Business news 20 August 2024
UK Economy just right. Consultants no help at all. Hospitality, mortgages, energy bills, gold, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
UK Economy just right
While the new labour government wants us to think it’s all economic doom and gloom ahead of their first budget in October’s budget. With tax rises well flagged to address a £20 billion hole in the finances, are the nations numbers really that bad?
In the first half of the year the UK economy enjoyed the fastest growth in the G-7. The government won’t make a big thing of it as this economic performance is inherited rather than a reaction to their election win.
But the fact is economists are describing the UK as a Goldilocks economy right now – warm enough to keep growth going yet cool enough to allow the Bank of England to continue with the interest rate cuts.
Big three consulting firms “no help at all”
Looking for help in your business? Be careful what advice you seek.
A survey commissioned by digital consultancy Emergn found that 84% of senior executives who worked with the big three consulting firms – McKinsey, Boston Consulting Group and Bain – thought they were no help at all. Only 13% reported they were of some help while 3% said they had made things worse.
Alex Adamopoulos, founder and chief executive of Emergn, said: “What you have is big consultancy armies with briefcases. They walk into organisations and confidently try to get them to fit into a predesigned transformation strategy mould. But what organisations need is a solution that works in their context.”
Number of hospitality venues returns to growth
The UK hospitality sector is witnessing a resurgence, with an average of five new venues opening daily over the past quarter. According to the latest hospitality market monitor by CGA by NIQ and AlixPartners, the number of licensed operators reached 99,207 by the end of June, marking a net increase of 462 establishments. This growth is particularly notable in casual dining restaurants, which have seen a 1.7% rise in numbers after a significant decline during the pandemic. Graeme Smith, managing director at AlixPartners, said: “The return to outlet growth reflects the stabilisation of the market and paints a more positive picture for businesses and investors alike, with this growth acting as a marker for the recovery of the industry.”
Mortgage rates lowest since September 2022
Good news if you sell on credit to consumers. Looks like their lot is improving. Mortgage rates in the UK have reached their lowest levels since the end of September 2022, providing relief for homeowners and potential buyers.
NatWest is now offering a five-year fixed rate of 3.83%, the lowest since September 2022. Following a cut in the Bank of England’s base rate from 5.25% to 5%, seven of the ten largest lenders have introduced fixed-rate deals below 4%.
Mark Harris, chief executive of SPF Private Clients, noted: “With the base rate now cut and fixed rates falling, there is a greater desire to move.” The news comes after property portal Rightmove reported a 19% increase in prospective buyers contacting estate agents compared to last year, indicating a revitalised market.
Energy bills to surge by 9%
Maybe I spoke too soon about consumers improving. Energy bills are reportedly set to rise by nearly £150, putting additional strain on millions of pensioners who are losing their winter fuel payments. Analysts at Cornwall Insight predict the energy price cap will increase by 9% to £1,714 in October, marking a £146 rise from the current cap. Craig Lowrey, principal consultant at Cornwall Insight, said: “This is not the news households want to hear when moving into the colder months.” He went on to say that the “lingering impact of the energy crisis has left us with a market that’s still highly volatile and quick to react to any bad news on the supply front.”
Markets
Markets climbed as analysts anticipated further indications of rate cuts when central bankers meet at Jackson Hole this week. Yesterday, the FTSE 100 closed up 0.55% at 8356.94 and the Euro Stoxx 50 closed up 0.64% at 4871.41. Overnight in the US the S&P 500 rose for an 8th straight day 0.97% to 5608.25 and the NASDAQ rose 1.39% to 17876.77.
MSCI’s all-country stock index headed for a ninth day of increases, the longest run of gains since December.
This morning on currencies, the pound is up and currently worth $1.30 and €1.173. On Commodities, Oil (Brent) is down at $77.1 & Gold is up at $2521. On the stock markets, the FTSE 100 is currently down 0.58% at 8308 and the Eurostoxx 50 is up 0.2% at 4881.
Gold
For the first time ever, a bar of gold is worth over one million dollars. The milestone was hit Friday, when the spot price passed $2,500 per troy ounce, an all-time high. With Gold bars weighing 400 troy ounces.
Tax on dividends hits record high
The number of investors subject to dividend tax has surged, with 1.2m higher-rate taxpayers expected to pay in 2024-25, up from 556,000 in 2021-22. This increase is attributed to cuts in the tax-free allowance, which was reduced from £2,000 to £500, and frozen tax thresholds. Laura Suter, director of personal finance at AJ Bell, stated: “The Government slashing the tax breaks on dividends means that almost two million more people will have to pay the tax.” The total dividend tax bill is projected to reach £17.8bn this year, affecting nearly 3.6m investors. The burden is particularly heavy for those in the top 45% tax band, with 320,000 expected to contribute £10.4bn. The current tax rates for dividends are 8.75% for basic-rate, 33.75% for higher-rate, and 39.35% for additional-rate taxpayers.
Mike Lynch missing after yacht sinks, co-defendant dead
The former chief executive of Autonomy, Mike Lynch, is missing after his yacht sank off the coast of Sicily. The tech entrepreneur was celebrating his victory after a 12-year legal battle over the software group’s $11bn sale to Hewlett-Packard in 2011. Members of his legal team and their families were on board as well as Jonathan Bloomer, chair of insurance group Hiscox and Morgan Stanley International, who appeared at the trial as a witness for the defence. Christopher Morvillo of law firm Clifford Chance, who represented Lynch, is missing while another Clifford Chance lawyer, Ayla Ronald, was among those rescued. Lynch’s teenage daughter Hannah is also missing but his wife, Angela Bacares, survived the disaster. Meanwhile, Lynch’s co-defendant in the US fraud case, Stephen Chamberlain, has been pronounced dead after being hit by a car whilst out running in Cambridgeshire on Saturday. Chamberlain was also acquitted of fraud and conspiracy to inflate the value of Autonomy before it was sold.
AMD
Advanced Micro Devices said it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of artificial intelligence chips and hardware and battle Nvidia. AMD plans to pay for 75% of the ZT Systems acquisition with cash and the remainder in stock. The company had $5.34 billion in cash and short-term investments as of the second quarter.
Topps Tiles acquires CTD brands
Topps Tiles has successfully acquired CTD Tiles’ brands, intellectual property, stock, and 30 stores, along with the operation of two distribution sites in Leeds and Kings Norton, Birmingham, for approximately £9m. This acquisition follows CTD’s recent administration, which resulted in the closure of 56 stores and the redundancy of 268 employees. James Lumb, joint administrator, noted that the tough market conditions were “insurmountable” for CTD as demand failed to recover. Topps Tiles will retain 92 former CTD workers, providing continuity amid the transition.
Latest Insolvencies
Appointment of Administrator – AF ACCIDENT REPAIRS LIMITED
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Appointment of Liquidators – WHARTON ASSET MANAGEMENT CAPITAL LIMITED
Petitions to wind up (Companies) – POLYDIGI TECH LIMITED
Appointment of Liquidators – BENISLA CONSULTING LIMITED
Appointment of Liquidators – JAYTEECO LIMITED
Appointment of Liquidators – MCLACHLAN ENGINEERING SERVICES LIMITED
Winding up Order (Companies) – TRUCK & PLANT SITE SERVICES LTD
Appointment of Administrator – AYIMA LIMITED
Appointment of Liquidators – YORK IMPORTS
Appointment of Liquidators – HEARTFIELD VENTILATION & AIR CONDITIONING CO. LIMITED
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Petitions to wind up (Companies) – P & L CLOTHING LIMITED
Petitions to wind up (Companies) – INCITO SYSTEMS LTD
Petitions to wind up (Companies) – DT CARE LTD
Petitions to wind up (Companies) – GLOBITAL CONSULTING LIMITED
Petitions to wind up (Companies) – TOMAHAWK DOORS LIMITED
Appointment of Liquidators – BRADES LIMITED
Appointment of Liquidators – MACHINE TOOL ENGINEERING AND FABRICATIONS LIMITED
Appointment of Liquidators – LEE TRADING EUROPE LIMITED
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Appointment of Administrator – STATUS PRODUCTS LTD
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Appointment of Liquidators – EXPORTING IS GREAT LIMITED
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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!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.