Business News 19th July 2017
This is the hopefully enjoyable and informative, bite size business news compiled by the Credit Protection Association on Wednesday 19th July 2017 for its members and visitors.
Markets Round up
The FTSE 100 fell early on yesterday off the inflation announcement, only to recover back to 7390 down just 14 points (0.2%) on the day. The FTSE 250 however was up 0.5% to 19,613. Sterling fell 0.2% against the dollar to 1.3027 and fell 1% against the euro to 1.1256. The fall in inflation eased pressure on the Bank of England to raise rates in the near future. In the US, despite the collapse of Trumps healthcare bill casting further doubt on his ability to get any of his policies through, stocks were healthy supported by a weaker dollar, the S&P closed level at 2461. The Nasdaq rose 0.5% to 6344. European shares were down as the Euro rose against the dollar 0.8% to 1.157. Oil and Gold both climbed on the back of the weaker dollar with oil buoyed by a rise in US inventories. Asian stocks were mostly higher as attention turned to the central bank meetings in Japan and the EU
Late payments cost SMEs £2bn a year
Figures from debit debit operators BACs show SMEs are owed a total of £14bn by customers leaving them with a bill of more than £2bn ever year. SMEs are increasingly relying on overdrafts and 16% struggle to pay staff on time. The majority spend almost four hours a week chasing late payments, and 12% have to employ someone dedicated to pursuing outstanding payments. The research by BACS also shows one in five small businesses say being owed between £20,000 and £50,000 would be enough to drive them into bankruptcy while some 7% of businesses say they are already in that danger zone. However, the total figure owed is down on the £30.3bn figure recorded five years ago.
The Independent
Inflation
To the general surprise of most economists, the The UK’s inflation rate dropped unexpectedly to 2.6% in June, down from 2.9% in May, official figures have shown. It is the first fall in the rate since October 2016 and was largely down to lower petrol and diesel prices. Fuel prices fell for the fourth month in a row in June, according to the Office for National Statistics. Economists say the fall in inflation could ease pressure on the Bank of England to raise interest rates who may now view the recent high inflation as a blip caused by the fall in the pound rather than a continuing trend. Surprisingly, the prices of both materials going into factories and goods coming out are also lower than they were in May. The UK inflation rate has risen sharply since the referendum on membership of the European Union last June, partly due to an increase in the cost of imported goods following the fall in the value of the pound.
Rich-poor gap shrunk
A report from the IFS shows the gap between rich and poor across the UK is smaller now than a decade ago with the move driven by strong growth in employment in the capital and Conservative party tax cuts. Researchers found the net incomes of the top 1% of earners are around 10% below pre-recession levels, compared with a 5% fall among average earners while incomes of the bottom 10% have grown by nearly 8% and average earnings by 4% since 2007. The incomes of the top 10% fell slightly.
Daily Mail, Page: 8
Brexit
The Chancellor of the Exchequer, Philip Hammond has insisted that he is committed, like other cabinet ministers, to leaving the EU single market and customs union after Brexit, amid rumours of growing rifts in the ruling Conservative party. Hammond was pressed in parliament by a Conservative lawmaker to say whether he was “absolutely, personally and enthusiastically committed” to Prime Minister Theresa May’s Brexit plan. “Yes, I’ve made it clear on many occasions that when we leave the EU on March 29, 2019, we will also leave the single market and the customs union,” he said, following a cabinet meeting with May and other ministers earlier Tuesday. “Those are matters of legal necessity,” Hammond said. Officials quoted by the BBC and other media said May had called for “strength and unity” from her cabinet, stressing the need for confidentiality after apparent leaks in recent days. Elsewhere Theresa May is forming a new business council that will meet regularly to discuss Brexit. Business leaders from sectors most likely to face disruption from Britain’s exit from the EU will be invited to talks with senior ministers. Attendees are expected to include CEOs and directors from business such as BAE Systems, Jaguar Land Rover, and business groups including EEF, the IoD, the FSB and CBI.
House Prices
Growth in UK house prices has continued to slow, but the cost of the average home still increased by 4.7% in the year to May 2017. Figures from the Office for National Statistics (ONS) show a drop from the 5.3% rise in the year to April. The average UK house price stood at £221,000 in May, up £10,000 from the same month last year. The main contribution to the rise in house prices came from England, where prices jumped by 5%. The average price of a house in England is now £238,000, the ONS said, while a property in Wales costs £150,000 after a 3.8% increase in prices over the past 12 months. House prices in Scotland rose 3.5% to £143,000, while the average price of a Northern Ireland home stands at £124,000 after a 4.3% rise for the year to May. Zoopla also released figures. The average price of a UK home currently stands at £304,469 according to data released by Zoopla, an increase of £3,039 – or 1.1% – since the beginning of the year. This compares to a rise of £13,851 in the same period of 2016. The figures show the average price of a London home is £673,000, up from £670,000 on January 1. This means values in the capital have climbed just 0.5% this year, a rate short of the 3.5% growth recorded in the same period last year. Richard Snook, at PwC, said: “We anticipate a softening of the market, with house price inflation falling from 7% in 2016 to 3.7% in 2017”. Elsewhere, Howard Archer, at EY Item Club, said house prices look unlikely to rise by more than 2% over 2017 and are expected to be essentially flat over 2018.
Baby boomer business owners need to plan for retirement
The Times’ Alexandra Frean examines the problems facing baby boomer small business owners if they fail to put succession plans in place before their retirement. Ms Frean says owners risk being forced to sell their business too cheaply without adequate planning and about 400,000 companies with directors over the age of 60 can be expected to be wound up in the next five years as the owners retire and are unable to find a buyer for the business. Kirsty McGregor, of the Corporate Finance Network, warns the problem will get worse as the demographic bulge of 60-plus baby boomer business owners hit retirement, putting millions of jobs at risk.
The Times, Page: 41
New plastic £10 note unveiled
The new plastic £10 note has been unveiled by Bank of England governor Mark Carney. The note, which follows the polymer £5, will be issued on September 14 and has a portrait of Jane Austen on the 200th anniversary of the author’s death. It is also the first BoE note to include a tactile feature to help visually impaired people. Meanwhile, a limited supply of a new £2-coin honouring Jane Austen has been put into circulation by the Royal Mint.
Card fees to be banned from 2018
The government is to ban “rip off” card fees from next year. Organisations caught charging customers to use credit or debit cards will be ordered to repay the fees or face being fined. Government bodies such as the DVLA and HMRC will also be banned from imposing the surcharges.
Trump & Putin sitting in a tree….
US President Trump and Russian President Vladimir Putin held a second, previously undisclosed conversation during a dinner for G20 leaders at a summit earlier this month in Germany, a White House official confirmed yesterday. The White House official did not say how long the second meeting took place or what was discussed. The conversation took place during a dinner for the Group of 20 heads of state and their spouses in Hamburg, said Ian Bremmer, the president of political risk consultancy Eurasia Group, who was first to report the meeting. Bremmer said Trump got up from his seat halfway through dinner and spent about an hour talking “privately and animatedly” with Putin, “joined only by Putin’s own translator.”
Previous News pages
Business News 18th July 2017
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