harlequins FC and Nottingham Forest are among other beneficiaries, with claims of £1.3m and £607,000, respectively. Tax expert Dan Neidle asked: “If they have made such valuable scientific and technological advances, where are they?” HMRC has faced criticism for its oversight of the scheme, which has seen costs rise from £1.1bn in 2010 to £7.5bn in 2023, with losses due to fraud and error reaching £4.1bn since 2020.
Latest Insolvencies
Appointment of Administrator – PRESTON FARM PHARMACY LIMITED
Appointment of Liquidators – RIQS CONSULTANCY LTD
Appointment of Liquidators – CAVEN CONSULTANCY LTD
Appointment of Liquidators – ELITE0403 LIMITED
Appointment of Liquidators – JON LIGHTFOOT CONSULTING LTD
Appointment of Liquidators – ROCCA ADVISORY LIMITED
Appointment of Liquidators – HARKIRAN CONSULTANCY LIMITED
Appointment of Liquidators – ROHIT KUMAR (UK) LTD
Appointment of Liquidators – EBF ASSOCIATES LIMITED
Appointment of Liquidators – RYEWOOD CONSULTING LIMITED
Appointment of Liquidators – UXANDI LTD
Appointment of Liquidators – LEVY GORVY LIMITED
Appointment of Liquidators – LIMIT STATE CONSULTING LTD
Appointment of Liquidators – GREEN DEAL FINANCE COMPANY LIMITED
Appointment of Liquidators – ATELIER HAUS LTD
Appointment of Liquidators – VERUS ENERGY LIMITED
Appointment of Liquidators – SRIMADS CONSULTANCY LIMITED
Appointment of Liquidators – MRC MANAGEMENT CONSULTANCY LIMITED
Appointment of Liquidators – EYE BRYCE LTD
Appointment of Liquidators – ASIA DRAGON TRUST PLC
Appointment of Administrator – QUALITY PRECISION ELECTRONICS LIMITED
Appointment of Liquidators – BROCO DEVELOPMENTS LIMITED
Appointment of Liquidators – HZI SERVICE UK AND IRELAND LTD
Petitions to wind up (Companies) – GFP PAID LIMITED
Petitions to wind up (Companies) – FERRENI ENERGY UK LIMITED
Appointment of Liquidators – DESMOND LYNCH HOLDINGS LIMITED
Petitions to wind up (Companies) – THE BRUNO EFFECT LIMITED
Petitions to wind up (Companies) – NEEDHAM HOTEL AND SPA LIMITED
Petitions to wind up (Companies) – ELITE AESTHETICS TRAINING ACADEMY LTD
Petitions to wind up (Companies) – RF BIOENERGY LTD
Petitions to wind up (Companies) – CONRAD CAPITAL LIMITED
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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!