Business news 24 October 2023
James Salmon, Operations Director.
Banks fail to pass on £7.5bn in interest each year to SMEs. Britain’s credit rating stable.Full-time office workers back in the majority. And more business news that we thought would interest our members.
Banks fail to pass on £7.5bn in interest each year to SMEs
Small and medium-sized businesses are losing out on £7.5bn each year because banks are failing to pass on higher interest rates to companies with savings. A study of the business savings market by Allica Bank found that banks are “systematically” offering larger companies better savings rates while small firms have £150bn of deposits sitting in accounts offering no interest at all.
Average savings rates for smaller companies are 2% lower than for their larger counterparts, costing them £2.5bn a year. When combined with money in accounts offering zero interest, small and mid-sized groups are being denied £7.5bn annually. Richard Davies, chief executive of Allica, said the situation was a scandal and called on the Treasury select committee to investigate. Craig Beaumont, of the Federation of Small Businesses, said that with companies “under significant pressure” because of the difficult economic environment, “the least your bank should do at a time of high inflation is provide a fair rate of interest. Small business owners should look at their current arrangements and shop around.”
Unemployment
The UK Unemployment Rate for the period for June to August was estimated at 4.2%. This was a 0.2 percentage point increase compared with the period from March to May, the ONS said.
The ONS explained that the figures are an “alternative series of estimates”, due to “increased uncertainty” around the Labour Force Survey estimates. It had delayed the release by a week due to a low response rate for the survey. Last month, the ONS said unemployment stood at 4.3% in the three months ended July.
Britain’s credit rating stable
Moody’s Investors Service removed its negative credit outlook on the UK, while Standard & Poor’s maintained a stable outlook, in a much-needed boost for Prime Minister Rishi Sunak. The credit assessors indicated Britain is not at risk of losing its rating, which is AA at S&P, the third-highest level, and Aa3 at Moody’s, the fourth-highest. “Policy predictability has been restored,” Moody’s said.
Full-time office workers back in the majority
Full-time office workers now outnumber hybrid staff for the first time since the pandemic, according to new research by recruitment giant Hays. Some 43% of office workers are now going in five days a week compared to just 39% who say they are spending only a few days with colleagues.
This time last year, only 36% of employees said they were going into the office full-time, while 43% were following a hybrid work pattern.
Additionally, one in six workers – 18% – are still fully remote, down from 21% a year earlier.
Treasury yields rise as inflation sticks
Yields on 10-year US Treasuries rose above the 5% mark on Tuesday, its highest level since July 2007. Despite the rise in interest rates over the past 18 months, stronger than expected US retail sales, labour market and inflation data in recent weeks have helped push yields higher. Meanwhile, yields on 30-year British government bonds rose as high as 5.209%, the highest since the summer of 1998. As with the US, growing signs that inflation is proving to be more persistent than expected is prompting investors to demand higher returns, particularly on longer-dated government debt.
Bitcoin
Bitcoin has rallied to a 17 month high over $34,000
Barclays
Barclays beat profit forecasts in the third quarter driven by a strong performance at its credit card business but the bank said further actions may be needed to tackle costs. Revenue in the corporate and investment bank operation missed expectations and Barclays reduced its outlook for net interest margin this year to between 3.05% and 3.1%, having already cut this guidance in July. The lender said pre-tax profit in the three months ended September fell 4% to £1.89 billion from £1.97 billion the year before, although this was ahead of the £1.77 billion consensus forecast.
More workers quit corporate roles over climate
A growing number of workers are making the decision to walk out of companies whose environmental values don’t align with their own. According to research by carbon removal marketplace Supercritical, 35% of UK office workers surveyed said they were willing to quit their jobs over weak climate action from their employers. Climate campaigner Paul Polman says workers today are far more climate-aware than in the past and want to give their time and talent to companies that share their values. Climate quitters can be a powerful form of lobbying, as their public quitting can create a PR problem for companies and push them to take action. However, some workers believe staying in a job can also drive change and put pressure on companies to move in sustainable directions. Separate research by KPMG shows 20% of workers said they’d turned down a job offer when a company’s ESG commitments didn’t align with their personal values. This number rose to 33% for 18-to-24-year-olds.
Over-50s flock to hospitality sector
More than 165,000 over-50s have joined the hospitality sector workforce in the past three years, accounting for a third of the industry’s workforce. This marks a 14% increase from 2020, according to a report by Caterer.com. The report highlights the importance of age diversity in the industry and praises hospitality businesses for their age-diverse policies and hiring approaches. Many businesses have implemented policies and benefits to attract older staff, such as returner programmes and flexible working. The sector sees over-50s as crucial in addressing labour shortages. “Hospitality businesses are paving the way for other sectors with the introduction of truly age-diverse policies and hiring approaches, and the rewards are clear to see,” said Kathy Dyball, a director at Caterer.com.
City minister to meet with banks for talks on support for first-time buyers
The City minister, Andrew Griffith, is to meet with mortgage lenders within the next fortnight to discuss an extension of the Treasury’s mortgage guarantee scheme, which enables homebuyers to acquire properties worth up to £600,000 with only a 5% deposit. Banks including Barclays, Lloyds Banking Group and NatWest Group are expected to attend a discussion on how to help first-time buyers, along with Britain’s biggest building society, Nationwide. A new form of ISA which incentivises savers to put money aside to buy their first home is also under consideration, reports over the weekend revealed.
Scotch whisky-lovers hit by double tax rates compared to France
Scotch whisky-lovers in Britain are facing double tax rates compared to France, with a sharp rise in excise duty. The duty on whisky is now £31.64 a litre of alcohol, compared to £15.97 in France. The increase is one of the biggest on record and has raised concerns for the £5.5bn whisky industry. Distillers are warning that any further increases will be detrimental to the industry. The Scotch Whisky Association is urging the government to rule out any further tax rises. The Treasury has stated that Scotch has received nine cuts or freezes at the last ten Budgets.
No-fault eviction ban delayed indefinitely
Housing Secretary Michael Gove has announced that a ban on “no-fault” evictions in England and Wales will be indefinitely delayed until after the court system is reformed. The proposed law, which will ban no-fault “Section 21” evictions, was first published in May as part of the Government’s Renters Reform Bill. But Mr Gove has told Conservative MPs that the ban cannot be enacted before a series of improvements are made in the court system, which is used by some landlords to reclaim possession of their homes.
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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!
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.