Business news 18 December 2023
James Salmon, Operations Director.
Insolvencies up 21% in November. Private sector growth, Vacancies fall below a million, business tax, retail, planning permissions, consumer confidence & more business news that we thought would interest our members.
Insolvencies up 21% in November
Data from the Insolvency Service shows that insolvencies were up 21% year-on-year in November, hitting 2,466.
Nicky Fisher, president of insolvency and restructuring trade body R3, notes that November’s figure take the annual total for corporate insolvencies figures to the highest point since 2009.
Ms Fisher commented: “Since the spring of 2020, firms have had to contend with the pandemic, the end of the Government support measures, rising inflation, the cost of living crisis, and supply chain issues – with no time to draw breath or recover in between them.”
David Kelly, head of insolvency at PwC, said that the high number of insolvencies “is unfortunately no surprise” and that the year ahead was looking “precarious” for heavily-indebted companies.
Private sector growth hits six month high
Private sector output growth has reached a six-month high, according to the S&P Global/CIPS composite PMI covering services and manufacturing firms. December saw a reading of 51.7, with this up from the 50.7 recorded in November on an index where a figure above 50 indicates growth. The report showed a second consecutive month of expansion in the private sector, noting that higher levels of business activity were “supported by a renewed improvement in order books, alongside efforts to work through post-pandemic backlogs.”
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “The UK economy continues to dodge recession, with growth picking up some momentum at the end of the year to suggest that GDP stagnated over the fourth quarter as a whole.” CIPS chief economist Dr John Glen said a “revival in the services economy is helping the UK’s private sector end the year on a more positive note,” adding that overall growth was “underpinned by an upturn from the services economy.”
Vacancies fall below one million
The number of job openings in the UK has fallen below a million for the first time since May 2021, signalling concerns about the health of the economy. Vacancies decreased to 998,562 last month, down 2.7% from October and 8.6% on an annual basis, according to Adzuna, the job search engine. The decline in demand for workers is attributed to pessimism about the UK economy and higher interest rates, which have led to reduced consumer spending. Despite expectations of a rise in unemployment due to interest rate increases, joblessness has only slightly increased to 4.2%.
The job market is expected to remain soft in 2024, with falling vacancies and increased competition between workers. Advertised salaries have risen for the first time since June, reaching an average of £37,221. However, competition for roles is growing. Separate projections from KPMG indicated that the UK’s unemployment rate would climb to 4.9% by 2025 with the consultancy warning that broader economic growth was “vulnerable to shocks” in the coming years.
More than half of businesses expect tax liabilities to increase
More than half of businesses participating in a global survey are expecting their tax liabilities to increase in the coming year, according to a report by BDO. The survey, which polled over 600 senior tax professionals across nearly 50 countries, found that 52% predicted a rise in tax liabilities, while only 15% expected to owe less tax. The trend is attributed to high levels of government intervention during the Covid pandemic and economic shocks impacting public finances. In the UK, the headline rate of corporation tax increased from 19% to 25% in April 2023. Businesses are also anticipating complexities due to tax reforms from the Organisation for Economic Cooperation and Development (OECD) known as “pillar two” rules, set to be implemented in the UK from the end of 2023. Ross Robertson, international tax partner at BDO in the UK, stated that business taxes have risen across many international jurisdictions and this trend is expected to continue.
Stores cut prices to boost spending
Major stores are launching half-price sales in a bid to boost Christmas spending. With takings falling short of forecasts, retailers are offering huge discounts to attract bargain hunters. Analysts blame the cost of living squeeze for a predicted £3bn drop in festive spending this year. PwC predicts a 13% annual fall in spending on presents and festivities, from £23bn to £20bn. The expected outlay is £400 per head, £40 less than last year. PwC spokesperson Lisa Hooker believes there could be “deeper discounts as retailers clear seasonal stock.” Meanwhile, Paul Martin of KPMG said: “Price remains the main purchasing driver, so we are likely to see a prolonged and well-targeted period of discounting as retailers compete hard for a shrinking pool of spend and will need to clear stock.”
Retailers face tough year ahead
Retailers are expected to face a tough year ahead as weak consumer demand and increased costs, including the higher minimum wage, loom. The Retail Think Tank forecasts that shoppers will keep their spending on pause during the first months of 2024, as mortgage and rental costs weigh on consumer confidence. “It is going to get worse,” said Paul Martin, the UK head of retail at KPMG. While demand could pick up in the spring by then retailers are expected to face a financial squeeze as the April rise in the minimum wage and a 6.7% business rate increase for most retailers kick in. The thinktank suggests that consolidation through buyout deals and mergers will be on the cards.
Planning permissions for new homes hit record low
Planning permissions granted for new homes have fallen to a record low, with developers warning that supplies of new housing next year could drop to their lowest in a decade. The latest Housing Pipeline report from the Home Builders Federation (HBF) recorded the lowest 12-month rolling total since its survey began in 2006. The trade body warned that “an increasingly anti-development policy environment and worsening economy will see the number of homes built in the coming years fall to record low levels”. The report comes as communities secretary Michael Gove prepares to make a speech outlining ideas to speed up the planning system and push councils to draw up local housing plans.
Consumer confidence climbs
Consumers recorded an increase in optimism in December, with the GfK Consumer Confidence Index rising to -22 from -24 in November. All five components within the survey saw an increase, with the outlook for personal finances moving toward a positive reading. Joe Staton, client strategy director at GfK, reflected: “Recovery in this number is important as it best reflects household financial optimism and control over personal budgets.” He said that the “slow but persistent” movement towards positive territory in regard to personal finances “is an encouraging sign for the year to come.”
Is the BoE overplaying inflation threat?
Last Thursday the central bank held rates at 5.25% the third month in a row, raising hopes of a rate cut in the spring. Carsten Jung, senior economist at the Institute for Public Policy Research, warned that much of the impact of rate hikes has yet to feed into the economy, stating that “two thirds of the pain from their current levels is yet to come.” Some are concerned that the Bank will resist market expectations of a cut and keep rates up for longer than expected, damaging the economic recovery. However, PwC chief economist Barret Kupelian says: “Interest rates seem to have already turned a corner, with 10-year gilts already below the 4% mark. If this persists, mortgage rates could go down faster than anticipated.”
Aviva tells staff they can choose to work Christmas Day
Aviva has launched a six-month flexible bank holiday trial, allowing UK staff to work on Christmas Day and take another day off instead. The decision has sparked controversy, with one staff member accusing senior management of “killing Christmas”. However, the policy mirrors similar schemes at Deloitte, Grant Thornton, and Spotify. Only a few Aviva employees have requested to work on Christmas Day so far. The move comes amid concerns that traditions like Christmas are under threat, with some universities renaming the Christmas break as the “winter break”. Aviva’s policy aims to offer more flexibility to employees, a trend that is becoming increasingly popular as businesses compete for talent. The founder of Mind Gym, Octavius Black, believes that allowing people to work over the festive season is not what will “kill Christmas”, but rather companies banning the word Christmas itself. Aviva’s flexible bank holiday trial is voluntary and requires manager approval and sufficient work. Last week, Aviva’s CEO Amanda Blanc announced a drive to combat sexism in finance by requiring final sign-off for all senior white male recruits.
Pay gap at largest companies widens
The pay gap at the UK’s largest companies has widened, with the average pay differential between chief executives and median employees increasing in 2022. According to data from the High Pay Centre, the average pay gap at a FTSE 350 company was 57 to 1, up from 56 to 1 in 2021. The largest FTSE 100 companies had a pay gap of 80 to 1. Some 21% of FTSE 100 bosses earned 100 times more than their average employee. The figures indicate that the narrowing of the pay gap during the pandemic has not been sustained. Safestore, a storage firm, had the largest pay gap in the FTSE 350, with the CEO earning over 300 times the average worker’s pay. Tullow Oil, Jupiter Asset Management, and Kainos reported the smallest pay gaps. Luke Hildyard, director of the High Pay Centre, said the UK’s largest listed companies needed to create a “fairer, more equal, more inclusive economy where companies create lots of well-paid jobs for all their workers, rather than a handful of obscenely paid roles for those at the top”.
Investors ditch notion that interest rates will stay ‘higher for longer’
Market expectations that interest rates in the US and elsewhere will remain higher for longer have been shattered after last week’s rally in global bond markets, strategists say. Separately, data from the Office for National Statistics is expected on Wednesday to show inflation fell in November. Analysts at Citigroup predict that the rate of price growth in the UK economy dropped to 4.4% last month, down from 4.6% in October.
Latest Insolvencies
Appointment of Liquidator
EXPRESS MICROBIOLOGY LIMITED
H.A. FUNDING LIMITED
GIANT TOPCO LIMITED
FOO YUN LTD
VENICE BAKERY (UK) LIMITED
LAMOURA LIMITED
RUSUPO LTD
CARPENTUM DESIGN LIMITED
INTEGRATED COMPUTING & OFFICE NETWORKING LIMITED
CELLMEC LIMITED
SWAN NATIONAL LIMITED
UNDERSEA SENSE LIMITED
HOUSING ASSOCIATION FUNDING PLC
CLIFTON COURT PROPERTIES LIMITED
MIKE KIRK CONSULTING LTD
CAR CARE CENTRE (YORK) LTD.
LMN ASSOCIATES LIMITED
OSPREY HOLDINGS LIMITED
HILLS INVESTMENTS LIMITED
BLUE MOUNTAIN ADVISERS LIMITED
VPD HOLDINGS LTD
LOUNGE LOGIC LTD.
BNR LIMITED
FANS FARMING LTD
MARCON HOLDINGS LIMITED
ASSETFINANCE LIMITED
MOLO CONSULTING SERVICES LIMITED
PARKAR CONSULTANCY LIMITED
ELECO (DCS) LIMITED
BALCAIRN LTD
VALIDCROFT LIMITED
KENNEDY INDEPENDENT FINANCIAL ADVICE LTD
RENEWABLE ENERGY CENTRE LIMITED
B.SMITHS (THIRSK) LIMITED
FORTH VIEW ASSOCIATES LIMITED
BARTLEBY CONSULTING LTD
VIA INEXCITABILIS LIMITED
THE MILL FARM LTD
CARWELLAN LTD
RATHMORE INVESTMENTS LIMITED
MARK DAVIES HOLDINGS LIMITED
KARUS THERAPEUTICS LIMITED
LEAP GROUP LTD
GREENBRIDGE CAPITAL ADMINISTRATION LIMITED
C & H (WADEBRIDGE) LIMITED
DINEEN MANAGEMENT LIMITED
Appointment of Administrator
FANCY DRESS BALL LTD
F.G.FENNELL & COMPANY LIMITED
A GOMEZ LIMITED
LOWESTOFT ELECTRICAL CO. LIMITED
WALDORF SCHOOL (BRISTOL) LIMITED
CLEAR FACTOR LIMITED
SKY BUILDING NO 1 LTD
Winding Up Petitions
APPLEMONT LIMITED
KADIMA CONSTRUCTION LTD
BALROSSIE HOMES LIMITED
R J HOTELS LIMITED
WARLEY HOLDINGS LIMITED
NETHERCOMMON INDUSTRIAL SERVICES LIMITED
Winding Up Order Notices
S T INDIA LTD
NEW AGE DEVELOPMENT GROUP LTD
ARISTA DESIGN LTD
CORE CONSTRUCTION & GROUNDWORKS LIMITED
ELLINAS AUTO TRADE UK LTD
SOHAIL BAKHT LTD
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!
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.