Business news 25 July 2023
James Salmon, Operations Director.
Help staff stay healthy. Parents raid children’s savings. Pawnbroking loans on the rise. Sam Altman’s scheme to scan every retina in the world. UK firms grow at slowest rate in 6 months. And more business news that we thought would interest our members.
Help staff stay healthy, employers told
Research suggests weight-loss programmes and lunchtime exercise classes should be offered by employers to help tackle obesity and boost economic productivity. A study by the health insurance firm Vitality highlighted a growing expectation among Britons that their workplaces will take responsibility for keeping them healthy. As well as private medical insurance and access to GPs, employees are demanding “holistic” tools that support efforts to maintain a healthy lifestyle. This includes providing free fruit in the office, offering stop-smoking tools and encouraging people to walk up the stairs or take part in group exercise.
Parents raid children’s savings to cover higher costs
Some £4.1bn has been pulled from children’s accounts since the start of 2022 as their parents and grandparents draw on those savings to cover spiralling mortgage costs and other bills. A survey by Direct Line found one in five withdraw the equivalent of £13m from children’s accounts every day this year, with a 15% drop in the number of British children whose parents are saving for them in the last year also recorded.
Pawnbroking loans on the rise
The value of loans taken from pawn shops has surged 41% in the past year as more people battle with the surge in the cost of living. Figures from Mazars show the value of pawnbroking loans had risen from £158m to £223m last year while the number of arrears on pawnbroking loans has also jumped by a third, to £57m. Paul Rouse, of Mazars, described the rise as a concern, adding: “This is a sign that too many people are struggling.”
Sam Altman’s scheme to scan every retina in the world
The founder of OpenAI, the artificial intelligence company behind ChatGPT, on Monday launched his Worldcoin Foundation, a cryptocurrency project that requires users to first prove their identity by having their iris scanned. Sam Altman said a football-sized orb would conduct the scans to generate a unique digital record that Worldcoin calls a World ID – or “proof of personhood”. People who submit to ID-checking scans will receive 25 free Worldcoin tokens while local contractors who sign up new users will also be paid in the new cryptocurrency.
UK firms grow at slowest rate in 6 months
Britain’s private sector is growing at its weakest pace since January, according to the latest PMI survey from S&P Global/CIPS. UK Economic Activity slowed sharply in July as rising interest rates and a slump in manufacturing took its toll.
The index slowed from 52.8 in June to 50.7 in July as businesses and consumers reduced spending on non-essential services and manufacturers cut production in response to a severe downturn in orders. Although price rises are slowing, bosses warned that higher wages rather than energy prices or pandemic disruption were now driving price inflation.
The flash UK PMI services output index, a measure of activity in the sector, fell to a six-month low of 51.3, down from 53.7 in June.
Meanwhile the manufacturing output index hit a seven-month low of 46.5 (down from 48.1 in June).
Chris Williamson, chief business economist at S&P Global, said the figures show “the UK economy has come close to stalling”. Sterling and UK bond yields fell on the news as traders hoped slowing growth would limit the extent of future rate rises.
Tories going soft on Green policies
The Primeminister indicated he would delay or abandon Green policies if they led to direct costs on consumers, ahead of an election next year, as MP’s pressure the government to rethink its strategy following the Uxbridge by-election last week that was won on a fight against the Labour London Mayor’s ULEZ policy.
Rishi Sunak said “We’re going to make progress toward net zero,” when asked about the 2050 target for carbon emissions. “But we’re going to do that in a proportionate and pragmatic a way that doesn’t unnecessarily give people more hassle and more costs in their lives — that’s not what I’m interested in and prepared to do.”
Housebuilders cast doubt over UK Government plan to deliver new homes
The UK Government’s latest plans to boost new home construction have been shrugged off by housebuilders who said the measures would not substantially improve manifesto commitments on new homes
Increase in average salaries sped up again in June
The average salary advertised by employers rose by an annual 3.6% to £37,807 last month, up from a 3.3% increase in May and 2.9% in April, according to the jobs search engine Adzuna. Tony Wilson, director at the Institute for Employment Studies, said: “These figures show that despite the recent small rises in unemployment, the labour market is still incredibly tight. Vacancies remain high, jobs are being filled very quickly and salaries are still rising month-on-month. While this poses risks for future inflation, it’s also a reminder that the economy is still creating a lot of opportunities and many of them well paid.”
Pay Inequality
London’s highest income earners received the biggest pay raises since the start of the pandemic, widening the gap between the UK’s richest and poorest for the first time in two decades, according to the Institute for Fiscal Studies. Average earnings for workers in the capital city have increased 5% to £4,400 a month before tax since February 2020, almost double the 2.7% national average. The highest pay raises went to those working in business services including finance, accounting and law, which are also concentrated in London.
Twitter
Analysts say that in seeking to rebrand Twitter as X, Musk is throwing away over 15 years of branding and could be destroying value of the social media app by up to $20 billion.
UBS / Credit Suisse
The Bank of England’s Prudential Regulation Authority and America’s Federal Reserve fined UBS, a Swiss bank, a combined total of $388m for the misconduct of Credit Suisse (which UBS took over in June as part of a state sponsored rescue of the the beleaguered bank). The fines relate to mismanagement of risk during the collapse of investment firm Archgos in 2021.
Virgin Media
Virgin Media / O2 has announced it is to to cut up to 2,000 UK jobs (12% of staff). A Virgin Media O2 spokesperson said: “As we continue to integrate and transform as a company, we are currently consulting on proposals to simplify our operating model to better deliver for customers, which will see a reduction in some roles this year.”
Ryanair
Ryanair reported strong Q1 results with a 40% jump in revenues to €3.65bn and a 290% jump in net profits of €663m.
Unilever
Unilever reported a double-digit percentage rise in interim profit and a small rise in turnover in the first half of 2023. The consumer goods company reported a pretax profit of 5.27 billion Euros , up 21% from 4.36 billion Euros the year prior. Turnover climbed 2.7% to 30.43 billion Euros from 29.62 billion Euros.
OECD tax reform a ‘failure’, says Tax Justice Network
A report from the Tax Justice Network contends that countries could lose out on nearly £3.7tn in tax receipts the next 10 years if multinationals and the rich continue using tax havens. The group believes the Organisation for Economic Co-operation and Development (OECD) has failed to close tax loopholes and wants responsibility for setting global tax rules moved to the United Nations. “No significant reductions have been made in the amount of tax countries lose to global tax abuse since the start of the OECD’s efforts to reform global tax 10 years ago,” said the Tax Justice Network. The UK-based NGO said that several studies, including one by the IMF, conclude that the OECD’s draft proposals on taxing multinationals will make little to no impact on the scale of tax losses.
London office investment falls to 14-year low
New data from Costar Group show investment into the London office market fell to a 14-year low in the second quarter of the year. Just £1.2bn was spent on London offices last quarter, a 59% drop on the £2.9bn spent in the previous quarter and the fourth lowest quarterly total in the past two decades. “While overall activity is subdued, and with little sign of a rebound in the near term, the growing popularity of so-called riskier investments represents a vote of confidence in underlying fundamentals in some parts of the market,” said Mark Stansfield, senior director of UK Analytics at Costar Group.
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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.