Business news 19 July 2022
James Salmon, Operations Director.
Heat wave hits. Insolvencies. Unemployment. Russian Gas. Apple, Household spending to fall. Interest rates to rise. And more business news.
Heat wave hits
After hitting 38C yesterday, the country is preparing for a record breaking 42C today – We hope you and your teams stay safe.
Insolvencies
Begbies Traynor – the largest insolvency practioner in the UK have said they expect rising insolvencies in the next few months as they released their forecasts to the city.
Unemployment
UK Unemployment shrunk in June, according to the latest statistics, as the country’s workforce hit a record high number over the past month. Some 31,000 more people are now on payroll, the Office for National Statistics found, to a record 29.6m.
Russian Gas
Gazprom has said they can’t guarantee gas supplies because of extraordinary circumstances, backing dating a declaration of force majeure to 14th June. Many are concerned that Nordstream 1, currently offline for “maintenance” is not coming back on, anytime soon.
Apple
US markets were spooked yesterday after Apple announced it was going to slow its hiring and spending growth as it anticipated an economic downturn.
Household spending could fall by £25bn
A study by Grant Thornton and consultants Retail Economics suggests households could cut non-essential spending by £25bn, with almost nine in 10 people intending to cut back.
The report says the typical household is to cut discretionary spending by £887 between now and next April.
Retail Economics chief executive Richard Lim said: “Faced with rapid inflation, rising interest rates and higher taxes, household finances are being tested from all angles.”
Policymaker says interest rates could hit 2%
Bank of England policymaker Michael Saunders says interest rates may have to rise to 2% or higher in the next year to prevent high inflation becoming embedded.
In a speech at the Resolution Foundation think-tank, he said increases “still have some way to go” in order to get inflation under control, adding that the risks of not raising rates steeply and quickly outweighed those of being too cautious. Mr Saunders, an outgoing member of the Monetary Policy Committee, said the committee “has to balance the risks and costs of tightening ‘too much, too soon’ versus ‘too little, too late’.” He added: “In my view, the cost of the second outcome – not tightening promptly enough – would be relatively high at present.” Inflation is currently at 9.1% and is expected to pass 11% later in the year. The Bank has increased rates to 1.25% from 0.1% since December.
Pro-Brexit regions more dependent on EU for exports
Brexit-supporting regions in the UK are becoming increasingly dependent on the EU for their manufacturing exports, according to a report by the trade body Make UK. Analysis of 2021 data by BDO shows that 49% of British exports go to the EU. Some of the UK regions that voted for Brexit have registered the biggest increases in the share of their manufacturing exports to the bloc. Wales saw the figure increase from 58% to 60% between 2020 and 2021, north-east England reported a rise from 56% to 58%, the east Midlands was up from 48% to 51% and the east of England rose from 46% to 48%. The analysis shows that Wales is second most reliant on the EU for exports of goods overall, followed by north-east England and Yorkshire and Humber. Richard Austin of BDO said that while manufacturing businesses “have done a good job in adapting to new post-Brexit rules for trading with the EU,” continued Government support may well be required, “particularly for firms at the smaller end of the spectrum.”
House prices hit record high of £369,968
The average house price in the UK rose 0.4% to a record high of £369,968 in July, according to Rightmove’s house price index. Rightmove said the £1,354 increase was driven by “a continuing desire to move and low numbers of homes for sale.” Year-on-year, prices have risen 9.3%, with high demand and low supply pushing up prices. Analysis by the property portal shows that first-time buyers are facing a 20% rise in mortgage payments, with typical repayments for those getting onto the property ladder set to be £163 higher than at the start of the year due to higher property prices and rising interest rates. Rightmove expects the average house price to have grown 7% by the end of 2022, up from its forecast of 5% at the start of the year.
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 charge our members a fixed annual subscription irrespective of how high the debt value is!
It takes less than 17 minutes to see how you would benefit, do you have the time now?
No face-to-face meeting required – 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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.