Business news 20 February 2025
Inflation, small business job cuts, consumer confidence, tax, digital wallets, warehouse seizures, house prices, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Inflation jumps to 10-month high
UK inflation surged to 3% in January, up from 2.5% in December, marking the highest level since March last year. Contributing factors included rising plane fares, food costs, and a significant increase in private school fees, which rose by 12.7% year-on-year. Analysts had anticipated a lower rate of around 2.8%. Ruth Gregory, economist at Capital Economics, said: “We doubt this will prevent the Bank of England from cutting interest rates further, but it will mean it continues to cut rates only slowly.” The Bank of England is under pressure to manage inflation while considering interest rate cuts, with current rates at 4.5%. Treasury minister James Murray acknowledged that the path to the 2% inflation target would be “bumpy.” Inflation is expected to rise further, with predictions of a peak at 3.7% in late summer.
Small businesses brace for job cuts
A recent poll by the Federation of Small Businesses (FSB) indicates that 33% of small businesses plan to reduce their workforce due to rising staff costs and new employment rights. This figure has increased from 17% in the previous quarter. Additionally, a separate survey revealed that 67% of small firms intend to limit hiring in light of the forthcoming Employment Rights Bill, with 32% planning to cut jobs before the new regulations take effect. Tina McKenzie, FSB’s policy chair, said: “The figures speak for themselves – plans to allow employees to sue their employers on their first day on the job will wreak havoc on our already fragile economy.”
Consumer Confidence
UK consumer confidence sank to the lowest level since Labour came to power, the British Retail Consortium said. Half of those surveyed expect the economy to worsen over the next three months.
Labour shows us the Laffer curve in real time
Economist Matthew Kilcoyne highlights the detrimental impact of Labour’s planned National Insurance increase on the UK economy in City AM. The latest CIPD survey reveals that a third of British firms are considering job cuts or hiring freezes, with nearly half planning to raise prices. Kilcoyne says this is “a textbook demonstration of how tax policy destroys the very economic activity it seeks to tax. It’s the Laffer curve stepping out of theory and into reality, and it’s happening right before our eyes.”
Surge in digital wallet use, CMA to probe competition
The use of digital wallets in the UK has seen a significant increase, with the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) reporting that the share of card transactions made via digital wallets has surged from 8% in 2019 to 29% in 2023. In 2023, approximately 20% of card users used a digital wallet for over 50% of their card transactions, while around 10% used one for over 75% of their transactions. While digital wallets offer enhanced security and convenience, concerns remain regarding competition among providers and the potential impact on the financial system’s resilience. The regulators are collaborating with the Competition and Markets Authority (CMA) and the Treasury to address these issues as part of a review of the Payment Services and Electronic Money Regulations.
HMRC makes 15,000 warehouse seizures
HMRC has seized nearly 15,000 imported items from delivery warehouses across the UK. The items were removed from 25 different sites during a three-day operation targeting counterfeit, misdescribed or undervalued goods. Marc Gill, Director, Individuals & Small Business Compliance at HMRC, said: “We’re determined to create a level playing field to allow honest businesses to thrive and will take robust action to make sure that everyone pays the correct duty due for importing goods into the UK.”
Markets
Yesterday, the FTSE 100 closed down 0.62% at 8712.53 and the Euro Stoxx 50 closed down 1.31% at 5461.17 as the last Trump tariff threat hit market confidence. Overnight in the US the S&P 500 rose 0.24% to 6144.15 and the NASDAQ rose 0.07% to 20056.25.
This morning on currencies, the British pound holds steady amid inflation pressures and geopolitical uncertainty. The pound is currently worth $1.261 and €1.208. On Commodities, Oil (Brent) is at $75.95 & Gold is at $2954 – a fresh high. On the stock markets, the FTSE 100 is currently down 0.3% at 8687 and the Eurostoxx 50 is up 0.45% at 5485.
BAE Systems is reporting landing record orders as Ukraine war intensifies.
US President Donald Trump said it would be possible to reach a fresh trade deal with China, signaling he is open to heading off a brewing trade fight between Washington and Beijing. “It’s possible, it’s possible,” Trump told reporters on Air Force One on Wednesday, when asked if he would make a new agreement with China. “There’s a little bit of competitiveness, but the relationship I have with President Xi is, I would say, a great one,” Trump said.
Separately, the president suggest the US Government could give 20% of DOGE savings to Americans, with the rest going to reducing the national deficit.
Finance chiefs urge Reeves to ease investment taxes
Executives from major finance firms, including JPMorgan and Goldman Sachs, met with Chancellor Rachel Reeves on Wednesday to discuss ways of enhancing tax incentives for UK consumers to invest and to boost UK competitiveness. Key topics included altering the tax treatment of cash savings accounts (ISAs) to encourage investment in stocks and bonds, as well as reducing stamp duty on stock investments. James Carter, head of platform product policy at Fidelity International, suggested lowering the cash Isa tax-free limit to just £4,000 a year, down from £20,000. Reeves reiterated her commitment to cutting red tape, a source said. The Treasury also confirmed plans to reduce the time for settling securities trades from two days to one by October 2027.
UK house prices rise £12,000 in a year
The UK housing market is witnessing a significant boom, with average property prices increasing by over £12,000 in the past year, according to Purplebricks. Homeowners in suburban areas, such as St Albans and South Oxfordshire, have seen substantial gains, with prices rising by 8% and 9%, respectively. However, central London is experiencing a stark contrast, with areas like Kensington and Chelsea facing a dramatic 23% drop in property values, resulting in an average loss of £245,105. Despite these declines, the overall average property price in London remains high at £548,939. The report indicates that England’s average house price now stands at £290,564, reflecting a 4.3% increase over the year.
Seperately the Office for National Statistics reported that house prices saw their sharpest annual rise in nearly two years in December 2024, but experts warn that a surprise spike in inflation could soon erase sub-4% mortgage rates from the market. They report the average UK house price reached £268,000 in December 2024, up by 4.6% from a year earlier. This marked a steep acceleration from the 3.9% annual increase recorded in November.
Pensioners face tax hike shock
New analysis indicates that retirees may face taxation on their state pension as early as next year. Deutsche Bank forecasts suggest that annual state pension payments could increase by 5.5% to £12,631 in April 2026, potentially pushing low-earning pensioners into the tax bracket. Currently, state pension payments are below the £12,570 tax-free personal allowance, but this could change due to the frozen thresholds. Rob Morgan, an analyst at Charles Stanley, said: “Something’s got to give. The state pension is a safety net so this seems wholly inappropriate.” Former pensions minister Sir Steve Webb noted that while HM Revenue & Customs may not pursue the tax initially, future years could see increased bills as thresholds remain frozen
Tax the rich for defence boost
UK ministers are advocating for increased defence spending funded by tax hikes on the wealthy, following concerns over European security amid US President Donald Trump’s peace talks with Vladimir Putin. Sir Keir Starmer stressed the need for the UK and EU allies to “step up” their defence budgets. With rising inflation and budget cuts looming, Labour figures are urging a special income tax for higher earners to avoid cuts to public services. One minister said: “Who’s against ‘those with the broadest shoulders’ paying more to secure our country’s security… except Reform.” The Chancellor, Rachel Reeves, has pledged not to raise taxes on working people, but some believe a tax rise linked to defence against Putin would be politically viable. Treasury minister James Murray affirmed the Government’s commitment to national security, saying: “We’ll always make sure that we take fiscal decisions with responsibility.”
Hairdressers face job crisis ahead
Hairdressers are warning that last year’s Budget could be the “final nail in the coffin” for their industry, as rising taxes threaten jobs. The Confederation of British Industry (CBI) reported a wave of insolvencies, with increased employer National Insurance contributions and minimum wage making it difficult for salons to employ staff. Toby Dicker, co-founder of the British Hair Consortium, said salons are resorting to self-employment to avoid tax hikes, leading to a significant loss in VAT receipts. The CBI predicts a 93% decline in jobs by 2030, disproportionately affecting female workers, who make up 84% of the industry.
Quiz clothing faces major job cuts
Quiz Clothing is undergoing significant changes as it enters pre-pack administration, with the majority of jobs expected to be preserved. The troubled fashion retailer has appointed Teneo as administrator for Zandra Retail, which operates its standalone stores in the UK and Ireland. Sheraz Ramzan, CEO of Quiz, said: “We are deeply sorry to those affected by the store closures, including our retail colleagues.” The company will close 23 shops, resulting in around 200 redundancies, while Orion Retail, a subsidiary of the founding Ramzan family, will acquire the remaining assets and continue trading from 42 locations. The move aims to secure a more sustainable future for the business amidst challenging trading conditions.
Homebase to close two more stores
Homebase is set to close its branches in Bury St Edmunds and Maidenhead in the coming weeks, following its administration several months ago. A spokesperson for administrators Teneo said: “All employee wages and benefits will be paid for their period of employment.” Homebase fell into administration in November, having operated 133 stores and employed 3,600 staff. The brand was sold to CDS, which included up to 70 locations and around 1,600 jobs. Currently, 26 stores remain on the market, with the future of another 43 stores uncertain.
Lloyds Bank
Lloyds Bank saw profit drop by a fifth last year and set aside hundreds of millions in the final quarter to cover a potential hit from motor finance mis-selling. Statutory pre-tax profit tumbled 20% to £5.97 billion in the year to December 31, the lender said Thursday, against company-compiled consensus expectations for £6.39 billion. Underlying net income slipped 7% to £12.85 billion in the meantime, while rate cuts saw its banking interest margin drop from 3.11% to 2.95%.
Quantum computing
Microsoft has unveiled a new chip called Majorana 1 that it claims will enable the creation of quantum computers able to solve “meaningful, industrial-scale problems in years, not decades”. The new chip is powered by a topological superconductor that Microsoft says can control Majorana fermions, subatomic particles that were first theorised in 1937 but whose existence scientists had struggled to prove.
Apple
Apple has announced a new iPhone which brings artificial intelligence (AI) features at a lower cost than its flagship handsets. The iPhone 16e has the same processor as the larger iPhone 16, Apple said, with similar storage options, though a lower spec elsewhere, including fewer cameras. It will launch in the UK for £599, which is £200 less than the iPhone 16 – but more than double what the original iPhone SE went for when it launched in 2016.
Latest Insolvencies
Appointment of Administrator – BEN JOHNSON LIMITED
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Appointment of Administrator – TAKUMI INTERNATIONAL LIMITED
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Appointment of Liquidators – SEA PLACE GARAGE LIMITED
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Appointment of Liquidators – MULTI PLASTIC FABRICATIONS LIMITED
Appointment of Liquidators – THE KENT HAND AND PLASTIC SURGERY UNIT LIMITED
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Appointment of Liquidators – ANIMULATIONS LTD
Appointment of Liquidators – SB SOUTHERN LIMITED
Appointment of Liquidators – CHERUB FUNDING LIMITED
Appointment of Liquidators – ASSURED OUTCOMES CONSULTANCY LTD
Appointment of Liquidators – MH TYNEMOUTH LTD
Appointment of Liquidators – RTAL DEALERS59 LIMITED
Appointment of Liquidators – PRITHM CONSULTANCY LIMITED
Appointment of Liquidators – WHITE HAT CONSULTING LIMITED
Appointment of Liquidators – RADICA U.K. LIMITED
Appointment of Liquidators – GIGI PALATNIK DESIGN LTD
Appointment of Liquidators – RAVENSCROFT ENTERPRISES LIMITED
Appointment of Liquidators – SPRINGFIELD PROPERTY DEVELOPMENTS LIMITED
Appointment of Liquidators – DRAFTY FINANCE LIMITED
Appointment of Liquidators – PICK ARTHEY (OUNDLE) LIMITED
Winding up Order (Companies) – ZEN GLOBAL LIMITED
Appointment of Liquidators – AJP INSTALLATIONS LTD
Appointment of Liquidators – CONQUEROR 74 TRADING LIMITED
Appointment of Liquidators – WE ARE MOP! LIMITED
Appointment of Liquidators – MARROW SOLUTIONS LTD
Appointment of Liquidators – SIRIUS 36 TRADING LIMITED
Petitions to wind up (Companies) – 40 TOLC FISH LTD
Appointment of Liquidators – B M PATEL & SON LIMITED
Appointment of Liquidators – GARDINER WILLIAMS ELECTRICAL LIMITED
Appointment of Liquidators – JAKEMANS LEASING LIMITED
Appointment of Liquidators – MA GRIFFIN ASSOCIATES LTD
Petitions to wind up (Companies) – SUFFOLK PLANT MACHINERY LIMITED
Petitions to wind up (Companies) – LIBERUM INDEPENDENT MEDICAL EDUCATION LIMITED
Petitions to wind up (Companies) – GUILDHALL PLACE LTD
Appointment of Liquidators – ARROW REFRIGERATION AND AIR CONDITIONING LIMITED
Appointment of Liquidators – BOOYAR.COM LIMITED
Appointment of Liquidators – JOHN MACBEATH & COMPANY LIMITED
Appointment of Administrator – BLANCHFORD & CO.LIMITED
Appointment of Administrator – MAIZECOR FOODS LIMITED
Appointment of Liquidators – PRIME LINING SOLUTIONS LTD
Appointment of Liquidators – GHRN CONSULTING LTD
Appointment of Liquidators – OVERACRES LIMITED
Appointment of Liquidators – ECOZEN LIFESTYLE LTD
Appointment of Liquidators – CLOUD NATIVE TECHNOLOGIES LTD
Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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!