Business News 20th September 2017

CPA hopes to inform, with its daily bite-size business news on Wednesday 20th September 2017, filled with stories we think will interest Business people.

Markets Round up

The FTSE 100 was up marginally yesterday 0.3% to 7275.25.  The Euro stoxx 50 climbed 0.13% to 3531.18.  Yesterday was the start of a two-day meeting of the Federal Reserve over in the U.S. with a decision on the interest rate due later today. Investors will also be keenly watching to see when the Federal Reserve will begin unwinding part of the $4.5 trillion balance sheet. Major U.S. indices hit record highs despite relatively muted trading as investors braced for the Federal Reserve’s policy decision this week. The S&P 500 was up 0.1% to 2506.65 and the Nasdaq moved similarly to rise to 6461.32. Asian markets were mostly unchanged as investors awaited monetary policy news coming at the conclusion of the U.S. Federal Reserve’s two-day meeting.

Further world economic news is expected this week as the Bank of Japan is to review monetary policy. Germany will also be in focus as campaigning ahead of the election heats up before the voters go to the polls on the 24th September.

Oil prices continued to climb with WTI at $50 and brent at $55.7 , left adrift by an EIA Drilling Productivity report that downgraded shale output expectations for September but called for record-high production in the following month. Reports of a drop in Saudi exports in July and a disruption of Nigerian crude deliveries were likewise taken in stride. Iraq’s oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut

Gold prices edged off the previous day’s two-week low and held in a narrow range around $1315 as the dollar eased ahead of a Federal Reserve meeting which is expected to provide more clues this week on the pace of U.S. monetary tightening.

The pound held at US$1.3533 but dropped against the euro to 1.1272.

Natural Disasters

Natural disasters dominated the news last night as hurricane Maria made landfall in Puerto Rico overnight after destroying the Dominican where it strengthened to a category 5 hurricane. In Mexico, a catastrophic 7.2 magnitude earthquake struck near Mexico City shattering buildings in 44 places around the capital, the current death toll is at 217 people where it is expected to increase.

Trump & Korea

U.S. President Donald Trump warned that the United States will be forced to “totally destroy” North Korea unless Pyongyang backs down from its nuclear standoff, mocking North Korean leader Kim Jong-un as a “rocket man” on a suicide mission. Loud murmurs filled the green-marbled UN General Assembly hall when Trump issued his sternest warning yet to North Korea, whose ballistic missile launches and nuclear tests have rattled the globe. Unless North Korea backs down, he said, “We will have no choice than to totally destroy North Korea.”

Small companies’ confidence plunges, says FSB

The FSB’s index of small business confidence fell from +15 in the second quarter of 2017 to +1 in the third – its lowest level since immediately after the EU referendum. The survey found one in eight members now expects to downsize, pass on or close their business, with 63% identifying the domestic economy, and 35% weak consumer demand, as barriers to growth between July and September. Mike Cherry, national chairman of the FSB, said: “Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike. A record proportion of business owners currently expect to downsize, sell or shut up shop.”

Theresa May prepares €20bn EU budget offer

Germany’s Angela Merkel has been told by the British government to expect Theresa May this week to offer to fill a post-Brexit EU budget hole of at least €20bn, the first attempt by London to meet European demands to settle its divorce bill. Olly Robbins, the prime minister’s top EU adviser, has contacted his counterparts in several European capitals to reassure them Mrs May’s Friday speech in Florence would include the financial offer, according to officials briefed on the discussions. Mrs May’s team is hoping the offer will break a three-month deadlock in Brexit talks with Brussels and allow them to move to a second phase of negotiations that would open discussions about a future trading relationship between the EU and the UK. U.K. Foreign Secretary Boris Johnson backed away from his threat to quit the government over Theresa May’s Brexit strategy, clearing the path for the prime minister to make a pitch for a deal to the rest of the European Union. A day after Johnson openly discussed the possibility of life out of office, a person familiar with his plans said that he would after all be attending May’s speech in Florence on Friday, where she will give what she’s called an “update” on her Brexit plans.


Tesco, Sainsbury’s, Asda and Morrisons all continued to grow sales in recent weeks as the supermarket industry extended its run of success as grocery price inflation continues to surge. Sales across the supermarket sector rose 3.6% in the 12 weeks to 10th September, research by Kantar Worldpanel revealed, the sixth consecutive period in which sales rose by more than 3% but down slightly from the 4% announced in August. Tesco sales continued their positive run since April with a 2.7% gain over the 12 week period, though the UK’s largest grocer saw its market share squeezed by 0.3% to 27.8% as discounters Lidl and Aldi gobbled up further territory.

Retail sales growth boosted by clothing

UK retail sales rose by 1% in August compared with the previous month, with sales of clothing and non-essential items reported as strong. The Office for National Statistics (ONS) also said that compared with last August, sales volumes were 2.4% higher. It was the 52nd month in a row that sales have risen. However, the ONS said the rate of growth was slowing. It also said that prices for non-food sales had risen at their fastest rate in 15 years. The figures add to evidence of rising inflation which has been driven, in part, by the fall in the pound’s value since the Brexit vote.

Consumer Debt

The Financial Conduct Authority has warned that the government needs to step in to help fight rising debt levels amongst Britain’s most vulnerable consumers as personal debt continues to mushroom. According to the Money Advice Service, there are now 8.3m people in the UK with debt problems, and debt charity Step Change said the percentage of its clients that had fallen behind on repayments jumped to over 40% in the first six months of the year as average debt rose from £14,251 to £14,367.

APNs up HMRC’s tax take 20%

HMRC collected £1.3bn in disputed tax in 2016/17 through accelerated payment notices (APNs), according to Moore Stephens, a 21% increase on the previous year’s £1.07bn. Dominic Arnold, head of tax investigations and disputes at Moore Stephens, says HMRC is shooting first and asking questions later: “That’s all well and good for the Treasury. However, it’s a heavy price for taxpayers to pay before they have even had a chance to put their case. Small businesses and individuals can be put under immense strain, financially and emotionally, while the process is ongoing,” he adds. Through the Counter-Avoidance Directorate, CCH’s Amy Austin notes, HMRC can issue taxpayers with APNs requiring full payment of disputed tax within 90 days, before any tribunal hearing takes place, and with no right to appeal.

UK’s rental market among worst in Europe following tax changes

The UK is now one of the worst places in Europe to invest in buy-to-let property, according to a league table produced by WorldFirst. Britain has fallen from 15th place to 25th following the introduction of stamp duty charges for landlords and cuts to tax relief on mortgage payments.

Cable calls for ‘fierce’ tax on overseas purchase of UK property

Liberal Democrat leader Vince Cable has called for a “fierce” tax on overseas residents buying British property. “Britain must end the stranglehold of oligarchs and speculators,” he said.

Wetherspoons cuts prices for tax protest

Wetherspoons will cut the price of food and drink in all 900 of its pubs by 7.5% today in a protest over VAT. “It will create more jobs and raise the amount of taxes which the government receives, since pubs and restaurants pay more taxes and create more jobs than supermarkets do. It is a win-win situation for the government and our industry,” chairman Tim Martin said.

France’s Macron Defends ‘Multilateralism,’

French President Emmanuel Macron delivered an emphatic defense of multilateral diplomacy at the United Nations General Assembly on Tuesday, disagreeing with earlier comments by U.S. President Donald Trump that nations should put their own interests first. “We have allowed the idea to proliferate that multilateralism is a kind of game, a game for diplomats sitting around a table,” Mr. Macron said. “”Today, more than ever before, we need multilateralism” to address global issues ranging from war to climate change. In his speech, Mr. Macron openly disagreed with Mr. Trump on three key policy issues: the North Korea crisis, the 2015 Iran nuclear deal and climate change. On North Korea, Mr. Macron said Pyongyang’s nuclear and ballistic missile provocations are an existential threat to the world but that France’s responsibility is to work with China and Russia to resolve the crisis politically and bring North Korea to the negotiating table.

Robots to take millions of private sector jobs – survey

Some 4m British private sector jobs could be replaced by robots in the next decade, according to a poll of business leaders asked about the future of automation and artificial intelligence by YouGov for the Royal Society of Arts, whose chief executive, Matthew Taylor, has been advising Downing Street on the future of modern work. The potential impact amounts to 15% of the sector’s current workforce and jobs in finance and accounting, transport and distribution and in media, marketing and advertising are most likely to be automated in the next decade, the research says

Sleep improves quality of life, not cash

A healthy amount of sleep has a far higher impact on wellbeing than a 50% increase in disposable income, according to a study by Oxford Economics and the National Centre for Social Research, on behalf of Sainsbury’s. Ian Mulheirn, director of consulting at Oxford Economics, said: “The analysis within the Sainsbury’s Living Well Index reveals that, in a world that’s never been more connected, the richness of our relationships and support networks remains among the biggest determinants of how well we live, and represents an area of our lives in which we can act”.

Tata and ThyssenKrupp agree steel merger

India’s Tata Steel and German rival, Thyssenkrupp, have taken the first step towards merging their European steel operations. The tie-up will lead to job losses, to be shared between the two companies. The deal would create Europe’s second-largest steel group, after ArcelorMittal.

Business leaders still backing London

New CBI research has found that nine in 10 of the capital’s business leaders still have confidence in the City as a base for their operations, despite Brexit-related risks, with the technology and creative sectors cited as key areas for UK growth. Jeff Kelisky, CEO of Seedrs, said that a combination of a modern and progressive attitude to financial regulation, strong financial and technical talent, and the UK’s convenient time zone between the US and Asia, “has made London a natural base for some of the most exciting hyper-growth tech companies in recent years”.

Number of UK workers on zero-hours contracts falls

The ONS has found the use of zero-hours contracts may have peaked in the UK, with a tighter labour market a possible reason for the first fall in the number of people employed on the deals since 2011.

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