Business News 20th July 2017
This is the hopefully enjoyable and informative, bite size business news compiled by the Credit Protection Association on Thursday 20th July 2017 for its members and visitors.
Markets Round up
Yesterday The FTSE 100 rose 0.6% to 7431 mirroring a rise in the Eurostoxx 50 of 0.6% to 3500. The FTSE 250 also rose 0.4% to 19,694. Stocks were driven positive corporate results and a global equity rally which is ignoring the geo political issues and focusing on the company profits. US Markets continued their push into record territory with the s&P 500 up 0.5% to 2474 and the Nasdaq up 0.6% to 6385. Asian shares picked up the baton and climbed as well with the Nikkei up 0.6% to 20,145 and the Hang Seng up 0.25% to 26740 with the yen easing after the bank of Japan confirmed it will keep its stimulus package in place. Globally the MSCI world index was up 0.46% to 1959. The pound weakened marginally against the dollar to 1.2991 but held steady against the Euro at 1.129. Oil prices were up 1.6% with Brent approaching $50 and WTI at $47. Gold edged down to $1238
Government to accelerate state pension age rises
In a surprise move, the Government has brought forward a rise in the state pension age on the back of suggestions from the Cridland report. The state pension age will rise to 68 over two years from 2037, the government confirmed yesterday. Retirement ages were previously scheduled to rise to 67 by 2028 and 68 by 2046. The announcement means 6 million workers currently aged between 38 and 45 will have to work an extra year before receiving the state pension. The move is projected to save taxpayers £74 billion.
The Times, Page: 2 City AM BBC News The Daily Telegraph, Page: 8 Independent i, Page: 8 Daily Mail, Page: 15 The Press and Journal, Page: 14 The Scotsman, Page:
European Bank
European Central Bank President Mario Draghi and his fellow policymakers face a dilemma today during the July rate-setting session as the bank looks to map its exit from Quantitative Easing despite low inflationary pressure. The Governing Council, led by Draghi, is widely expected to keep all its three interest rates unchanged for an eleventh consecutive policy session, and retain its asset purchases that are set to run until the end of the year. That said, economists widely expect Draghi to tread very carefully when he speaks in the post-decision press conference.
BBC star salaries
The BBC published yesterday the salaries of all its directly employed stars earning over £150,000 a year. It revealed a larger gender pay gap with two thirds being male and the highest paid woman, Claudia Winkleman earning less than a quarter of Cris Evans £2.25m at £500k. Jeremy Corbyn has said he would put a cap on the salaries of the BBC’s highest paid stars and force them to pay more tax. The BBC would also be subject to an “excess pay levy” for salaries over £330,000 a year. If the party’s pledge for a maximum ratio of 20-to-one between the highest and lowest paid staff in public-sector organisations came into force it would cap salaries at £320,000, meaning an 80% pay cut for the highest earner Chris Evans.
PM to meet with business leaders
Theresa May will today meet with leading business figures as part of an attempt to build bridges between companies and Downing Street as part of preparations for Brexit. The PM will chair the first in a series of regular meetings this afternoon that will focus on leaving the EU and the domestic economic outlook. Stephen Martin from the IoD, Carolyn Fairbairn, from the CBI, and Mike Cherry from the FSB are among those who will be in attendance.
Tories should better articulate benefit of low taxes, says Fallon
Defence Secretary Sir Michael Fallon has urged the Tory party to “better articulate the moral case for lower taxation” during a reception hosted by the Policy Exchange think tank. He said the Conservatives needed to emphasise their core beliefs if they are serious about keeping Jeremy Corbyn out of No 10.
Brexit
David Davis and his EU counterpart Michel Barnier will meet today to take stock of the first week of hard negotiations on the UK’s withdrawal from the EU. Four days after talks got underway in earnest, today will be a chance to see if the two sides have managed to identify some common ground on issues like citizens’ rights and the way in which a financial settlement will be calculated. We will inevitably hear lines like ‘there is still a long way to go’ in the press conference later today. However, it is also significant because indications of early progress (or stumbling blocks) could give us a hint about whether the two sides will be in a position to open talks on trading arrangements after the EU summit in October.
Construction sees self-employment boom
The Sun reports that the number of UK builders registered as self-employed has jumped from 950,000 in the 2012/13 tax year to 1,158,000 in 2016/17.
CGT rules compromising retirements of landlords
The National Landlords Association (NLA) is calling for a change to tax rules to incentivise buy-to-let landlords wishing to sell their properties to fund retirement. The NLA says current CGT rules are compromising the retirements of UK landlords and suggests tapering the CGT landlords pay depending on how long they have owned and let it out for. The NLA also wants the status of residential property to be recognised as a pension investment.
Moneywise
Construction firms at risk of insolvency
Brexit uncertainty has rocked the construction sector with 26% of companies currently showing warning signs of being at risk of failure, according to data from accountants,Moore Stephens. Companies building commercial properties were particularly at risk, with 32% facing an increased chance of going bust in the next three years, with residential builders at 23%. Lee Causer, restructuring partner at Moore Stephens, said: “Uncertainty over future demand from potential purchasers and occupiers, particularly in the London office market, combined with rising materials costs and the increasing problem of skills shortages, could create a perfect storm”.
City AM
Car financing – another sub-prime bubble?
Harry Wilson in the Times ponders the risks in the sub-prime car financing market following the collapse of Vehicle Trading Group – hot on the heels of the collapse of the Car Finance Company. VTG’s administrators Grant Thornton reported that “whilst a number of parties expressed initial interest in the business, the value and bad debt record with the legacy VCL loan book was a concern for a number of the other parties approached”. The CEO of one UK lender told the paper he is not surprised. “We exited the subprime motor business when we spotted the warning signs. There are too many people competing for market share and mispricing risk as a result.”
The Times, Page: 47
Diversity
Diversity at the top of big UK companies is back in the news again with a new report suggesting that Black, Asian and minority ethnic groups (BAME) are significantly underrepresented across key management roles in British companies. Individuals from minority backgrounds comprise 12.5% of working people in the U.K, but make up just 6% of those in senior management roles.
independent
Japan
Japan’s exports jumped 9.7% from a year earlier to JPY6.6 trillion yen, about $59.1bn, in June for the seventh consecutive month of increase thanks to a weaker yen, the government said. Exports to China, Japan’s largest trading partner, rose 20% year-on-year to JPY1.25 trillion, the Finance Ministry said in a preliminary report. Exports to the US also climbed 7.1% to JPY1.3 trillion, while those to the EU grew 9.6% to JPY726.2 billion, the ministry said. Japan’s overall imports jumped 16% to JPY6.17 trillion, which led to a trade surplus of JPY439.9bn in June.
US Healthcare
Its not strictrly business newws but it will impact markets. The latest plan put forth by Republicans in the US Senate on health care reform would result in an increase in the number of uninsured people to 32 million by 2026, the Congressional Budget Office said Wednesday. The plan calls for repealing many provisions of the Affordable Care Act (ACA), also called Obamacare, with no new legislation to replace it. Before hitting 32 million uninsured people, the US would first have 18 million uninsured next year and 27 million uninsured in 2020. The latter would occur after the elimination of the ACA’s expansion of eligibility for the government health care system for poor and disabled people known as Medicaid and the elimination of subsidies for insurance purchased through the marketplaces established by the ACA. The CBO also warned that premiums would increase dramatically if Obamacare is repealed.
Beware wine fraudsters
Quantuma has issued a warning over fine wine scams following a recent fraud case. Partner Mark Wright says: “There is indeed a thriving market for investment in fine wines, but you need a certain amount of knowledge, an honest broker and to recognise that you may not achieve the returns promised.”
Daily Mirror, Page: 26
Previous News pages
Business News 19th July 2017
Business News 18th July 2017
Business News 17th July 2017
Business News 14th July 2017
Business News 13th July 2017
Business News 12th July 2017
Business News 11th July 2017
Business News 10th July 2017