Business news 22 August 2023
James Salmon, Operations Director.
SMEs could hire 3.5m workers this quarter. Britons urged to ‘pay bills on time’ in HMRC crackdown. Sterling has peaked, to face renewed pressure. Labour: UK growth will be slowest in G7. Core UK inflation has begun to fall in past 2 months. And more business news that we thought would interest our members.
SMEs could hire 3.5m workers this quarter
Research from Barclays suggests UK small and medium-sized businesses (SMEs) could hire as many as 3.5m people in the next three months. The bank found that UK SMEs on average plan to hire 2.46 employees in the coming quarter, which would equate to 3.5m hires across all companies of this size.
Britons urged to ‘pay bills on time’ in HMRC crackdown
New figures from HM Revenue and Customs (HMRC) show the tax authority has increased the number of tax investigations undertaken by 21% over the pasts two years. HMRC was able to generate £814bn in tax revenue last year – an increase of 11.3% compared to the year before – thanks in part to this rise in compliance activity. Seb Maley, the CEO of tax insurance provider Qdos, warns that small businesses and freelancers are more likely to be hit by HMRC’s more aggressive approach. He explained: “HMRC is clearly on a mission to increase tax receipts and we’re seeing first-hand experience of this. The number of self-employed workers being investigated by the tax office is noticeably on the rise.”
Sterling has peaked, to face renewed pressure
As consumer resilience falls amid rising mortgage rates rise and house prices stumble foreign exchange analysts are predicting increased pressure on the pound. Dominic Bunning, head of European foreign exchange research at HSBC, said: “We have been bullish on the pound since November last year, with a forecast it would hit $1.30. Having breached that level – briefly – last month, risks are building that it may now represent the peak in the currency rather than a more sustainable level beyond the end of the drizzly summer.” JP Morgan and Nomura also expect sterling to fall, citing falling UK factory gate prices and the effect of persistently high inflation on consumer spending.
Labour: UK growth will be slowest in G7
Labour analysis of the latest economic forecasts predicts that UK growth will be the slowest in the G7 in 2024. Party leader Sir Kier Starmer said the economy was “stuck in a low-growth trap” that had led to higher taxes, higher prices in the shops, and the British people worse off. If the economy had been in a similar position in the early 1980s, Starmer said he would not have been able to go to university as he accused the Government of “holding back” ambition and talent and “choking off the dreams” of a generation.
Core UK inflation has begun to fall in past 2 months, ONS research finds
An in-depth analysis of inflation data by the Office for National Statistics has found that core inflation had dropped to 6.8% in July, down from 7% the previous month and 7.3% in May. This contrasts with last week’s data showing the measure stuck at 6.7%. The new ONS methodology works out the “common trend component” which strips out the volatility across all goods and services. Restaurant prices over the past decade were the best guide for the general inflation rate of the British economy, the statistics office said, mainly because they were highly responsive to energy, rent and wage bills. Yael Selfin, chief economist at KPMG UK, said that while the “new measure is pointing at a small ease in inflation, we are still some way from reaching the Bank’s 2% target”.
PM gets no credit for recent fall in inflation
A poll by YouGov reveals that just 8% of voters believe government actions and policies were responsible for the recent fall in inflation. Only 17% believed the falling rate of price increases could be attributed to actions by the Bank of England, which has now hiked interest rates to 5.25%. Researchers found that most people, 38%, believed inflation had fallen due to outside factors, such as the drop in global oil and gas prices, while 31% said they did not know what was causing it.
Government debt
UK Government Borrowing was lower than expected in July, despite rising from the same point a year earlier. Borrowing rose to £4.3bn last month, according to the Office for National Statistics. That was £3.4bn more than a year earlier and the fifth-highest figure for July since monthly records began in 1993. However, the figure was below analysts’ forecasts of about £5bn.
Government borrowing between April and July however, was £56.6 billion, below official forecasts. The revised first quarter figures showed the total size of the Treasury’s debt never actually exceeded the size of the economy (national GDP), a milestone it had been assumed we had passed.
UK petrol prices top 150p a litre
The average cost of petrol at UK forecourts has risen to above 150p a litre for the first time since the start of the year, according to the AA. Petrol is now 150.51p a litre, the highest level since early January, and diesel has risen to 152.41p a litre. Global production cuts drove up the cost of oil over recent months before easing earlier in August. “Wholesale cost increases appear to have peaked for the moment but the fallout from the recent surge is still finding its way to the pumps,” said Luke Bosdet, a spokesperson for the motoring group.
UK landlords face £3bn hit as WeWork teeters on the brink
British landlords are exposed to more than £3bn in rental commitments from WeWork as the work space provider warns of “substantial doubts” over its ability to keep operating. The company, which takes long leases from office providers and sublets them on monthly contracts, has struggled since the pandemic ended with the rise of working from home and a surplus of office capacity.
Microsoft & Activision
The tech giant’s acquisition of the gaming super power is back on after the UK’s competition authority opens a fresh review of the revised deal that’s been negotiated. The CMA will report by 18th October.
Arm
UK based chip designer Arm, currently owned by SoftBank Group, has filed for an IPO that could be the biggest of 2023 in the US. Opting for a listing on the Nasdaq exchange , the IPO is set to take place in September at a valuation of between $60bn-70bn.
CBI to step back from boardroom diversity initiative
The Confederation of British Industry will step back earlier than planned from its role in the Change the Race Ratio campaign, which champions racial and ethnic minority representation on UK company boards and leadership teams. The move comes after the campaign’s most powerful signatories, including Aviva, Schroders, Sage and Big Four giants EY and Deloitte pushed for ties with the business lobby group to be cut following a sexual misconduct scandal. “In line with an agreed long-term plan, the campaign will now be established as an independent entity,” a CBI spokesperson said.
Fake websites attempt to sell Wilko goods
Wilko has stopped all online sales, home deliveries, and click and collect services after calling in administrators from PwC earlier this month. But fake Wilko websites have popped up to scam online shoppers, offering heavily discounted goods. Administrators have cautioned consumers about the scams and said they are working with the relevant authorities to have these websites removed. The retailer’s collapse has put the future of its 400 shops and 12,500 workers at risk.
FTSE 100 bosses given average 16% pay rises
Bosses at Britain’s biggest companies were paid a median £3.91m each last year, a £530,000 rise from the previous year. The 16% pay rise drove their earnings to 118 times that of the median UK worker, according to research from the High Pay Centre. “At a time when so many households are struggling with living costs, an economic model that prioritises a half a million pound pay rise for executives who are already multi-millionaires is surely going wrong somewhere,” said High Pay Centre Director Luke Hildyard. Also commenting is Gary Smith, General Secretary of the GMB trade union, who said: “While workers in sectors across the board were forced onto picket lines to make ends meet, these top brass were trousering fortunes. If Ministers genuinely think high wages are going to cause spiralling inflation, they probably need to think about curbing pay at the top of the tree, rather than everyone else.”
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Why should you become a CPA member!
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.
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.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!
No face-to-face meeting required – 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 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.