Business news 20 March 2024

Inflation falls.  Bailey late on moving rates again. Government report finds DEI is ineffective and counterproductive.  And more business news that we thought would interest our members.

James Salmon, Operations Director.

Breaking Inflation news – more tomorrow

UK Inflation came in lower than expected at 3.4% year-on-year in February, official figures showed this morning, down from 4% in January. Month-on-month, the headline consumer price index rose by 0.6%, returning to positive territory after a -0.6% reading in January. Economists had expected an annual rate of 3.5% for February.

Bailey late on moving rates again – Citi

Economists at US investment bank Citi say the Bank of England has already “left it too late” to start cutting interest rates. Analysts estimate that rates are as much as two percentage points too high for current economic conditions. Despite prices having fallen from a high of 11.1% in October 2022 to 4% in January, the Bank has held interest rates at 5.25% and is widely expected to keep them there on Thursday. But Benjamin Nabarro, chief UK economist at Citi said this risks doing more harm than good: “When does an abundance of caution turn to negligence?” Policymakers have kept rates high due to concerns over rising wages. But Nabarro says pay growth has slowed sharply in recent months and is concentrated in low paying sectors, indicating that the national living wage is more to blame than organic pay growth. Job vacancies have also trended down, suggesting the high demand for workers has eased considerably.

Government report finds DEI is ineffective and counterproductive

A report commissioned by Business Secretary Kemi Badenoch has found that diversity schemes in the workplace have little impact in increasing diversity or reducing prejudice. The report calls for a fair approach to diversity schemes, taking into account the disadvantages faced by the white working class. Mrs Badenoch warns that inclusion policies must not come at the expense of white men. She criticises “performative gestures” such as compulsory pronouns and rainbow lanyards, stating that they are often a sign that organisations are struggling to demonstrate inclusivity. The report also highlights the risk of organisations breaking the law by discriminating against white candidates for jobs in their attempts to boost visible diversity. Mrs Badenoch calls for equality strategies that uphold fairness and meritocracy. The report recommends that employers consider less visible diversity, including socioeconomic and educational background. It also calls on the Equality and Human Rights Commission to clarify the legal status for employers in relation to diversity and inclusion practice.

FCA looks to tighten enforcement and ramp up use of AI

The Financial Conduct Authority (FCA) has announced its plans for the year ahead, including a focus on tightening enforcement of its consumer duty rules and increasing the use of artificial intelligence (AI) to prevent fraud and improve consumer experiences. FCA chief Nikhil Rathi commented: “We remain resolute in supporting the vital role the financial sector plays in the UK’s long-term economic growth, embracing the potential benefits that technology presents both for us and the firms we regulate, while also continuing to protect consumers and ensure market integrity.” The FCA’s funding requirement has been increased by 10.7% to £755m with the regulator expected to take firmer action against firms in the coming year, targeting breaches that pose the greatest risk of harm. The FCA’s automation push comes as its responsibilities expand into new areas such as cryptocurrency and ESG labelling.

HMRC to close phone lines every year for six months

HMRC has decided to close its phone lines over the summer every year after a trial run last year. Over the period – from April 8 until September 29 – taxpayers will be unable to call the tax office for help with their tax return. The tax office said these measures will be repeated every year to allow “helpline advisers to focus support where it is most needed.” Commenting on the scheme last year, chair of the Treasury Select Committee Harriett Baldwin said the change “should not be forced upon taxpayers until there is evidence that people know how to do their taxes on HMRC’s incredibly complex website.” Elsewhere, the Chartered Institute for Taxation’s Gary Ashford called the decision “misguided” pointing out that HMRC had failed to conclude from its own evaluation that there had been a long-term shift from phone contact to online self-service. The Institute of Chartered Accountants in England and Wales described the move as “disappointing” while Victoria Todd, of the Low Incomes Tax Reform Group, said it would lead to more errors and non-compliance “storing up problems for taxpayers and HMRC further down the line.”

War on landlords could cost the economy billions

Successive tax raids under the Tories could lead to one in 10 private landlords selling up, according to a report by the National Residential Landlords Association (NRLA). The Levelling Up Secretary’s Renters Reform Bill, which threatens to end no-fault evictions, is expected to drive small and medium landlords out of the private rental sector. PwC estimates that a 10% exodus of these landlords would result in a loss of £4.5bn and 39,000 jobs. The private rental sector contributes £45bn to the economy and supports 390,000 jobs, mainly in real estate, construction, building maintenance, and landscaping. Landlords have faced successive tax raids under the Conservatives, including a 3% stamp duty surcharge on second homes and the removal of mortgage debt relief. High mortgage rates and increased costs have led to 65% of landlords raising rents in the past year. However, tenants are reaching their limit, with 35% of landlords freezing rents. A record high 21% of landlords sold properties in the last year, while only 8% bought. Jeremy Hunt’s proposed cut to capital gains tax would result in higher tax bills for property owners.

Dollar bounce

The US dollar is up over 2% as it rallies from its 2023 as rate cut expectations were dampened in the US

Rachel Reeves pledges to borrow only to invest

Rachel Reeves, the shadow chancellor, has pledged that a Labour government would aim to borrow only for investment, echoing the fiscal rules of former chancellor Gordon Brown. Reeves confirmed that Labour would match Rishi Sunak’s fiscal rule of reducing overall public debt as a share of GDP by the fifth year of official forecasts. However, critics including Institute for Fiscal Studies director Paul Johnson argued that the rules are too loose and would require significant growth to be met. Elsewhere, Sharon Graham, general secretary of the Unite union, took an even harder line, saying: “If you stick to phoney fiscal rules, rule out taxing the wealthy and pander to the profiteers, you end up in a straitjacket of your making.” She added: “Ripping up building regulations and tinkering in the public sector are not going to deliver serious growth – that’s for the birds.” In her speech at the Mais lecture in the City of London, Reeves also said Labour would make it a requirement for government to be subject to an independent Office for Budget Responsibility forecast and said a “fundamental course correction” was needed. “Not only for the living standards of working people; not only for Britain’s competitiveness in a fast-changing world – though both are at stake. But also for the health of our democracy.”

Ted Baker to call in administrators

The US owner of Ted Baker has called in administrators, putting hundreds of jobs at risk. Authentic Brands Group filed a notice of intention to appoint Teneo Financial Advisory as administrators to No Ordinary Designer Label, the fashion brand’s retail and ecommerce business in the UK and Europe. The US group said the retailer had built up “a significant level of arrears” over recent years. Authentic Brands owns nearly 50 fashion, sportswear and celebrity brands, and makes its money by buying brands and turning them into licences. The company, which posted an annual turnover of nearly $30bn last year, said Ted Baker stores and its website will continue to trade as normal.

MPs demand true cost of Body Shop collapse

Former staff are being told to seek redundancy payments from the Government-backed scheme as taxpayers will be responsible for the costs of The Body Shop’s collapse. MPs have demanded answers from the insolvency watchdog regarding the collapsed retailer’s redundancy bill and the number of eligible workers. The regulator is also being questioned about any alleged breaches of the redundancy process by administrators at FRP, which took over The Body Shop’s UK arm. The Body Shop collapsed into administration in February, resulting in job losses and store closures. German buyout specialist Aurelius acquired the retail chain for £207m three months prior to its collapse.

Hunt suggests the pension triple lock is ‘under review’

The Chancellor is facing pressure to increase defence spending, which may require reforms to the state pension and welfare benefits. Jeremy Hunt has suggested that the pension triple lock is “under review” as the Government seeks to fund increases in defence spending and boost economic growth. Speaking at a hearing of the Lords’ economic affairs committee, the Chancellor also acknowledged the need to improve welfare reform to prevent people from being excluded from the workforce. Mr Hunt said defence spending was currently above 2%, NATO’s target, and would rise to 2.5% but this would cost around £12bn a year and would only be possible when economic conditions allowed.

Evergrande’s alleged $78bn fraud is among biggest ever

China Evergrande Group’s alleged $78bn revenue overstatement escalates the legal peril of founder Hui Ka Yan, who now stands at the centre of one of the biggest financial fraud cases in history. The nation’s top securities regulator said the developer’s onshore unit, Hengda Real Estate Group, inflated revenue by recognising sales in advance in the two years through 2020 that led up to its default. It imposed a 4.18bn yuan ($581m) fine against the unit. “The alleged fraud is shocking in its scale,” said Brock Silvers, managing director at private equity firm Kaiyuan Capital. “Hui became an expected civil and criminal target as soon as Evergrande was ordered into liquidation.” Hengda’s auditor in 2019 and 2020 was PricewaterhouseCoopers Zhong Tian LLP, a mainland entity affiliated with PwC’s network. PwC resigned as Evergrande’s auditor in January 2023 due to audit disagreements. In Hong Kong, the city’s Financial Reporting Council said in 2022 that it was looking into Evergrande’s financial statements for 2020 and expanding an investigation of an audit carried out by PwC. Evergrande currently has about $332bn in liabilities.


Latest Insolvencies

Appointment of Liquidators – PIXELART INC LIMITED
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Appointment of Liquidators – E2E CONSULTANCY LTD
Petitions to wind up (Companies) – NW ELECTRICAL CONTRACTORS LIMITED
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Appointment of Liquidators – SCCL 3 LIMITED
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Appointment of Liquidators – BAC2 LTD
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Appointment of Liquidators – I WANT A PARROT LTD
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Petitions to wind up (Companies) – SIGHT ACTION SENSORY SERVICES LIMITED
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Petitions to wind up (Companies) – AEP EUROPE LIMITED
Appointment of Liquidators – CUSTOMER CONSULTING LIMITED
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Appointment of Administrator – TRICIS LTD
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Petitions to wind up (Companies) – SHAW PRESERVATION SCOTLAND LTD
Appointment of Liquidators – COMPUTER KNOW-HOW LIMITED
Winding up Order (Companies) – KITE DEDICATED LIMITED
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Appointment of Liquidators – TOMTECH IT LTD
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Winding up Order (Companies) – LEXMILE TRADING LIMITED
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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 one will be particularly deadly for suppliers for some time to come.

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 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 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.