Business News 1st September 2017

CPA hopes to inform, with its daily bite-size business news on Friday 1st September 2017, filled with stories we think will interest Business people.

Markets Round up

Markets were in positive territory for the second day running yesterday as the FTSe 100 rose 65.4 points (0.9%) to 7430.6 and the FTSE 250 rose 1% or 187 points to 19,803.6. In Europe the Euro Stoxx 50 was up 0.5% to 3421.5 and the 600 was up 0.8% to 372.4 as indexes rose across the continent. Investors seemed unaffected by the tumult on the Korean peninsula. Miners particularly rallied on the positive manufacturing data that came out of China and drove up commodity prices. US stocks climbed higher on positive data flows as anticipation grew of the August US jobs report. The S&P 500 was up 0.6% to 2471.6 and the Nasdaq was up .95% to 6428.7. In Asia volumes were low but broadly up as the Japanese Nikkei climbed 0.2% to 19691, The Hang Sang was flat at 27953, The chinese CSI 300 climbed 0.2% to 3831, the Korean Kospi fell 0.2% to 2358, The australian index climbed 0.2% to 5725 and the Indian Nifty was up 0.5% at 9968.

The MSCI World index is up over the last 24 hours 0.6% to 1959.7.

The US Dollar lost some momentum as markets await the employment data from US. Non-farm payroll report which is expected to show 180k growth in August while the unemployment rate is expected to stick at 4.3%. The pound is up 0.1% against the dollar to 1.2915 and flat against the Euro at 1.086.

Oil prices fell, partly reversing sharp gains from the previous session, with WTI at $46.8 and Brent at $52.4 amid ongoing turmoil in the oil industry with nearly a quarter of U.S. refining capacity offline.

Gold prices have inched up to $1318.4 despite mild profit-taking  as investors awaited U.S. jobs data for direction on interest rates.


The dispute over the Brexit divorce bill has dominated the latest round of talks between the UK and the European Union, with both sides in the Brussels negotiations voicing their frustrations. Brexit Secretary David Davis said there had been a “tough” discussion over the fee Brussels wants the UK to pay to settle its obligations after British officials challenged the legal basis of the demand. Brussels’ chief negotiator Michel Barnier said there had been no “decisive progress” on key issues and the two sides were still “quite far” away from meeting the test of making sufficient progress for talks on future trading arrangements to begin. Barnier said it was clear the UK does not feel “legally obliged” to honour its “obligations” after leaving the bloc in March 2019.

If the U.K. expects the next German government to ease the terms of its departure from the European Union, it’s about to be disappointed. Chancellor Angela Merkel has repeatedly stressed that her priority is to maintain the unity of the other 27 EU states, and polls all show her on course to win a fourth term on Sept. 24, albeit at the head of a coalition. A study of the main party platforms shows that all of her prospective coalition partners are similarly disinclined to grant the U.K. any Brexit gifts. Merkel’s Christian Democratic Union-led bloc singles out the German fishing industry as a central interest to defend in exit talks, while her main challenger for the chancellery, Martin Schulz’s Social Democratic Party, warns against a “Europe a la carte” for the U.K.

Tax paid by non-doms tops £9bn

Figures from HMRC reveal there were 121,300 registered non-doms in the UK 2014-15. Together they paid a total of £9.3bn in income, NI and capital gains taxes. In total, 85,400 of the registered non-doms were UK residents in 2014-15, meaning that on average they each paid about £105,000 to HMRC. Non-doms based in London and the southeast contributed 86% of all the tax paid by these people, according to the data.

Income tax payments up

The Treasury collected £148.8bn in income tax in the 2016-17 tax year. The figure – up 5.3% on the year before – was driven by a rise in tax payments via self-assessment, which jumped by 17%, or £4.2bn.

MPC policymaker urges higher interest rates

Michael Saunders, a key member of the Bank of England’s Monetary Policy Committee, has said a modest rise in interest rates is needed to curb high inflation. In a speech in Cardiff, he said it would help ensure a sustainable return of inflation to target over time “as the Brexit process might be bumpy”.

Household spending power creeps up

Household spending power has risen – albeit only slightly – for the first time in four months, according to Asda’s income tracker. The index showed households had £1 more to spend in July compared with the same month last year

Nurseries on the brink

A study by the Pre-school Learning Alliance shows that 38% of nurseries expect to be driven out of business within a year. Those surveyed cited financial pressures, including the strain of the government’s new childcare scheme and higher business rates.

Euro Inflation

The inflation rate in the eurozone rose to a higher-than-expected 1.5% in August, according to Eurostat, the European Union’s statistics office. The preliminary estimate for the month was up from July’s rate of 1.3%. Inflation in the 19-nation bloc remains well below the European Central Bank’s target of close to, but below, 2%. Separately, the unemployment rate in the eurozone was unchanged at 9.1% in July, its lowest since February 2009, also according to Eurostat.

Pension gap growing

Paul Johnson, director of the IFS, says that the difference pension provision between the public and private sectors has grown dramatically in recent years, as more private sector organisations close their defined benefit pension schemes. His comments come after it emerged that dozens of senior civil servants have amassed pension packages worth more than £1m. Meanwhile, the latest PwC Skyval Index has found that the deficit in defined benefit funds grew by 10% to £460bn month-on-month in August.

Investments in cash Isas fall by a third

The amount of money put into cash Isas has fallen by a third year-on-year, as low interest rates and tax changes make them less attractive to savers. In the 2015-16 financial year, cash ISA holders paid £58.7bn into them. But in 2016-17, only £39.2bn of new money went in, according to latest figures from HMRC.

Rents rising as buy-to let investors tackle higher tax

According to research by Your Move, the average rent in England and Wales has risen by £75 since January, which could signal the first response from landlords to tax increases.

Chinese Manufacturers

China’s manufacturing activity expanded at a faster pace in August on new orders, survey results from IHS Markit showed Friday. The Caixin Purchasing Managers’ Index rose to 51.6 in August from 51.1 in July. The score was forecast to drop to 51.0. The manufacturing sector has strengthened in each of the past three months, with the latest upturn the strongest since February. New work placed at manufacturers increased at the fastest pace seen for 37 months. A broad-based upturn in foreign demand was cited as a key driver of new order growth.
Sustained growth in new orders led firms to expand their production schedules again in August. Furthermore, the rate of growth was little changed from July’s five-month high.

US Oil

The havoc wrought by tropical storm Harvey began to spread well beyond the Houston area on Thursday as the damage to the US’s energy infrastructure sent the price of gasoline sharply higher and forced Washington to step in to prevent fuel shortages. Almost a week after the storm first made landfall in Texas, almost a third of US oil refineries — many of which are clustered on the US Gulf Coast — have been affected by the storm, and refineries still in operation in the region are struggling to import crude because of outages at port facilities. As fears of cholera and typhoid increased in flooded parts of Texas, medical officials alerted the public over the dangers from contaminated water.


The Trump administration and top congressional Republicans intend to release a more detailed tax plan in the next few weeks, Treasury Secretary Steven Mnuchin said in an interview with The Wall Street Journal on Thursday. Although congressional committees will write the tax bill, Mr. Mnuchin indicated that the administration intends to stay engaged in the debate and stick to its goal of overhauling the tax code this year. “In no way are we just turning this over to Congress,” he said, pushing back on published reports that the administration was ceding the next phase of work to legislators.

President Donald Trump is considering attaching an increase in the U.S. debt limit to an initial $5.95 billion disaster aid funding request for Hurricane Harvey, two administration officials said, a move aimed at lowering the risk of an unprecedented default The White House request, which could come as soon as Friday, would include $5.5 billion to the Federal Emergency Management Agency and the remainder to the Small Business Administration.


Prime Minister Viktor Orban will ask the EU to finance half the cost of Hungary’s border defence measures to keep out migrants, days before a court ruling on Hungary’s rejection of the bloc’s migrant quotas. Orban’s chief of staff, Janos Lazar, said Orban would write to European Commission President Jean-Claude Juncker on Thursday, asking the European Commission to contribute about 400 million euros. He said Hungary, its borders with Serbia and Croatia fortified with a fence, police and troops, “was protecting all the citizens of Europe from the flood of illegal migrants” and it was time the EU helped Hungary as it did Italy, Greece and Bulgaria.

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