Business news 18 October 2024
Taskforce will advise Reeves on infrastructure projects. Gen Z workforce worries CEOs. Tax hikes leave hospitality in shock. Millennials struggle to meet financial goals. Tax, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Taskforce will advise Reeves on infrastructure projects
Rachel Reeves, the Chancellor, is set to consult with City experts to ensure her multibillion-pound infrastructure projects provide value for money and maintain market confidence. Ahead of her tax and spending event on 30 October, she will convene the inaugural meeting of the British Infrastructure Taskforce, which includes major City institutions like HSBC and Lloyds. This initiative follows the establishment of the National Infrastructure and Service Transformation Authority (Nista) to oversee significant public works. Darren Jones, Chief Secretary to the Treasury, stressed the need for “guardrails” to ensure taxpayer money is well spent. He stated: “You need expert, institutional and some independent guardrails to make sure that everybody has confidence in the way that government is spending taxpayer money.” The Government plans to announce a 10-year infrastructure strategy, focusing on key projects such as roads, railways, and public facilities.
Gen Z workforce worries CEOs
Managing a Gen Z workforce poses significant challenges for chief executives, with only 38% expressing confidence in addressing their demands for higher pay. A report from The PHA Group, based on insights from 150 UK professional services CEOs, highlights that less than a third have a crisis communications plan to tackle these issues. The Hayes 2024 salary and recruiting trends report reveals that job security (66%), team culture (60%), and flexible working policies (50%) are crucial for attracting young talent. Stuart Skinner, managing director at The PHA Group, remarked, “CEOs can’t cover every challenge on their own and it’s no wonder many feel under-prepared.”
Tax hikes leave hospitality in shock
Hospitality leaders are expressing their “utter disbelief” at the potential for tax increases alongside new workers’ rights regulations ahead of the Chancellor’s Budget on October 30. The sector is facing hikes in employers’ National Insurance contributions and business rates, which could lead to significant price increases, such as £25 for fish and chips, as noted by Louise Maclean from Signature Pubs. She remarked: “Profits are diminishing to a level that on occasion makes you think ‘God, what’s the point?'” Nick Mackenzie of Greene King highlighted that these financial pressures threaten the vital role pubs play in communities and the UK economy.
Millennials struggle to meet financial goals
According to a study of 4,000 adults, fewer than 10% of millennials have achieved their financial goals, with ‘lifestyle inflation’ being a significant factor. The research revealed that 40% of millennials believed they would have saved more by now, but instead, many prioritised lifestyle upgrades as their income increased. On average, millennials are £25,000 short of their savings expectations, largely due to the high cost of living (65%) and unexpected expenses (44%). Carl Watchorn, head of banking at first direct, said: “Our research shows millennial and Gen Z savers are reaching big milestones later than their parents and grandparents.” Despite these challenges, 73% of millennials remain determined to achieve their financial goals, with 61% feeling more financially resilient in recent years.
Fraud
Fraud cases have risen by 16% with con artists stealing more than £3m a day, according to figures from the banking industry.
Criminals have particularly targeted victims by tricking them out of their one-time passcodes, trade body UK Finance said.
Retail
UK Retail Sales performed better than expected in September, data published by the Office for National Statistics showed Friday. Retail sales climbed 0.3% monthly in September, slowed from 1.0% in August but beating FXStreet-cited expectations of a 0.3% contraction. Notably, retail sales rose 3.9% on-year in September, the fastest annual rise since February 2022, and beating growth of around 2.3% in August.
US retail sales rose 0.4% to $71.4bn between August and September according to the US Commerce Dept, an acceleration from the previous month at 0.1%
Markets
Yesterday, the FTSE 100 closed up 0.67% at 8385.13 and the Euro Stoxx 50 closed up 0.79% at 4947.30. Overnight in the US the S&P 500 was flat at 5841.47 as was the NASDAQ at 18373.61.
This morning on currencies, the pound is currently worth $1.304 and €1.203. On Commodities, Oil (Brent) is at $74.4 & Gold is at $2707. On the stock markets, the FTSE 100 is currently down 0.25% at 8364 and the Eurostoxx 50 is up 0.5% at 4973.
It is noteworthy that Gold has topped $2,700 an ounce for the first time. Bitcoin is also pushing closer toward a record high. Gold has surged by more than 30% this year as investors have sought safe havens amid uncertainty over the USA’s presidential election and war in the Middle East.
Ditching non-dom tax regime will cost UK £6.5bn
The Adam Smith Institute (ASI) warns that abolishing the non-domiciled tax status in the UK could lead to a £6.5bn loss by 2035, resulting in the loss of 23,000 jobs over the next six years. The report highlights that over a quarter of the 21,100 wealthy non-doms may relocate abroad, costing the UK economy £600m annually by 2030 and £1.3bn by 2035. Maxwell Marlow, ASI’s research director, stated: “The Prime Minister says that wealth creation is the ‘number one priority of this government.’ He should therefore ditch his current plans for a non-dom raid that will cost the UK billions in lost revenue.” The ASI suggests an Italian-style flat fee on non-dom wealth could attract more investors and raise significant tax revenues.
China
China reported third-quarter GDP growth of 4.6% year on year, slightly exceeding the 4.5% expected by economists polled by Reuters. That’s less than the second-quarter growth of 4.7% year on year. On a quarterly basis, the third quarter saw 0.9% expansion, compared to 0.7% in the second quarter.
Boohoo
Boohoo says CEO John Lyttle intends to step down, and will support an orderly transition to a new successor. Separately, the fast fashion retailer announces a new £222 million debt financing facility, comprised of a GBP125 million revolving credit facility that runs to October 2026, and a £97 million term loan that is repayable by August 2025.
Netflix
Netflix is up more than 5% in pre-market trading after the company eclipsed Wall Street’s expectations on every major financial metric despite a new programming slate constrained by last year’s strikes in Hollywood. The results defied the skepticism of some analysts, who predicted that its growth would cool down.
The firm has added more than 45 million new members since last year and has 282 million subscribers globally.
Even without a boost from advertising, Netflix said revenue in the July-September period was up 15% compared with the same period last year, to more than $9.8bn (£7.5bn).
Netflix is starting to raise prices in some countries as growth spurred by its crackdown on password sharing starts to fade.
ECB
ECB has cut benchmark interest rates by 0.25% to 3.25% saying the decision was unanimous
Wealthy rush to gold amid tax fears
As wealthy households prepare for potential tax increases in the upcoming Budget, there has been a significant surge in gold coin sales, which are exempt from capital gains tax. The Royal Mint reported a staggering 118% increase in gold coin sales from July to September. The Chancellor’s plans to raise billions in taxes, particularly targeting the wealthiest, have prompted investors to seek tax-efficient options. Stuart O’Reilly from the Royal Mint noted: “Our data suggests investors are increasingly keen to protect their future investment gains, favouring capital gains tax-exempt investments such as bullion coins.” Meanwhile, sales of bullion bars, which are subject to capital gains tax, have declined by 11% year-on-year.
Landlords call for tax breaks amid market uncertainty
Private landlords are calling on the Government to provide tax breaks due to “market uncertainty” ahead of the upcoming Budget. In a letter to Chancellor Rachel Reeves, the National Residential Landlords Association (NRLA) and other representative bodies highlighted the “uncertainty on a number of fronts” that their members are facing. They urged a reconsideration of the taxation of the private rented sector, citing Paul Johnson from the Institute for Fiscal Studies (IFS), who noted that the current tax regime has “become increasingly penal”. Johnson stated: “One of the reasons that private rents have risen so much is that government policy has substantially increased tax payable by private landlords.” The letter also called for the abolition of the 3% stamp duty levy on rental properties and for the local housing allowance to be maintained at the 30th percentile during this Parliament.
Homebuyers count £2,500 cost of stamp duty change
Homebuyers are set to face an additional £2,500 in stamp duty as Rachel Reeves is preparing to announce the end of a £2bn discount in the upcoming budget. The Government will not extend the higher thresholds for stamp duty, which were increased by the Tories, leading to a significant rise in costs for buyers. The Resolution Foundation predicts a rush to complete property deals before the March deadline, but warns that this will deter future home moves. Adam Corlett, principal economist at the Resolution Foundation, said: “The Chancellor will need to announce significant tax rises… but there is one tax cut she should announce too – making permanent the increased threshold for paying stamp duty.” The changes will affect nearly 90% of purchases in England, with first-time buyers particularly impacted.
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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!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.