Business news 20 September 2023
James Salmon, Operations Director.
Rishi Sunak set to water down net zero pledges. Decarbonisation falling short. Global debt pile hits record high. FCA probe into debanking dubbed a farce. Associate EU membership, the pound, oil prices, inflation, wilko, insolvencies & more business news that we thought would interest our members.
Rishi Sunak set to water down net zero pledges
Rishi Sunak is considering weakening some of the Government’s key net zero commitments, sources have told the BBC. The move could include delaying a ban on the sales of new petrol and diesel cars and phasing out gas boilers. Responding to the reports, the Prime Minister said the Government was committed to reaching net zero carbon emissions by 2050 but needed to take a more pragmatic approach. Mr Sunak said: “For too many years politicians in governments of all stripes have not been honest about costs and trade-offs. Instead they have taken the easy way out, saying we can have it all. This realism doesn’t mean losing our ambition or abandoning our commitments. Far from it. I am proud that Britain is leading the world on climate change.” The PM will give a speech on the policy shift in the coming days. The new approach is seen as an attempt to distance the Conservatives from Labour on net zero amid dire polling and with two by-elections looming. Sunak is reportedly weighing deferring by five years to 2035 a ban on the sale of cars powered by diesel and petrol, and weakening the phase out of gas boilers.
Rate of decarbonisation falling short, says PwC analysis
The rate of decarbonisation is falling short of what is required for a safe future climate, according to analysis by PwC. The analysis suggests that global year-on-year decarbonisation must now hit a rate of 17.2% to limit global warming to 1.5C above pre-industrial levels. However, the global decarbonisation rate achieved over the last year was only 2.5%. The required rate is also 12 times greater than the global average of 1.4% seen over the past two decades. Emma Cox, global climate leader at PwC, said: “The fact the world needs to decarbonise seven times faster is a spur to action, not a counsel of despair. While the overall pace has to pick up rapidly, dramatic change is possible when business and policymakers align.”
Global debt pile hits record high of $307tn
The latest report from the Institute of International Finance shows total global debt rose by $10tn to about $307tn in the six months to June, a fresh high.
FCA probe into debanking dubbed a farce
An initial report from the Financial Conduct Authority into the debanking of those whose political views do not align with banks has been branded a whitewash after the regulator concluded that politicians were not being denied access to services because of their beliefs. The probe was launched after Nigel Farage revealed how his Coutts account was closed because of his political views, publishing a dossier from the private bank to prove it. But his case was excluded from the FCA’s probe, which only sought information from banks, payments companies and building societies for the 12 months to June 2023. The FCA has said it would do a follow-up investigation, but leading Conservative figures are asking for its chief executive, Nikhil Rathi, to resign. Mr Farage questions the role of the FCA’s executive director Sheldon Mills, who is a trustee and former chair of Stonewall, the hard-left campaign group recently purged from Whitehall after promoting extreme views. Mr Farage says when left-leaning figures such as Rathi and Mills are running the FCA, “you’ll find it leans more toward political campaigning than financial market oversight.” Conservative MP Danny Kruger added: “So the regulator who presided over the political debanking scandal has failed to find evidence of it” and former Cabinet minister Lord Frost asked: “Is it surprising so many don’t trust our institutions?” City Minister Andrew Griffith reiterated previous comments on human rights and access to services, adding that clearly there was more to be done “to validate the submissions by banks and to ensure that the FCA have thoroughly followed up de-banked customer perspectives.”
Associate EU membership – a plan drafted with Labour in mind
A plan put together by France and Germany proposes an expansion of the European Union using a four-tiered system of membership. Under the proposals, Britain could rejoin the EU as an associate member, giving the UK access to the single market in exchange for a financial contribution and oversight by the European Court of Justice. The four tiers comprise of the innermost circle of membership, where countries would give up national vetoes to Brussels; a second tier would be made up of EU members unwilling to remove national votes on defence, foreign policy and security. They would still have to adhere to existing Lisbon Treaty obligations. The third level of membership is associate, which would include countries in the single market, but not the EU, such as Norway, Switzerland. The fourth and final outer tier would be the existing European Political Community, where Britain is now. The Times notes that Rishi Sunak, the Prime Minister, is due to host a meeting of the EPC in Britain next June. A European diplomatic source told the paper the plan was designed with Labour in mind. “It is carefully balanced politically to be a potential place for Britain without the need to ever rejoin the EU or to hold a referendum,” they said.
High-pressure jobs with low reward ‘can double risk of heart disease for men’
A study by Canadian academics has found that men with stressful jobs who feel they get little reward or thanks for their work are twice as likely to develop heart disease as those in more fulfilling roles. “The presence of job strain and effort-reward imbalance, which are key stressors identified in our study, can be found across a broad spectrum of professions and roles,” explained Mathilde Lavigne-Robichaud, lead author of the study. “It’s not limited to lower-paying jobs or roles with lower educational requirements. While some lower-paying jobs may inherently involve less autonomy, it’s essential to recognise that job strain can also affect individuals in higher-paying positions, especially if they face excessive demands and have limited control over their work tasks.”
One in five small businesses reinvest all profits to stay afloat
One in five small businesses has re-invested all their profits just to stay afloat this year, according to research. The cost-of-living crisis, energy price hikes, and increased supplier costs have eaten into margins, forcing businesses to put sustainability plans on hold. However, almost half of the businesses believe that eco-consciousness leads to success. Victoria Bacon, Smart Energy GB, which commissioned the research, said: “The economic climate has put Britain’s small businesses under a huge amount of pressure, so it’s understandable that they’re focusing on the essentials of running their business. But taking steps to reduce your environmental impact often delivers real cost savings too.”
The Pound
The last few weeks have been fairly downbeat on the markets and the pound has been hit by a gloomy outlook for the UK. During this time the pound has dropped from €1.17 to €1.15 against the Euro and we’ve seen the pound fall from $1.25 to $1.23 against the US dollar.
UK inflation forecast to be highest in G7
New forecasts from the Organisation for Economic Co-operation and Development (OECD) suggest prices will rise faster in the UK than any other advanced economy this year, with headline consumer price inflation averaging 7.2% over 2023. This is 0.2 percentage points higher than in the OECD forecast in June. The headline rate is expected to fall to 2.9% next year. Core inflation, which strips out volatile elements such as food and energy, would be 1% higher than expected, averaging at 6.3% this year, before falling to an average of 3.8% in 2024.
The UK’s latest inflation data for August will be released today and is predicted to rise from 6.8% to 7%, after falling steadily in recent months. Clare Lombardelli, chief economist at the OECD, said central banks should keep interest rates at high levels or raise them further to defeat inflation despite growing signs of economic strain.
Meanwhile Eurozone Inflation fell faster than expected last month. Consumer prices across the single currency area rose by 5.2% in the year to August, down from 5.3% in July, and lower than the 5.3% initially estimated for August.
UPDATE: Breaking news after the blog – UK CPI has declined to 6.7% down 0.1% for August 2023 and better than the 7% forecast. Core inflation dropped to 6.2% in August, the lowest level since February 2022. more in tomorrows blog.
Drivers warned of rising fuel costs as oil prices surge
Global oil prices surged to their highest level for 10 months on Tuesday with Brent crude hitting $96 a barrel. Prices later eased to $94.34 a barrel as investors took profits following three sessions of gains. The surge in costs was driven by Russia and Saudi Arabia deciding earlier this month to extend combined supply cuts of 1.3m bpd to the end of the year. The RAC motoring group warned drivers were “in for a hard time” at the pumps as oil headed back towards $100 a barrel. Latest figures show UK drivers are now paying £1.55 on average per litre of petrol, with diesel at £1.59. Since the start of August, average petrol prices have increased by 10p per litre and diesel prices by 13p. Rising global oil prices could impact inflation, economists warn, putting pressure on the Bank of England to continue fiscal tightening by increasing borrowing costs.
Governance: UK risks losing its global reputation for best practice
The ICAEW has warned that UK risks losing its global reputation for best practice in corporate governance as a result of the proposed changes to the Corporate Governance Code. In its response to the Financial Reporting Council’s (FRC) consultation on the Corporate Governance Code, the ICAEW said the proposed changes lack major aspects of the new G20 / OECD Principles for Corporate Governance, with omissions on sustainability and the need for companies to have ethics and compliance programmes, deemed by the ICAEW a “potential missed opportunity.” The ICAEW called on the regulator to ensure that an updated version of the Code remains an example of global best practice and makes compliance by business both feasible and desirable.
Union calls for answers over Wilko pension deficit
The union representing Wilko workers has called on MPs to question Lisa Wilkinson on how her family, which received almost £100m in dividends in the decade before the retailer’s collapse, will plug the company’s multimillion-pound pension fund deficit. Sir Steve Webb said the pensions regulator “will be all over this and looking very closely at what happened.” Wilkinson previously defended the payouts and pointed to its £100m worth of assets and a bank balance of £58m at the time. She told the Times that the board had “checked… there was sufficient cash, we went through the right governance, the auditors checked it off,” adding that what the family had taken out “really wouldn’t have made a difference.” Meanwhile, Wilko’s administrators, PwC, said on Tuesday that 111 more stores will close this week.
BP appoints Kate Thomson as interim CFO
Kate Thomson has been named as interim chief financial officer for BP following the leadership upheaval last week, which saw CEO Bernard Looney resign after failing to disclose the extent of past personal relationships with colleagues. Thomson, who is currently BP’s senior vice president of finance for production and operations, takes over from Murray Auchincloss, who was named interim chief executive officer last week. Thomson is a chartered accountant and joined BP in 2004, having previously worked for Ernst & Young.
Latest Insolvencies
Petitions to wind up (Companies) – EXPRESS LANE COURIERS LTD
Appointment of Liquidators – ACCOMMODATE LIMITED
Appointment of Liquidators – JW SYSTEMS LIMITED
Appointment of Liquidators – CLEARWATER SELLER LIMITED
Appointment of Liquidators – AVLONA EUROPE LIMITED
Appointment of Liquidators – THAMES CONSULTANCY SERVICES LTD
Appointment of Liquidators – LEMMA CAPITAL ADVISORS LTD
Appointment of Liquidators – FNSC LTD
Petitions to wind up (Companies) – CVG GROUP LTD
Petitions to wind up (Companies) – ANIMEGAMI LTD.
Petitions to wind up (Companies) – GRANTCLAY LIMITED
Appointment of Liquidators – CONSOLIDATED INVESTMENTS AND SECURITIES LIMITED
Petitions to wind up (Companies) – EMERALD PROPERTY DEVELOPMENTS (YORKSHIRE) LTD
Appointment of Administrator – JOUBERE LIMITED
Appointment of Administrator – DATATRIAL LIMITED
Appointment of Liquidators – EROS NEWCO LIMITED
Appointment of Administrator – DOG STAY LIMITED
Petitions to wind up (Companies) – REDBRIDGE SCOTLAND LTD
Petitions to wind up (Companies) – KISMET (SCOTLAND) LTD
Appointment of Liquidators – ERPWIZARDS LIMITED
Appointment of Liquidators – J FALK LIMITED
Appointment of Liquidators – SIGMA DELIVERY LIMITED
Petitions to wind up (Companies) – VOXSMART LIMITED
Petitions to wind up (Companies) – ENTERPRISE CARE SUPPORT LTD
Appointment of Liquidators – ROD HARRINGTON LIMITED
Petitions to wind up (Companies) – CLAYMORE CONTRACTING SERVICES LIMITED
Petitions to wind up (Companies) – JNR FOOD LTD
Appointment of Liquidators – K.J. LEASING LIMITED
Appointment of Liquidators – EUROFLAKE LTD
Appointment of Liquidators – SKI MORGINS EDUCATIONAL LIMITED
Petitions to wind up (Companies) – VICTOR LINCOLN LIMITED
Appointment of Liquidators – DAIRY BARN LTD
Petitions to wind up (Companies) – UK DEBT CLEAR LTD
Appointment of Administrator – NAYLORS FINANCE LIMITED
Appointment of Liquidators – ANTHONY CONSTRUCTION LIMITED
Appointment of Liquidators – AUDIO 4 PRODUCTIONS LTD
Petitions to wind up (Companies) – SURREY PROPERTY DEVELOPMENTS LIMITED
Appointment of Administrator – G.L.T.C. LIMITED
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 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 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.