Business News – 24th May 2017

European and U.K. shares rose, with French shares among biggest advancers as eurozone economic activity remained at a six-year high. With the rest of europe resilient.

U.S. shares rose for the fourth day in a row as they continued to recover the ground they lost last week, with major indexes approaching record highs again. Most of the gains went to banks, which surged as bond yields jumped. This will allow them to charge higher rates on loans.

Government borrowing was at its highest April level for three years, according to the latest figures from the Office for National Statistics (ONS). Public sector net borrowing, excluding public sector banks, was £10.4bn last month, up by £1.2bn from April 2016. Public sector net debt was £1.72tn, equivalent to 86% of GDP, an increase of £114bn on April 2016.The ONS also adjusted the shortfall total from the last financial year from £52bn to £48.7bn.

Oil prices rose, supported by confidence that an OPEC-led output cut aimed at tightening supply would be extended to all of 2017 and the first quarter of next year.

Gold held steady, after slipping in the previous session, as investors awaited cues on the U.S. Federal Reserve’s rate hike stance from the minutes of its last meeting.

New angel investor looks to those left behind

Debt collection entrepreneur Jamie Waller is moving into the investment business after selling his firm last year. He has set up Firestarters, a £14m fund focussing on backing start-ups normally overlooked by early-stage investors. He complains that the UK “start-up world is getting out of control” with glossy presentations of unsubstantial business ideas luring cash at the expense of less glamorous but more promising alternatives.

The Times, Page: 49

CivilisedBank gains licence

Digital-only lender CivilisedBank has been granted a banking licence from the Bank of England’s Prudential Regulation Authority. The bank is backed by investment manager Warwick Capital Partners and will focus on small businesses. CivilisedBank wants to combine a mix of face-to-face visits in major cities with its web-based system.

The Daily Telegraph, Business Page: 5   Financial Times

Weak men more likely to be socialists

Research by academics from Brunel University in London suggests weaker men are more likely to be in favour of redistributive taxation while the strong are far less likely to see the virtue of egalitarian social policies. Michael Price, from Brunel, said: “This is about our Stone Age brains, in a modern society. Our minds evolved in environments where strength was a big determinant of success.”

The Times, Page: 22

Unions say zero-hours proposals are weak

Unions have said proposals in a government-commissioned review led by Mathew Taylor to give workers on zero-hours contracts the right to request guaranteed hours do not go far enough and that business will too easily be able to dismiss them. The Low Incomes Tax Reform Group points out that non-standard forms of work such as zero-hours contracts provide employers with the opportunity to minimise tax or try to avoid HMRC administration, while the GMB’s Tim Roache said employees making noises about their rights will “simply find they don’t get any hours next week.” The CBI backs the proposals but said the right to request fixed hours should not undermine “workers’ options or the enforcement of the minimum wage.”

The Guardian     The Daily Telegraph, Business, Page: 3

HMRC underlines further signs of property slowdown

The number of residential property transactions in the UK dropped by 22.5% between March and April, according to HMRC, with analysis by data firm Equifax suggesting mortgage sales declined by 16% over the same period. As a result of the stamp duty increase, HMRC said, the number of sales fell from 107,090 in March to 83,010 in April on a non-adjusted basis. Once seasonal factors are taken into consideration the number of transactions fell by 3.2%.

Daily Mail, Page: 42   BBC News

Landlords face stark choice after tax hikes

As a result of the gradual phasing out of mortgage tax relief in the UK, 16% of landlords believe they will be pushed into a higher tax bracket, up 7% in comparison to the fourth quarter of 2016. According to the National Landlords Association (NLA), those landlords renting out a single property who were forced up a tax bracket would need to increase the rent by over 11% in order to continue to make a steady yield from the property. The NLA has predicted that many landlords may end up selling their properties rather than continuing to let them, potentially affecting 368,000 homes, with young couples and families at the most significant risk.

Residential Landlord

Drive for manufacturers to claim R&D tax relief

EEF has announced a partnership deal with R&D tax relief specialist Jumpstart, with the aim of providing expert advice for manufacturers to secure their full entitlement of R&D tax relief. Last year, UK manufacturing companies claimed £770m through the tax credit scheme, but EEF remains concerned that a significant number of companies are either not taking advantage of the scheme at all, or are not maximising their value.

The Scotsman, Page: 35

Regional tax and spending breakdown published

Data from the ONS illustrate how Britain’s less well-off regions are subsidised by the London economy, which generates a £26.5bn surplus. People in London, the South-East and the East of England all generate more in tax revenues than they receive in public spending with Londoners providing a £3,070 surplus per head. By contrast, spending exceeded tax revenues by £5,440 per head in Northern Ireland and by £3,820 in the North-east. Scotland ran a deficit of £2,830 a head. Overall, the UK ran a deficit of just over £72bn in 2015-16 – or £1,100 per head, the ONS said.

The Guardian, Page: 23   Financial Times, Page: 1   Daily Mail, Page: 22

Previous News pages

Business News – 23rd May 2017

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