Business News 19th September 2017

CPA hopes to inform, with its daily bite-size business news on Tuesday 19th September 2017, filled with stories we think will interest Business people.

Markets Round up

Sterling remained above $1.35 holding onto the bulk of the gains made last week on the back of hints from the Bank of England that interest rates could be lifted in November 2017.

UK equities enjoyed an improved session after a strong start on Wall Street. The FTSE 100 rose 0.5% to 7253.3 and the FTSE 250 rose 0.3% to 19,437.9. The recent near 400 point sell off has encouraged buyers at these levels. In Europe the Euro stoxx 50 climbed 0.3% to 3526.74. U.S. stocks closed higher with the S&P500 up 0.2% to 2503.90 as investors looked ahead to a key Federal Reserve meeting. Wall Street also cheered a big defense industry deal. Japan was a bright spot in global markets with the Nikkei rising almost 2% to 20299, coming off a holiday a day earlier, as stocks elsewhere in the Asia-Pacific region were muted.

Oil prices pulled back, as traders weighed prospects for an extension to the OPEC-led production cut despite OPEC producers Saudi Arabia and Iraq pointing to a reduction in supplies in line with efforts to tighten the market and prop up prices. WTi is at $50.24 and Brent is at $55.74. Gold prices fell to $1309, holding ground at the lowest levels in more than two weeks as the global market’s risk appetite remained robust and market focus switched to a two-day Federal Reserve meeting that kicked off yesterday.

There was some profit taking as the pound gave up a small amount of it recent strength with the pound at 1.127 euros and 1.352 US dollars. Strategists are revising pound estimates after the currency’s best week since 2009 saw it gain almost 3% as the BOE signaled it would look to reduce stimulus in “coming months.” Sterling is holding around $1.35, while the median forecasts for the end of the fourth quarter  still lag behind at $1.29.


Theresa May called a special cabinet meeting for Thursday, the Times of London reported, without attribution. The PM hopes to bind Boris Johnson to her Brexit vision before a key speech in Italy on Friday. It may be too late: The Foreign Secretary openly discussed leaving office during a TV interview in New York.

Funding for SMEs easier to secure, say brokers

United Trust Bank’s latest broker sentiment poll reveals that 53% of brokers working in the asset finance sector believe it has become easier to secure funding for SMEs over the last year. Some 42% of brokers felt that there had been no change to the availability of funding for SMEs, whilst 5% felt it had become harder to secure the funding SMEs needed. Martin Nixon, head of asset finance at United Trust Bank, commented: “Despite the uncertainty surrounding the effect Brexit might have on UK businesses, there’s still considerable demand from SMEs for asset finance and plenty of appetite to lend from most funders”.

Small firms dreaming of affordable space

The FSB has warned that finding affordable commercial space is “fast becoming a pipe dream” for many of its members. A survey of 100 firms found they were spending 30% of turnover on rent and rates – up from 20% in 2016 – and more than half said they did not expect to be in the same premises in five years’ time. The poll also revealed nine in 10 businesses had yet to be contacted by town halls about rate relief schemes.

FCA urges action over household debt

Andrew Bailey, chief executive of the Financial Conduct Authority, has warned that the government needs to step in to help tackle Britain’s mountain of consumer debt. He voiced concerns about the sheer number of people who need loans to make ends meet, pinpointing gig economy workers as being in special need of credit to smooth their incomes. The debt charity StepChange said the percentage of its clients falling behind on payments went over 40% in the first half of 2017, while the average debt of the people it helps has risen to £14,367 in the first half of the year.

Brexit & Inflation

Brexit will be inflationary in the short-term, the head of the Bank of England said as he reiterated the Monetary Policy Committee’s recently adopted stance that some withdrawal of accommodation is likely to be appropriate over the coming months. Speaking at the International Monetary Fund, in Washington DC, BoE Governor Mark Carney said the process of exiting the European Union was likely to result in increased costs as the inbound supply chains from the EU were disrupted. Heightened tariffs on UK imports would add further to costs and developments in the labour market might reinforce those developments, he said

Eurozone inflation

Eurozone inflation climbed to a four-month high in August, as initially estimated, final data from Eurostat showed. Consumer prices advanced 1.5% year-on-year in August, faster than the 1.3% increase seen in July. This was the highest since April and in line with the estimate published on 31st August.

Emmanuel Macron to push euro plan

Emmanuel Macron is planning to barge in on German coalition talks next week by detailing ambitious reforms for the eurozone, in an attempt to force Berlin to shift ground on its approach to the single currency. The French president intends to flesh out proposals for buttressing the euro — including a separate budget, a finance ministry and a European Monetary Fund — in the immediate aftermath of Sunday’s election in Germany. He hopes to fuel public debate and force Angela Merkel and other German party leaders to take a stand on the plan during negotiations on forming the next federal government, aides said.


Canada’s free trade deal with the European Union will form the basis for the post-Brexit economic relationship between Canada and Britain, UK Prime Minister Theresa May and Canadian Prime Minister Justin Trudeau said Monday. The two leaders also vowed to join forces in a fight to get aerospace giant Boeing to drop its trade complaint against Montreal-based Bombardier, which has a manufacturing operation in Northern Ireland.

10,000 UK finance jobs affected in Brexit’s first wave

A survey by Reuters of firms employing the bulk of workers in international finance, has suggested that 10,000 finance jobs will be shifted out of Britain or created overseas in the next five years if the UK is denied access to Europe’s single market. The survey also suggests some financial institutions may be delaying decisions, hoping a soft Brexit can be negotiated in talks currently going on in Brussels. Andrew Gray, global head of Brexit for financial services at PwC, said: “They would like to think there is going to be a mutually easy way of dealing with financial services across the EU-UK border”.

Want to become a billionaire? Study engineering

A study by the recruitment agency Aaron Wallis indicates that students who study engineering or business at university are more likely than their peers to become billionaires. The research found that 75 of the world’s 100 richest people have earned a degree, and of these 75, 22 studied a degree in engineering. Aaron Wallis also found that the most common first job among the top billionaires – not including entrepreneurs who started their own company or those employed in a family business – was that of a salesperson.


Equifax learned about a major breach of its computer systems in March, almost five months before it told the public, people familiar said. While the credit-reporting agency said the March breach wasn’t related to the hack that exposed data on 143 million U.S. consumers, one of the people said the breaches involved the same intruders. Separately, the U.S. Justice Department opened a criminal investigation into a series of unusual stock sales by Equifax execs, people familiar said.

electric roads

A future where roads generate electricity isn’t too far-fetched. Researchers are looking at advanced materials such as piezoelectric ceramics that, when embedded in road surfaces, would convert vehicle vibration into electrical energy. Engineers at Lancaster University propose drawing on the stored energy to power street lamps. A surface that handles 2,000 to 3,000 cars an hour could run up to 4,000 street lights.

Toys R Us

Toys “R” Us filed for bankruptcy. America’s largest toy chain has struggled since a buyout loaded it with debt more than a decade ago. The company will also seek protection in Canada, it said. Operations outside North America aren’t included in the proceedings. JPMorgan was among lenders involved in providing financing of $3 billion, according to a press release.

North Korea

The chairman of the U.S. Senate’s East Asia subcommittee is asking China and 20 other nations on Monday to clamp down on North Korea by cutting ties, closing down diplomatic facilities and working to oust the country from the United Nations. As North Korea has defied U.N. Security resolutions to conduct nuclear and ballistic missile tests, Washington has been scrambling for an effective response. Many of President Donald Trump’s fellow Republicans have been calling for tougher action, imposed more quickly, including calling for stiff “secondary” sanctions and other punishments for companies, banks and countries that do business with North Korea. The North Korean nuclear issue must be resolved peacefully, Chinese Foreign Minister Wang Yi told his Russian counterpart during a meeting at the United Nations, China’s Foreign Ministry said on Tuesday.The United States and South Korea, and separately Russia together with China, started military drills on Wednesday in a show of force against North Korea, which has repeatedly defied the United Nations to conduct nuclear and ballistic missile tests. Wang said in a meeting with Russian counterpart Sergei Lavrov on Monday that China would strictly implement U.N. Security council sanctions and stressed that “parties directly involved” must also take action and responsibility. The US military staged bombing drills with South Korea over the Korean peninsula and Russia and China began naval exercises ahead of the UN General Assembly meeting yesterday. The flurry of military drills came after Pyongyang fired another ballistic missile over Japan on Friday. The joint drills were being conducted “two to three times a month these days”, Defence Minister Song Young-moo told a parliamentary hearing on Monday.

Trump v United Nations

President Donald Trump criticised the United Nations for bloated bureaucracy and mismanagement on his first visit on Monday to UN headquarters, calling for “truly bold reforms” so it could be a greater force for world peace. “In recent years the United Nations has not reached its full potential because of bureaucracy and mismanagement, while the United Nations on a regular budget has increased by 140 percent and its staff has more than doubled since 2000,” Trump said. “The United Nations must hold every level of management accountable, protect whistleblowers and focus on results rather than on process,” Trump said.

No corporate tax change for Ireland

Taoiseach Leo Varadkar has said there will be no change to Ireland’s corporation tax regime, despite European Commission President Jean-Claude Juncker saying that he and other officials were seeking to agree an EU-wide corporate tax rate.

Trump Says World Will ‘See Very Soon’ If U.S. Stays in Iran Deal

President Donald Trump said Monday the world will “‘see very soon” whether the U.S. withdraws from the Iranian nuclear deal. Trump planned to focus on the agreement between Iran and world powers during a meeting Monday with Israeli Prime Minister Benjamin Netanyahu in New York on the sidelines of the United Nations annual General Assembly session, U.S. National Security Adviser H.R. McMaster told reporters in advance. Trump faces an Oct. 15 deadline to inform Congress whether the U.S. will continue to certify Iran’s compliance with the international accord.

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