business news 23 September 2021
James Salmon, Operations Director.
UK home to more small businesses than any other country in Europe. Manufacturers report rising new orders. Artificial Intelligence. Energy Companies. BoE could be swayed by public inflation fears and more business news.
UK home to more small businesses than any other country in Europe
British entrepreneurs created 265,255 micro enterprises in 2013 with 114,590 of these surviving for five years, more than any other country in Europe. Although this means that the UK has a five-year survival rate for its micro enterprises of 43%, their surviving businesses more than double those of any other country. A micro enterprise has one to nine employees. The countries with the most micro enterprises after five years were the UK, Turkey, France, Italy and Spain.
Manufacturers report rising new orders
The Confederation of British Industry’s monthly manufacturing order book balance rose to +22 in September from +18 in August, its highest level since records started in 1977. However, global supply chain problems and labour shortages held back growth in output. “Today’s survey highlights how amidst a variety of supply challenges, companies are beginning to struggle to meet high demand,” CBI deputy chief economist Anna Leach said. “Despite close to half of manufacturers surveyed reporting order books above normal, output growth has slowed sharply, albeit remaining relatively robust.”
Artificial Intelligence
The Government outlined a 10-year plan yesterday to make the country a leader in Artificial Intelligence (AI), in a bid to draw in foreign investment and shape the way it is regulated globally. In the country’s first AI strategy, which comes amid London Tech Week, the UK has proposed a new white paper on AI regulation.
Energy Companies
The growing list of bust energy suppliers is hitting homes as over 1.5 million households are now estimated to be searching for new providers after theirs went bust, with 7 having now failed since August as they are caught between rising wholesale prices and the Government’s price caps.
BoE could be swayed by public inflation fears
A Citi/YouGov survey has found Britons are becoming increasingly worried about inflation with expectations for the next 12 months rising to 4.1% from 3.1% in August. It was the biggest monthly increase since the survey began more than 15 years ago and was the highest level since 2008. Longer-term inflation expectations, for the next five to ten years, rose from 3.5% to 3.8%, the highest level since 2013. “The data, especially the movement in long-term expectations, suggest growing risks that inflation expectations could become de-anchored to the upside,” Citi said. “The sharp increase risks a hawkish response from the [Bank] this week.”
British Business Bank seeks more regional development funds
The British Business Bank wants the Chancellor to increase its regional development funding to support the Government’s “levelling up” agenda. It also wants to extend the start-up loan programme. The Times reports that the agency reported a gain on its investment assets of £223m this year, up from a loss of £3m last year, largely thanks to rapid growth in the value of equity stakes in promising technology businesses
Financial fraud costs victims £4m a day
More than £4m on average was stolen by fraudsters every day in the UK during the first half of the year as losses skyrocketed during the pandemic. Fraud committed when individuals are tricked into handing over money and personal details surged by 71% compared with the first six months of last year. Less than half of the money lost in these cases was refunded by banks. In total, £754m was stolen through fraud in the first half of the year, an increase of 30% compared with the same period last year. Within this total, so-called authorised push payment (APP) fraud – when victims think they are paying a genuine organisation – rose by 71% to £355m.
Kwarteng mulls windfall tax on energy companies
Kwasi Kwarteng told the business select committee on Wednesday that the Government is considering a windfall tax on energy generating and trading companies that profit from increases in gas prices. The business and energy secretary warned MPs that preparations were being made for gas prices to remain high for some time. He added: “I’m not a fan of windfall taxes, let me just get that straight – but of course it’s an entire system and we have to think of how we can get the whole system to help itself.” His comments come as two more suppliers collapsed, bringing the total to seven in a little over six weeks.
Derby County enter administration
Derby County have formally entered into administration after owner Mel Morris failed to find a buyer willing to spend £50m to clear the club’s debts. Derby will be automatically deducted 12 points under EFL rules, sending them to the bottom of the table but a further points deduction is on the cards due to irregularities in the club’s accounts. A statement from the club said that Andrew Hosking, Carl Jackson and Andrew Andronikou of business advisory firm Quantuma would serve as joint administrators.
Yellen stresses need for UK to withdraw digital services taxes
U.S. Treasury Secretary Janet Yellen reportedly spoke with the Chancellor Rishi Sunak on Wednesday. They talked about global tax reform efforts and the need for a compromise on withdrawal of digital services taxes, the Treasury said.
Royal Mail
Royal Mail said it expected stronger performance in the second half of the year compared to first, even as parcel volumes normalises following a boost from the pandemic, and costs rise. ‘The first five months saw continued revenue growth across the group, with both Royal Mail and GLS reporting higher revenues than the prior year,’ the company said.
Mitchells & Butlers
Mitchells & Butlers said that in the 18 weeks since full indoor trading reopened like-for-like sales have been 97% of pre-pandemic levels. That followed an improvement since the last update in the most recent 8 weeks to 104%. Total sales year to date, including 18 weeks of pandemic-enforced closures, are at 45% of pre-pandemic levels, the company said.
DFS
DFS said this morning it is still struggling with disruption in its supply chain, even as it reported a 47 per cent jump in revenue and swung to a profit. Revenue hit £1.1bn in the year to the end of June, up from £725m a year earlier, and even stronger than the £996m made in the year before that, prior to the pandemic.
FED tapering
The US Federal Reserve has said he could start tapering its asset purchases in November and wind down by Mid 2022 with possible interest rate rises to follow as inflation concerns persist.
US steps closer to delisting Chinese companies for audit violations
The U.S. audit watchdog, the Public Company Accounting Oversight Board, on Wednesday adopted a new framework that would help it implement a law banning foreign companies from U.S. exchanges if their auditors haven’t been inspected by American regulators. The move threatens hundreds of China-based businesses which the Chinese Communist Party bans from making their auditing results available. Jeff Mahoney, general counsel for the Council of Institutional Investors, which represents pension funds and other large money managers, said the rule benefits investors because it improves transparency and reduces regulatory uncertainty. And although company delistings could cause some investors to suffer losses, “the alternative of letting one country ignore our federal securities laws is worse for investors and the capital markets in the long run.”
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 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
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
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.