Business News 18th July 2017
This is the hopefully enjoyable and informative, bite size business news compiled by the Credit Protection Association on Tuesday 18th July 2017 for its members and visitors.
Markets Round up
Yesterday the FTSE 100 climbed 26 points (0.35%) to 7404, on the back of oil & gas shares, mining shares and banks. Meanwhile the Eurostxx 50 fell 10 points (0.27%) to 3516. The US market was level overnight with S&P500 at 2459 and Nasdaq at 6314. The MSCI world index is overall level at 1948. The dollar continues to weaken falling to 1.311 against the pound and 1.1525 against the Euro. Oil fell just over 1% while gold rose half a percent to $1236. The pound fell 0.5% against the Euro to €1.1368. The US continues to suffer as the doubts over the US healthcare bill grow and therefore confidence in the Trump administrations ability to get through financial reform falter too.
Breaking News – Inflation
Inflation figures for the UK came in. The Retail Price Index (RPI) rose 3.5% year on year compared with 3.7% last month and against expectations of 3.6%. The Consumer Price Index (CPI) rose 2.6% year on year compared with 2.9% last month and against expectations of 2.9%
Bank of England
The Bank of England Governor, Mark Carney has said interest rate benchmarks (LIBOR) should move towards being based on real market transactions, as opposed to submissions from banks. Minutes of a BoE round table on reference rates feature Carney saying a situation where, “a judgment-based benchmark underpinned an estimated $350trn-worth of contracts was not desirable”. The commonly-used London Interbank Offered Rate (LIBOR) was the subject of a rigging scandal which saw banks fined billions and the UK banking industry body previously responsible for setting the rate stripped of its powers. The benchmark is currently run by an independent firm regulated by the Financial Conduct Authority (FCA).
HMRC collects £4bn from APNs
HMRC reports that it has now collected in excess of £4bn through accelerated payment notices (APNs) under the ‘pay now, dispute later’ rules. More than 75,000 APNs have been issued to people under enquiry for tax avoidance since rules were introduced in 2014. However, Tim Stovold, head of tax at Kingston Smith, points out that HMRC has also made errors. He says that during 2016 to 2017, the Revenue received 40,000 representations, considered 32,000 and upheld 90% of these – although 20% of those considered resulted in a reduction of the amount being assessed. “The scale at which APNs have been issued over the last few years inevitably means that calculation and procedural errors were made by HMRC,” he adds. HMRC has also reported that supply and demand for tax avoidance schemes is falling, with the number of new schemes notified in 2015-16 under the DOTAS regime falling by 99% on 2005-06, from 600 to seven.
FT Adviser
Majority of businesses have no Brexit plans
A survey by the ICAEW has found less than a third of British businesses have made plans for the UK’s departure from the EU. The poll of 500 business leaders showed that Just 29% of UK companies had made any Brexit plans, and less than half had even thought about the opportunities or risks presented by the UK’s departure from the bloc. Michael Izza, chief executive of the ICAEW, warned that the prospect of entrepreneurs seeking new markets would become little more than a “pipe dream” unless policy makers did more to support them. The Times’ Alistair Osborne notes that just 8% of respondents to the ICAEW’s survey strongly agree that “EU regulations are a major burden to the growth of your organisation.”
The Daily Telegraph The Times, Page: 45
Advertising Standards to get tough.
The Advertising Standards Authority has reviewed its approach to ads that feature stereotypical gender roles. It concluded that ads that mock people for not conforming to gender types or reinforce gender roles had “costs for individuals, the economy and society”. As a result new rules will be drawn up. The Advertising Standards Authority (ASA) said it had decided to conduct a review following the public’s reaction to the “beach body ready” advertising campaign in 2015 which prompted a wave of complaints for showing a bikini clad model in an advertisement for a slimming product, which critics said was socially irresponsible.
BBC News
Business bank facing funds gap
Employers’ groups are calling on the government to strengthen the role of the British Business Bank to ease SMEs through any post-Brexit downturn and protect entrepreneurs’ funding. In its annual report, published today, the BBB warns: “Although most of our programmes are unaffected, a number do include European funds and guarantees and may require evaluation and adjustment.” Among the groups calling for the government to step in to replace any lost European funds is the FSB, whose chairman Mike Cherry warned of a “cliff-edge moment” if the BBB is unable to replicate the support for small business finance markets provided by European funds. In its accounts for the year to March 31, the business bank said that it was achieving its aim of increasing the supply of capital to SMEs, with the total stock of finance provided through its programmes growing by 24% to £9.2bn.
The Times, Page: 55
PwC predicts slowdown
PwC has predicted that record levels of employment will fail to prevent the economy’s growth rate slowing this year and next. The firm expects measures in the autumn Budget to help offset weaker household spending and delayed investment by firms anxious about Brexit. But it said growth was still likely to dip from 1.8% in 2016 to 1.5% this year and to 1.4% in 2018. PwC also expects house prices to rise by 3.7% this year, making the average British home worth £220,000 by the end of 2017. Meanwhile, IHS Markit has warned that political uncertainty and the consumer spending slowdown have hit UK business confidence. It said the “net balance” of UK firms expecting a rise in business activity over the next 12 months stood at +35% in June, the lowest reading since October 2011.
The Guardian, Page: 19
Brexit
The team of 98 British officials will be back to technical talks today, covering issues such as citizens’ rights, financial obligations, nuclear energy cooperation and what to do about U.K. and EU goods placed on the market before Brexit day. “We recognize that this will be a complicated and technical process and we look forward to coming back tomorrow to make progress on the work we have begun today,” a spokesman for the Department for Exiting the EU said at the end of Monday’s talks. The EU has made much of the early running by forging common positions on the issues up for debate, as well as forcing the U.K.to discuss divorce matters before moving on to a future trade arrangement. Davis, who tacitly acknowledged that the first round of talks last month had achieved little, is also now echoing Barnier’s line that the time left to get a deal is slipping away and common ground must be found swiftly.
Netflix
Shares in the online streaming service Netflix have jumped to an all time high in the wake of strong subscriber growth this year, with 5.2m new users coming on to the platform in the three months to June. The surge pushed Netflix’s total number of users to 104 million, significantly more than the company had been expecting, and in turn this caused shares to leap by over 10% in after-hours trading.
Cambridge is fastest-growing city economy
Cambridge has been named as the UK’s fastest-growing city economy, with the city’s technology sector propelling it ahead of Milton Keynes. Its skilled workforce contributed to growth of 2.9% in the year to March, a study by the CEBR and the law firm Irwin Mitchell found. Cambridge boasts more patent publications than any other and 80% of its start-ups are still in business after three years.
The Times, Page: 45
Previous News pages
Business News 17th July 2017
Business News 14th July 2017
Business News 13th July 2017
Business News 12th July 2017
Business News 11th July 2017
Business News 10th July 2017
Business News 7th July 2017
Business News 6th July 2017
Business News 5th July 2017
Business News 4th July 2017
Business News 3rd July 2017