Business news 23 June 2022

James Salmon, Operations Director.

UK inflation hits 40-year high as food prices jump. “We have got to cut taxes to get out of this downturn,” says CBI president. Teachers join railway workers in call for pay rise. Rampant inflation burns through savings. Are you prepared for a surge in late payments?  And more business news.

UK inflation hits 40-year high as food prices jump
Figures released from the Office for National Statistics on Wednesday show inflation reached a 40-year high of 9.1% last month, driven by rising food and fuel prices. The price growth in May, up from 9% in April, was in line with economists’ expectations. The Bank of England expects the inflation rate to exceed 11% in October, when households receive their energy bills. Yael Selfin, chief UK economist at KPMG, said there were “no signs yet of inflation receding” and that while the largest increases were in energy and road fuels, “price rises spread widely across the economy”. Paul Dales, chief UK economist at Capital Economics, said it was not obvious in the latest data that there were signs of the “more persistent inflationary pressures” that the central bank last week said would prompt it to “act forcefully”.

“We have got to cut taxes to get out of this downturn,” says CBI president

Lord Bilimoria, the outgoing president of the Confederation of British Industry (CBI), has warned that Britain is definitely heading for a recession following the latest inflation data from the Office for National Statistics. In an interview with the Telegraph, Bilimoria says the answer is to cut taxes – more fuel duty cuts and VAT should be cut back from 20% to 5% again for hospitality, replicating the pandemic measure that was restored in April. “The danger of not helping is far worse than the cost of helping,” he says, warning of more “failing businesses and bankrupt individuals” in a deeper recession. The Chancellor needs to stop making the situation worse, Lord Bilimoria continues: “To have the highest tax burden in 70 years I think is absolutely wrong.” It is also wrong to put up corporation tax “in one swoop” from 19% to 25% while the 2.5% increase in National insurance is a tax on jobs – also the wrong thing to do. “This is the time we have got to cut taxes to generate investment and generate growth, because that is what is going to get us out of this.”

Teachers join railway workers in call for pay rise
As talks with rail unions fail passengers are bracing for a fresh wave of strikes in two weeks’ time. The walkout by the Rail, Maritime and Transport union (RMT) meant large parts of the country were brought to a standstill on Tuesday and passengers have been told to avoid trains on Thursday. Talks on Wednesday between the RMT and Network Rail broke down with the union’s leader Mick Lynch accusing Transport Secretary Grant Shapps of wrecking negotiations by blocking Network Rail from withdrawing a letter threatening statutory redundancy for up to 2,900 RMT members. Mr Shapps said that claim was a “total lie”. Meanwhile, the National Education Union has become the latest union to demand an “inflation-plus” pay rise, warning that it would ballot on striking at the beginning of the next school year if its demands were not met. The Education Secretary, Nadhim Zahawi, said that it would be “irresponsible” and “wrong” to make children endure more disruption after the pandemic. A second education union, the National Union of Schoolmasters Union of Women Teachers, has also said it will ballot its members for industrial action if staff are not given a 12% pay rise.

Rampant inflation burns through savings
Soaring inflation has meant household savings are being eroded at the fastest pace in 50 years. A saver with £10,000 in an easy access account paying the average market rate of 0.34% would accrue just £34 in interest over a year. But the real value after 9.1% inflation would be £9,197 – a loss of £837, reports the Telegraph’s Rachel Mortimer. Kevin Brown, of investment group Scottish Friendly, said: “The gulf between interest rates and inflation hasn’t been this profound since the early 1970s.”

US Recession

Federal Reserve Chair Jerome Powell acknowledged that the interest-rate hikes being used to curb inflation could tip the US economy into recession and called a soft landing “very challenging.” He told  a Senate hearing that the Federal Reserve is “strongly committed” to bringing down 40 year high inflation, adding that Russia’s invasion of Ukraine and continuing covid-19 lock-downs would continue to push inflation up. But he countered that America’s economy was strong enough “to handle tighter monetary policy.”

Sri Lanka’s economy has “completely collapsed”
Sri Lanka’s economy has “completely collapsed”, the country’s prime minister Ranil Wickremesinghe has said. International Monetary Fund officials flew in this week and talks are underway while Sri Lanka said it would also seek help from India, Japan and China along with the US.

Are you prepared for a surge in late payments?

As inflation rises and interest rates creep up, late payments are expected to grow significantly!

UK businesses are especially going to feel the pressure, with no protection from rising energy costs, supply chain disruption exacerbated by Brexit and the danger the economy could fall into stagflation!

About six in 10 companies say they are worried that the risk of late payments will grow this year, according to Intrum’s annual European Payment Report 2022, which surveyed 11,000 companies across 29 European countries.

A third of respondents say that late payments are prohibiting growth of the company, hampering the economic and social development of the economy.

Eddie Nott, MD for Intrum UK, says that more than half of businesses expect late payments to jump this year, but “a similar proportion say they do not have the in-house expertise needed to successfully manage the impact of inflation on their business”.

House price growth soars as buyers race to lock in cheap deals
The average UK house price surged by 12.4% in April, up from 9.7% in March, according to the Office for National Statistics. Average values jumped to £281,000 in April, £31,000 higher than this time last year. In Wales and Scotland, house price growth hit 16.2%. In England, the rate was 11.9%, while Northern Ireland recorded 10.4% growth. The South West had the fastest price rises of any region in England, with growth at 14.1%, while London recorded the slowest pace of growth at 7.4%. However, due to a lag in ONS, data the figures do not reflect the current state of the cooling market. Andrew Montlake, of mortgage broker Coreco, said: “This data is not a true reflection of where the market is at right now. The era of ultra-cheap money is finished and that will soon start to feed through into house price growth.” In the six months to May, the average rate on a two-year fixed-rate mortgage with a 25% deposit has surged from 1.57% to 2.63%. Pantheon Macroeconomics forecast this will hit 3.7% by the end of this year. It expects house price growth to fall to 5% over the same period.

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 charge our members a fixed annual subscription irrespective of how high the debt value is!

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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 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.