Business News 20th June 2017

We hope you enjoy reading the business news compiled by the Credit Protection Association on Tuesday 20th June 2017 for its members and visitors.

Growth will be slightly faster than expected but UK needs support from government

The ICAEW says that the UK economy will grow by 1.7% this year, faster than an earlier forecast of 1.6%. Economic growth slowed in the first quarter to only 0.2%, the slowest in a year, but the current and remaining quarters are expected to show a faster rate of growth, with exports becoming a bigger contributor than in previous years. However, government must do more to ensure businesses are confident in the UK economy, the ICAEW said. Elsewhere, the CBI predicts the UK economy will expand by 1.6% this year and 1.4% in 2018, up from its predictions in November of 1.3% and 1.1%, respectively. Despite the improved forecast, director Carolyn Fairbairn suggests the Conservative’s focus on the economy is slipping and urges the government to get on with infrastructure projects such as the Heathrow expansion.

City AM    The Guardian, Page: 25   The Daily Telegraph, Business, Page: 3    The Scotsman, Page: 10

SMEs unaware of new data protection rules

New data protection rules coming into force next May will change how companies are required to process information, such as customer lists and employee records. But a survey of more than 1,000 small companies, commissioned by Irwin Mitchell, found that 78% had not heard of the new rules, while 86% were not aware of the threat of fines. Only 11% had started preparing for it. Matthew Pryke, partner at Hamlins, said: “Too many businesses are complacent. Those who leave it to chance and don’t prepare now could be left high and dry if the ICO finds that businesses breach regulations.” The FSB warns the new rules will add to costs for SMEs and has called on the government to launch an awareness campaign over the summer.

The Times, Page: 51

Will coffee taste worse as the planet warms?

Coffee drinkers could face poorer-tasting and higher-priced brews due to climate change, say scientists from London’s Kew Gardens.


President Emmanuel Macron’s government on Monday promised to reshape France’s political landscape after winning the commanding parliamentary majority he sought to push through far-reaching pro-growth reforms. Macron’s centrist Republic on the Move party won a comfortable majority in Sunday’s election, which marked a record low turnout for a French parliamentary ballot. Government spokesman Christophe Castaner said the high abstention rate – more than 50% of voters stayed at home – was a failure for the governing class and highlighted the need for a new politics. Pictured today is Macron attending a ceremony marking the 77th anniversary of French General Charles de Gaulle’s war-time resistance call .

HSBC launches £10bn fund for UK SMEs

HSBC has launched a £10bn lending fund for SMEs in the UK as it seeks to encourage export growth and “put SMEs in a stronger position to make investments that will stimulate local economies and create more jobs.” The 2017 SME fund and the bank’s broader package of support also includes a free banking offer of up to 18 months for start-ups and 12 months for switchers; and access to its Connections Hub – a digital platform connecting buyers and sellers around the world.

Banking Technology


Chancellor Philip Hammond and Bank of England Governor Mark Carney are due to deliver their delayed Mansion House speeches today. The Mansion House event was rescheduled from last week after the Grenfell Tower disaster and will instead be held as a breakfast event. Hammond is expected lay out some of his economic plans and push for a new approach in Britain’s exit talks with the European Union.

Yesterday’s UK market

UK equities were sharply higher in response to gains on the Continent and a new S&P 500 record. Ocado rose 11% on takeover speculation following the Amazon/ Whole Foods deal. Standard Life also attracted buyers after press reports that it was considering an offer for Lloyds Banking life unit, Scottish Widows.

Asian Markets

Asian shares were slightly lower, erasing initial gains, but Tokyo’s benchmark rose, cheered by gains on Wall Street led by technology shares.

U.S. Markets

U.S. stocks rose, with the U.S. 500 and the U.S. 30 hitting record highs helped by a technology sector rebound and strength in healthcare and financial stocks.

FDs will play vital role in guiding firms after Brexit

In the Yorshire post, Ismail Mulla examines how the role of finance directors will become more pivotal than ever post-Brexit as companies navigate the transition period. Paul Davies, audit partner at BDO, said: “In addition to taking overall control of a company’s accounting function, today’s new breed of finance directors are being asked to provide leadership to the board’s finance and accounting strategy, as well as optimising the company’s financial performance and strategic position.” Looking forward to this year’s Yorkshire Finance Director Awards, Mr Davies adds: “It’s important that we recognise and celebrate the value and knowledge that finance directors add to the organisations that they work for and how this all adds up for the economic performance of our region.”

Yorkshire Post, Business, Page: 5

SFO & Barclays

The UK Serious Fraud Office has charged four former Barclays executives in relation to its Qatar fundraising during the financial crisis in 2008. The four individuals charged by the SFO include Barclay’s former chief executive officer, John Varley. Also charged are Roger Jenkins, former executive chairman of investment banking & investment management in the Middle East & North Africa for Barclays capital; Thomas Kalaris, former chief executive of Barclays Wealth & Investment Management; and Richard Boath, former European Head of Financial Institutions Group.

Brexit negotiations

David Davis is taking his Brexit message across Europe after suffering a setback in Brussels. The Brexit Secretary is meeting members of Spain’s government as part of his effort to build bridges across the continent. Davis’s meeting with the administration of Prime Minister Mariano Rajoy came after UK officials agreed to the Brexit timetable set out by the European Commission’s chief negotiator Michel Barnier. Talks in Spain are expected to include the thorny issue of Gibraltar after the EU’s guidelines for talks suggested the disputed territory’s future economic status might be subject to a veto from Madrid.

Confederation of British Industry

The Confederation of British Industry forecast a steady, but subdued economic growth for the UK over the next couple of years as the country faces several headwinds. In its latest economic forecast, released Tuesday, the business lobby said British businesses and the government should navigate carefully in the months ahead amid the ongoing political uncertainty and Brexit negotiations. The business group forecast 1.6% growth for this year and 1.4% for 2018. The outlook for this year was revised up from 1.3% and that for next year from 1.1%. Nonetheless, the CBI’s projection remains unchanged compared to its previous November forecast, with the same average quarterly growth of 0.3% seen for the second half of this year as in November.

House Prices

Asking prices for houses in the UK are being cut at the sharpest rate in over four years amid political and economic uncertainty, as London and the South East underperformed the rest of the UK. The price of residential property coming to market in June dropped 0.4% compared to May, Rightmove research revealed, with the year-on-year annual rate of price increase slowing to 1.8%, the lowest since April 2013. It was the first time sales had fallen month-on-month in June since 2009, the height of the credit crunch.

Brexit’s effect on VAT and duty tariffs

Nicholas Hallam, chief executive of international VAT specialist Accordance, talks to Financial Director about the origins of VAT – both the French and the Germans lay claim to inventing it and VAT was implemented in the UK in 1973 as a condition of joining the EU. Considered the most efficient of taxes (and for this reason rejected by US Republicans) it is firmly in the sights of Brexiteers who have a vision for Britain as a low tax, low regulation hub for businesses. Mr Hallam says that although UK VAT law is based on the EU framework, over time we may see a range of different rates established post-Brexit. He goes on to look at possible consequences of Brexit on duties and tariffs, reporting to Intrastat, cross-border e-commerce and the VAT implications for services, which he says will not be impacted as significantly as the supply and movement of physical goods because changes to EU VAT rules in 2010 eliminated the need for VAT to be charged on most business-to-business transactions.

Increase in older people working would boost Britain

Bringing more people over the age of 55 into the workforce could boost the UK economy by £80bn, according to a new report from PwC. The UK ranks 17 out of 24 in an international league table for the percentage of people aged 55 to 64 who are employed. The UK employment rate among 55 to 64-year-olds stood at 63.4% last year, compared with 75.5% in Sweden, according to the firm’s analysis of OECD data. John Hawksworth, PwC’s chief economist, said: “As the number of people aged over 55 continues to grow steadily and life expectancy increases, the UK needs to make it as easy as possible for people to continue working for longer if they wish to do so. This would boost both GDP and tax revenues, so helping to pay for the increased health, social care and pension costs of an ageing population.”

The Daily Telegraph, Business, Page: 1, 3   The Times, Page: 44   Daily Mirror, Page: 41   The Press and Journal, Page: 35

BOE’s Forbes Warns on Inflation as Price Growth Outlook Worsens

“Bank of England policy maker Kristin Forbes has a message for her colleagues as her term ends: don’t leave it too late to rein in consumer prices. “For a period now, we have been underestimating the inflationary pressures — I wouldn’t be surprised if we continued to do that,” she said in an interview at her BOE office on Monday. Rising domestic cost pressure “does suggest there’s a cost to waiting.” U.S.-born Forbes, who leaves the central bank at the end of this month, has voted for higher interest rates at each of the past three policy meetings even as the British economy shows signs of weakening. Her argument is that inflation is being changed fundamentally by the pound’s depreciation since the nation voted to leave the European Union.”


Oil prices flirted with this year’s lows as market players saw more signs that rising crude production in the United States, Libya and Nigeria were undercutting OPEC-led efforts to support the market with output curbs.


Gold hit a one-month low of $1,243.2 an ounce as risk sentiment improved, before bouncing back a tad to $1,245.5.


Currencies traded in range after a quiet day for data releases.

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Business News 19th June 2017

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