Business news 20 December 2024
Many Brits worry about financing Christmas. Interest rates, markets & more business news that we thought would interest our members.
James Salmon, Operations Director.
Many Brits worry about financing Christmas
As the cost of living rises, four in ten Brits are anxious about affording Christmas this year. Despite these concerns, many shoppers are determined to stretch their budgets with astute purchases. Loyalty schemes play a significant role in this strategy, with the average Brit enrolled in four programmes, yet nearly half have unclaimed rewards worth up to £190. Additionally, a third of Brits use price-comparison websites and free delivery offers to save money. Belfast has emerged as the UK’s discount-diving champion, with 75% of its residents identifying as thrifty spenders.
BoE keeps rates on hold amid poor growth prospects
The Bank of England has decided to maintain interest rates at 4.75% following a split vote among its Monetary Policy Committee (MPC). While six members opted to keep rates unchanged, three advocated for a 0.25 percentage point cut due to concerns over stagnating economic growth. The MPC’s new projections indicate zero GDP growth for the last quarter of 2024, a downgrade from previous forecasts. The Bank said changes to employment costs in the Budget had created significant uncertainty in the economy. “Most indicators of UK near-term activity have declined,” the BoE explained. This means there would be a gradual approach to interest rate cuts next year, BoE Governor Andrew Bailey added.
Nearly half of Brits get more from the state than they pay in taxes
In the 2022-23 financial year, 45.3% of non-retired Brits, approximately 25m people, were classified as net beneficiaries, receiving more from the state than they contributed in taxes. This figure has risen from under 32% at the start of the century. Including retirees, the total rises to 52.6%. The Office for National Statistics (ONS) report highlights concerns over public sector sustainability, especially as tax rates approach record highs following Labour’s Budget changes. The median household income before taxes and benefits was £37,300, which increased to £39,700 after accounting for these factors. The wealth gap is significant, with the richest fifth earning £114,300 compared to £9,800 for the poorest fifth. The report also notes a 4.7% decrease in median equivalised final income due to the cost of living crisis.
Retail
UK Retail Sales volumes rose by 0.2% month-on-month in November, improving from a 0.7% fall in October but falling short of the FXStreet cited consensus of 0.5%. Retail sales also grew 0.5% in the year to November. This missed the FXStreet consensus of 0.8%, and declined from the 2.4% increase in the year to October. “Growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers,” the ONS said. When compared to their pre-coronavirus pandemic level in February 2020, volumes were down by 1.6%. Food stores sales volumes increased for the first time in three months, rising by 0.5%, particularly in supermarkets. Clothing stores sales volumes fell by 2.6%, following a 3.5% fall in October. The ONS noted that Black Friday fell outside of the reporting period.
Crypto fraud
Hackers stole $2.2bn from cryptocurrency platforms in 2024, according to Chainalysis. In a new study, the research firm revealed that hackers linked to North Korea accounted for more than half the loot. America has accused the hermit kingdom of resorting to cybercrime to raise funds and to avoid international sanctions. Last week America charged 14 North Koreans for extorting funds from American firms.
Markets
London markets were firmly yesterday as investors digested interest rate decisions from the Bank of England and the US Federal Reserve. The FTSE 100 closed down 1.14% at 8105.32 and the Euro Stoxx 50 closed down 1.58% at 4879.00.
Overnight in the US however, the markets bounced back as Wednesday’s sell off was deemed oversold before eventually retreating again with the S&P 500 dropping 0.09% to 5867.08 and the NASDAQ falling 0.1% to 19372.77.
This morning on currencies, the pound is currently worth $1.250 and €1.2045. On Commodities, Oil (Brent) is at $72.25 & Gold is at $2605. On the stock markets, Stocks are falling again today after yesterday’s attempt at a rally in the US fizzled. The FTSE 100 is currently down 0.61% at 8057 and the Eurostoxx 50 is down 1.33% at 4814.
The decline in Bitcoin continued down to $117,800 from the recent all time high of £133k as investors yanked cash from ETFs that invest in the cryptocurrency.
Tariffs
Trump threatened the EU with tariffs if its member countries don’t buy more US oil and gas. The euro strengthened against the dollar in a sign investors believe the bloc will be able to meet his demands and avoid punitive measures.
FCA extends motor finance complaint deadline
The Financial Conduct Authority (FCA) has announced an extension for companies to respond to motor finance complaints until 4 December 2025, following a significant high court ruling. The FCA stated: “We have extended the time firms have to handle complaints to help prevent disorderly, inconsistent and inefficient outcomes for consumers and firms.” This decision comes after a review of historical discretionary commission arrangements (DCAs) and a landmark court case that highlighted the need for customer consent regarding commissions. Additionally, the FCA has extended the timeframe for consumers to refer non-DCA complaints to the Financial Ombudsman until 29 July 2026. The FCA plans to further outline its review of motor finance in May 2025.
FCA proposes simpler investment information system
The UK’s Financial Conduct Authority (FCA) has proposed a new, simplified investor information system to enhance investment clarity and participation. This initiative is part of the Labour Party’s efforts to reform regulations in the financial sector. Simon Walls, interim executive director of markets at the FCA, said: “High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth.” The consultation period will conclude in March.
PM admits tractor tax wasn’t aimed at wealthy landowners
In a recent session with MPs on the Liaison Committee, Sir Keir Starmer contradicted previous claims made by Farming Minister Daniel Zeichner regarding inheritance tax changes affecting family farms. Zeichner had asserted that the reforms were aimed at wealthy individuals using agricultural land as a way of dodging tax, but Starmer said the Government’s intention was to simply raise revenue in the Budget, adding: “It wasn’t aimed at a particular group of individuals.” Following the session, Environment Committee chairman Alistair Carmichael asserted that the PM’s comments undermined the Government’s justification for the tax changes. “It was clear from his answers that it is just about raising money. He could not have been clearer that if farmers are caught and farms have to be sold then that is fine by him.” Meanwhile, the Environment Secretary Steve Reed has again defended the policy, claiming that farmers are “in it for the money” and that farmers contemplating suicide over the taxes should seek mental health support.
New chief at HMRC
John-Paul Marks has been appointed as the new permanent secretary and chief executive at HM Revenue and Customs, succeeding Sir Jim Harra, who will step down in April. The Treasury is facing significant pressure to modernise and reform the tax system while enhancing customer service.
Original Factory Shop exploring ‘options’
The Original Factory Shop, one of Britain’s largest discount retailers, has engaged Teneo to explore various strategic options, including a potential sale. Duke Street Capital, which acquired the company in 2007, previously attempted to initiate a sale process with Deloitte, but no deal materialised. The retailer, which operates 187 stores and sells brands like Adidas and Calvin Klein at discounted prices, has faced declining revenue and profits, with a drop from £124.4m to £118.7m in the last year. Despite challenges, the company plans to continue its store transformation programme and has opened 27 new stores this year under the leadership of Ian Williams.
Bestway Group’s turns to CVA
Bestway Group is set to initiate a company voluntary arrangement (CVA) to exit approximately 35 vacant shops previously operating as Bargain Booze and Wine Rack off-licences. The restructuring process, overseen by PricewaterhouseCoopers, aims to address leases tied to non-trading locations within its retail estate. A source indicated that “about 35 which were not currently trading would be compromised in full under the plan.” Additionally, around 10 more sites will seek rent reductions. Bestway’s retail division, which includes around 200 stores, was acquired for £7m following the collapse of Conviviality in 2018. Notably, the restructuring will not result in job losses.
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.