Business news 19 July 2024
Worldwide IT Outage. Labour’s workers’ rights revolution puts jobs at risk. Wages grow at slowest pace in two years. Consumer confidence, retail, pensions, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Worldwide IT Outage
A major IT outage is hitting industries around the world with airlines, banks and Media industries hit. The issue appears tied to a problem with Texas based cybersecurity company Crowdstrike. Over 1000 flights have been grounded and TV channels stopped from broadcasting live. Microsoft said they are taking mitigating action. Most GP surgeries have also been affected in the UK.
Labour’s workers’ rights revolution puts jobs at risk
Business leaders and opposition politicians have raised concerns about Labour’s workers’ rights package, arguing that it will likely increase burdens on business and make firms less likely to invest and less likely to hire. The new legislation, unveiled in Labour’s first legislative programme in 14 years, aims to provide employees with a range of rights from their first day of work, including work-from-home options, sick pay, and protection against unfair dismissal. The plan also includes banning exploitative zero-hours contracts and increasing the minimum wage for younger workers. But Tory business spokesman Kevin Hollinrake said the new rules “made clear that Labour’s union paymasters come before the British public.” Tina McKenzie, policy chair at the Federation of Small Businesses, added: “More than nine out of ten small employers say they are concerned about the prospect of increased costs and risks when they employ people, and there were no commitments within this to look after small employers who will struggle the most.”
Wages grow at slowest pace in two years
Wages grew at their slowest pace in two years, according to official figures from the Office for National Statistics (ONS). Average regular earnings dropped from 6% to 5.7% in the three months to May, while total pay, including bonuses, also fell from 5.9% to 5.7%. However, when accounting for the cost of living, real pay grew by 3.2%, the fastest pace since August 2021. The rate of UK unemployment remained unchanged at 4.4%. Liz McKeown, the ONS director of economic statistics, said: “We continue to see overall some signs of a cooling in the labour market, with the growth in the number of employees on the payroll weakening over the medium term and unemployment gradually increasing. Earnings growth in cash terms, while remaining relatively strong, is showing signs of slowing again. However, with inflation falling, in real terms it is at its highest rate in over two and a half years.” Jake Finney, economist at PwC, said: “The labour market is clearly cooling… but pay growth still remains elevated at 5.7%, way in excess of the circa 3% level that is considered to be consistent with the 2% inflation target. This still remains one of the largest potential barriers to an August rate cut.”
Consumer confidence sees subdued increase
Consumer confidence has seen a subdued increase, according to the latest figures from GfK’s Consumer Confidence Index. The index increased by one point to minus 13 in July. The major purchase index, which indicates confidence in buying big ticket items, saw a seven point uptick, potentially good news for retailers. However, confidence in personal finances looking ahead 12 months fell one point to positive three. Confidence in the UK’s wider economy over the next 12 months remained at minus 11. Joe Staton, client strategy director at GfK, noted that the UK general election result and England’s place in the Euro 2024 final had limited positive impact on consumer confidence. Linda Ellett, UK head of consumer, retail and leisure for KPMG, said: “KPMG research shows that four in 10 people say they’ve cut their non-essential spend further in 2024, leaving as many people feeling less confident about their financial security as the year has progressed as those who are feeling more confident.”
Retail
UK Retail Sales fell by more than expected in June, official data showed on Friday, partially reversing May’s jump. According to the Office for National Statistics, retail sales volumes fell 1.2% last month, compared to a 2.9% rise in May. Most analysts had pencilled in a far smaller decline, of around 0.4%. The ONS said that with the exception of petrol stations, sales had fallen across all the main shop types during the month.
Markets
The London market was mostly positive on Thursday as Investors reacted to early economic data, showing UK unemployment figures which were broadly in-line with expectations. The FTSE 100 closed up 0.21% yesterday at 8104.89 and the Euro Stoxx 50 closed down 0.44% at 4870.12. Overnight in the US, despite optimism over Fed policy easing, the risk mood remains low and the S&P 500 fell 0.78% to 5544.59 and the NASDAQ fell 0.70% to 17871.22.
This morning on currencies, the pound is currently worth $1.291 and €1.187. On Commodities, Oil (Brent) is at $85.1 & Gold is at $2415. With stock markets, the FTSE 100 is down 0.36% at 8176 and the Eurostoxx 50 is down 0.37% at 4852.
ECB
The European Central Bank left interest rates unchanged in a unanimous vote on Thursday following June’s landmark cut, as it described the potential for a September cut as “wide open.” “Monetary policy is keeping financing conditions restrictive. At the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year,” the ECB’s Governing Council said in a statement.
Netflix
Netflix added 8 million users and revenues rose to $9.6 billion in the second quarter (an increase of 17%) as Baby Reinderr and Bridgerton attracted new subscribers. Netflix said it expects Q3 revenue of $9.73 billion, below the $9.83 billion expected by Wall Street analysts. It expects paid net subscriber additions will be less than the year-ago quarter, which had the first full quarter impact from paid sharing.Earnings per share are forecast to be $5.10, ahead of estimates of $4.70.
UK workers could be owed billions in overpaid taxes
An estimated total of £5.8bn was overpaid to HMRC, according to research from Canada Life, with almost a third of UK adults finding they’ve been on the wrong tax code at some point. The research shows that 75% of those people paid an average of £689 more than they should have. It’s important to check if you’re on the correct tax code, as being on the wrong one could mean you’re paying too much each month. The Mirror’s Levi Winchester urges readers who suspect they may have overpaid to contact HMRC to investigate and potentially claim back up to four additional years of overpaid tax.
Reeves says she will ‘level’ with the public about challenges
Rachel Reeves, the Chancellor, has warned that she will have to make difficult decisions to fix the foundations of the public finances. She is set to announce the date of her first budget and assess the spending inheritance left behind by the Conservatives. In an interview with Bloomberg TV on Thursday, Reeves said: “We’re going to have to make difficult decisions. We need to fix the foundations before we can start rebuilding things in Britain. But unlike the previous government, I am going to be honest about the scale of the challenge. I’m going to level with people.”
Chancellor under pressure over IHT on pensions
Rachel Reeves is facing increasing pressure to impose inheritance tax (IHT) on pensions. An influential think tank, the Institute for Fiscal Studies (IFS), has joined the chorus of voices urging the Chancellor to act. Currently, pensioners can pass on their unused pensions to loved ones after they die, free of IHT. However, the IFS argues that this tax break is “perverse” and should be abolished. Charging IHT on pensions could bring in £200m in the first year and up to £2bn over time. The IFS economist, David Sturrock, believes that pensions should be used for retirement funding, not as an IHT planning tool. If Reeves acts on the IFS’s demands, it could have a significant impact on pensioners and their families.
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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 last one was particularly deadly for suppliers fand we are still seeing elevated insolvencies as businesses struggle.
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.