Business news 22 February 2024

Recession may already be over, Manufacturing, Banking charges, fire & rehire rules, stressed staff, hospitality crisis & more business news that we thought would interest our members.

James Salmon, Operations Director.

Recession may already be over

Bank of England governor Andrew Bailey says the recession may already be over, with the economy showing “distinct signs of an upturn.” He told MPs that by historical standards “this is the weakest recession by a long way.” Office for National Statistics data shows that the economy shrank by 0.3% between October and December, having already contracted in the third quarter. Ben Broadbent, the Bank’s deputy governor, said the definition of a recession as two successive quarters without growth is “unhelpful,” noting that other countries calculate it differently. Mr Broadbent went on to tell MPs that interest rate cuts are possible this year, saying: “In my view that is the more likely direction in which Bank rate is likely to move.” He added: “But even if that proves to be the case, the timing of any adjustment can only depend on the actual evolution of the economic data.”


UK Manufacturing dropped in the three months to February, while prices are expected to head upwards, according to CBI data. CBI’s Industrial Trends Survey said a net balance of 19% of manufacturers saw a fall in output over the quarter to February, worsening on the 10% reported in the three months to January.

High banking charges hinder SME expansion

A study of 3,000 small business owners has found that high banking charges are a bigger obstacle to international expansion than Brexit red tape. Last year, UK small businesses lost £2.8bn to hidden fees, preventing 69% from expanding further. Business owners said they struggle to compare the market due to a “corporate opt out” that allows banks to hide their fees in the exchange rate. Wise, an international account provider, is calling on ministers to end the opt out and ban hidden fees for businesses and consumers. Two-thirds of business leaders agree that the opt out should be removed and that regulation should encourage banks to be transparent about international payment costs. Further research shows that if the cost of international banking services were reduced, 34% of SMEs would enter new markets and 27% would hire more staff.

Drop in high-growth companies as UK small businesses struggle with productivity

A study by Goldman Sachs and the Enterprise Research Centre reveals that while there has been a jump in business creation in the UK, there has been a drop in the number of high-growth companies. The report suggests that poor productivity in small enterprises is a significant factor in the nation’s economic problems. Since 2008, around 400,000 businesses have been added to the economy, but there are 3,000 fewer productive and fast-growing companies. The number of small businesses achieving productivity growth has been stagnant in recent years. If the number of fast-growth companies had kept pace with levels before 2007, £106bn would have been added to private sector revenue and there would be 90,000 more jobs.

Guidance sets out fire and rehire rules

The Government has announced new measures around the use of fire and rehire practices, with a new code of practice setting out guidance on the use of the tactic. The new code, which has been drawn up by the Department for Business and Trade and is subject to parliamentary approval, would give employment tribunals the power to apply an uplift of up to 25% of a person’s compensation through any unreasonable lack of compliance. The guidance says employers should explore alternatives to dismissal and have meaningful discussions with employees or trade unions to reach an agreed outcome. Business Minister Kevin Hollinrake said the code “will crack down on employers mistreating employees and sets out how they should behave when changing an employee’s contract.” TUC general secretary Paul Nowak has warned that the code “lacks bite” and is not going to deter bad employers from treating staff like “disposable labour.” Calling for “far more robust legislation to protect people at work,” he commented: “One in 10 were threatened with fire and rehire during the pandemic – tinkering around the edges is not going to cut it.” Unite said the suggestion that a code of conduct is going to stop employers opting for fire and rehire “is just a bad joke.”

UK employers offer smaller pay rises at the start of 2024

Analysis by HR data company XpertHR shows that British employers scaled back the annual pay settlements they offered to staff at the start of 2024, with the median pay settlement during the three months to the end of January falling to 5.1% from 6% during the October to December quarter. Sheila Attwood, senior content manager at XpertHR, said: “Around half of employee groups are receiving settlements worth less than their previous award, where high awards were provided to account for the rising cost of living affecting UK employees at the end of 2022 and throughout 2023.”

Half of staff feel stressed at work

Just over half (52%) of workers in Britain have reported feeling stressed at work, with the health and social work sector ranking as the most stressful. A new study looking at data from the Health and Safety Executive found that this industry had the highest number of stress-related illnesses per 100,000 workers. The industry has faced challenges such as staff shortages, low pay, and the impact of the pandemic. Other industries that ranked high in stress levels include public defence – including security guards and prison officers; the professional, scientific and technical industry, which includes vocations such as solicitors and barristers; and the finance industry, including accountants and bankers.

Hospitality firms running out of cash reserves

Thousands of pubs, restaurants, and hotels in the UK are facing a cash reserves crisis, leaving them in a perilous state, according to a joint survey by trade bodies. The survey found that a quarter of venues have exhausted their cash, making them extremely vulnerable to any shocks. The closure rate in the hospitality sector could increase from 2.9% last year to 5-6% this year if changes are not made. The top priority for the industry is a lower rate of VAT for hospitality. The survey also revealed that a further 29% of venues have less than three months’ worth of reserves. The hospitality industry is urging the Government to act before the budget on March 6 to avoid further closures and inflationary price rises.

UK officials recommend extending post-Brexit steel quotas

Whitehall officials have recommended extending post-Brexit steel quotas, providing relief to the British steel industry. The “steel safeguards” were first introduced by the EU in 2018 to prevent excess steel dumping from countries like China. The UK adopted these safeguards after leaving the EU and extended them in 2022. The Trade Remedies Authority (TRA) has recommended another extension until June 2026, protecting the UK steel industry from a flood of imports. The safeguards cover 84% of five UK producers’ £5bn turnover, imposing tariffs on 15 categories of steel products if imports exceed set quotas. The UK steel industry is facing pressure due to a global recession in demand, and the closure of blast furnaces at Tata Steel and British Steel. UK Steel, a lobby group, welcomed the TRA’s recommendation, saying the safeguards are necessary to protect the UK from trade diversion.

Brexit red tape costs UK food exporters £170m in extra export costs

Data shows that Brexit red tape has resulted in UK food exporters paying an extra £170m in export costs, leading to a 17% drop in the value of meat exports since 2019. Exporters of foods of animal origin have had to pay for sign-offs by vets before sending their shipments to the EU, causing a sharp fall in exports, particularly among smaller producers. The extra costs have been described as “catastrophic” for some exporters. The requirement for export health certificates has also raised fears that some EU exporters might abandon exporting to the UK. The added costs have hurt small businesses the most, making it harder for them to send small mixed consignments to the EU. The extra costs have resulted in smaller profits or higher prices for consumers.


Heathrow Airport has returned to adjusted profit for the first time since the pandemic thanks to a bounce-back in international travel. The owners of the largest UK airport reported an adjusted pretax profit of £38 million in 2023, against a loss of £684 million the previous year and marking the first time it has made a profit since 2019.


Amazon is joining the Dow Jones index, replacing Walgreens Boots Alliance in the 30 stock index on 26/2/24.

BT Tower

BT Group said that it has agreed to sell the BT Tower to MCR Hotels, which plans to preserve the building as a landmark hotel. According to the London-based telecommunications operator, the £275 million sale to the American hotel owner-operator is reflective of a wider digital shift. A number of network operations that were traditionally carried out from the building are now delivered via fixed and mobile networks.


Nvidia the maker of AI enabling chips doubled its turnover to $60.9bn last year with revenues jumping 265% to $22bn in the quarter ending 28th January. They also forecast the current quarter to jump 233%. “Accelerated computing and generative AI have hit the tipping point,” said Nvidia chief executive Jensen Huang.

Nvidia’s stock market value has soared by 225% over the last year, making it one of the most valuable companies in the US. Its share price jumped by more than 9% in extended US trading.


Japan’s Nikkei 225 stock index reached an all-time high, surpassing its previous record in 1989. The cheap yen and rises in chip-related shares have attracted foreign investors again, making it the world’s best-performing major index.


Lloyds Banking reported a profit and revenue rise during a “critical year” for the lender, though it set aside £450 million following a UK watchdog review into historic motor finance agreements. Lloyds said net income grew 2.7% to £17.93 billion from £17.47 billion. Included in that top-line rise was a 4.5% increase in underlying net interest income to £13.77 billion. Lloyds said pretax profit surged 57% to £7.50 billion from £4.78 billion

The Body Shop to shut up to half of its UK stores

The Body Shop is set to shut up to half of its UK stores and cut the size of its head office, with administrator FRP Advisory saying this will “help re-energise” the brand and secure the future of the business. The Body Shop said that following “years of unprofitability” and a full evaluation of its UK business, administrators “have concluded that the current store portfolio mix is no longer viable.” The statement noted that more than half of its 198 UK stores are expected remain open at the conclusion of the restructuring, while headcount at its head office is expected to reduce by approximately 40% to around 400 staff. The Body Shop currently employs around 2,200 people in the UK, including 750 staff at its head office.

Record surplus prompts tax cut calls

Government finances show that the surplus – the difference between spending and tax income – rose to a record high of £16.7bn in January. Jessica Barnaby, deputy director for public sector at the Office for National Statistics, said: “Overall expenditure was down on this time last year, despite increased spending on public services and benefits.” While the size of the surplus is likely to fuel calls for tax cuts in the forthcoming Budget, Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the figures were not big enough for a “Budget bonanza.” She added that while it offers the Chancellor “a few inches of headroom,” it is “not enough for a Budget of dramatic tax cuts.” Laura Trott, Chief Secretary to the Treasury, commented: “While we will not speculate over whether further reductions in tax will be affordable in the Budget, the economy is beginning to turn a corner, with inflation down from over 11% to 4%.” Martin Beck, chief economic adviser to the EY Item Club, said: “The Chancellor will have room to manoeuvre, but major tax cuts are looking less likely,” while Gora Suri, an economist at PwC, suggested: “The Chancellor may have more headroom than the Office for Budget Responsibility expected in November … but lower tax revenues from a smaller cash economy may push headroom down.” John O’Connell, chief executive of the TaxPayers’ Alliance, commented: “A record high tax burden is filling the Treasury’s coffers like never before, as inflation and frozen thresholds drag millions more into higher bands.” He argues that the Chancellor “needs to give taxpayers the break they deserve and cut income tax” in March’s Budget.

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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.

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.


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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.