Business news 26 April 2024
Payment Insights . Card and account complaints. Retail sales. Markets & US economy. Tax cuts boost consumer confidence. And more business news that we thought would interest our members.
James Salmon, Operations Director.
Payment Insights
Worldpay released its Global Payments Report for 2024. What were the key insights?
- Digital wallets (like Apple Pay® and PayPal®) are the people’s payment choice, dominating all other payment methods both online and at the point of sale (POS)
- Credit and debit cards continue to be strong inside and outside digital wallets. And card transaction values continue to rise, even in mature markets like the US and UK.
- Global e-com growth outpaces Point Of Sale by more than 2 to 1. In 2023, e-commerce reached 14.4% globally as a percentage of all commerce, and it’s predicted to continue growing, with e-commerce forecasted to rise 8% in Europe.
- Prepaid cards, might seem old hat but they are still popular as gifts and for budgeting and will surpass $1 trillion in 2024 globally.
- Cash remains relevant amid economic uncertainty. Cash may not be king anymore but it is stubbornly still popular, especially for low income consumers, as a budgeting tool.
Card and account complaints climbed in H2 2023
Complaints related to current accounts and credit cards increased in the second half of 2023, according to the Financial Conduct Authority (FCA). The City watchdog recorded 874,568 complaints about banking and credit cards during the period, with this up 3.2% on H1 2023. There was also a 1% increase in complaints about current accounts, with 515,336 grievances recorded in H2. Credit card complaints jumped 7.5%, hitting 217,032 in the second half of 2023, while insurance complaints increased by 1% to 281,082. Investment-related complaints saw a rise of 3.4%, with 61,446 grievances recorded in H2. However, complaints relating to pensions and insurance saw a decrease in the second half of the year. Overall, financial services firms received a combined 1.87m complaints in the second half of 2023, which was a 1% decrease compared to the first half of the year. The proportion of upheld complaints saw a drop from 61% in the first half of 2023 to 58% in H2. The FCA report also shows that around £259m was paid out in compensation in H2, marking a 10% increase compared to H1. The average payout rose to £203, up from £183 in the first six months of the year.
Retail sales fall in April
Confederation of British Industry (CBI) analysis shows that retail sales fell in April, with a gauge measuring sales volumes compared a year ago falling to -44 from +2 in March. Alpesh Paleja, the CBI’s lead economist, said: “April’s sharp fall in retail sales was likely related to the earlier timing of Easter this year, so we should take it with a pinch of salt.” However, he warned that “conditions do remain challenging on the ground,” noting that April’s fall in sales “was faster than expected and retailers aren’t overly hopeful about the month ahead.”
Markets & US economy
London bucked the global trends with the FTSE 100 up 0.4% to 8078 as investors reacted to a busy corporate earnings calendar and a £31 billion takeover offer for blue chip mining company Anglo American from Australian rival BHP.
Risk sentiment took a sharp downturn yesterday following the release of official figures show that the US economy expanded at an annualised rate of 1.6% in Q1, falling short of the 2.4% forecast by analysts and the 3.4% growth recorded in Q4 2023. Meanwhile, US Department of Commerce data shows that inflation increased by 3.4% in the first three months of 2024, compared to an increase of 1.8% in the final three months of 2023.
Stuart Cole, chief macro economist at Equiti Capital, said the rate-setting Federal Reserve is “finding itself caught between a rock and a hard place.” He added that while growth data suggests monetary policy “has worked its magic and the Fed’s foot on the monetary brake can be eased somewhat,” inflation figures suggest otherwise, “and potentially even point to the need for a further tightening.”
Overnight in the US the S&P 500 fell 0.46% to 5048.42, the Nasdaq fell 0.64% to 15611.76. The pound is currently worth $1.2519 and €1.1655. Brent is at $89.54, Gold is at $2348. The FTSE 100 is up .56% at 8123 and the Eurostoxx 50 is up .62% at 4970.
US Futures are rallying on expectation beating earning reports from Alphabet (google) and Microsoft. The message? Spending billions on AI is already paying off as both companies benefited from a rise in cloud computing revenue!
Brexit
From 30 April, EU firms will have to start completing the red tape of customs and health certificates on food for imports to the UK. Just 8 years after the referendum, the UK is finally imposing checks on fresh food imports after multiple delays. The effects on supermarket shelves and inflation are likely to be noticeable.
Tax cuts boost consumer confidence
Falling inflation and tax cuts have helped to revive consumer confidence this month, according to a survey by GfK. The consumer confidence index has jumped by two points to -19 in April, up from -30 a year earlier. Improved sentiment towards the economy and personal finances, along with lower inflation and anticipation of further tax cuts, have contributed to the increase. However, the analysis suggests that a delay in interest rate reductions may keep households cautious in the coming months. Joe Staton, client strategy director at GfK, said: “While the overall index score remains negative, all of the underlying five measures this April are significantly better than they were last April. These improvements reflect the impact on household budgets of lower inflation and the anticipation of further tax cuts.”
London Stock Exchange
London Stock Exchange said yesterday it had made a good start to the year with broad-based growth driving an increase in first quarter income. The London-based exchange operator and data provider said total income in the first three months of 2024 rose 3.9% to £2.18 billion from £2.10 billion a year prior. On a like-for-like basis at constant currency income rose by 6.3%. Gross profit climbed 4.5% to £1.89 billion from £1.81 billion, or by 6.9% on a comparable basis.
Anglo American
Anglo American has rejected BHP’s ‘opportunistic’ £31 billion all-stock bid, saying it significantly undervalues its business, condemning the transaction as ‘complex’ and ‘uncertain’. BHP’s interest is Anglo’s copper operations in Peru and Chile, with the Aussie giant looking to offload the iron ore and platinum operations.
Post Office
Despite loads of emails referring to back doors in the Horizon IT System, former Post Office executive Angela van den Bogerd claimed executives did not “cover up” knowledge that the computers of sub-postmasters could be accessed remotely despite consistently allowing the Post Office to issue statements denying a back door. She stood by her claim that she had been attempting to suppress information and told the inquiry that she “didn’t knowingly do anything wrong”.
Microsoft
Microsoft reported its earnings for the quarter, surpassing expectations on both the earnings per share and revenue fronts. The tech giant announced an EPS of $2.94, outpacing analysts’ expectations of $2.84. Quarterly profit for Microsoft surged by 20%, propelled by robust demand for its AI products.
Alphabet
Alphabet shares surged almost 13% after Thursday’s closing bell as its financial results for the first quarter impressed and it announced its first-ever dividend. The parent company of Google declared a cash dividend of $0.20 per share to be paid on June 17, 2024, and said it plans to pay quarterly cash dividends in the future. For Q1, earnings per share increased from $1.17 to $1.89, above the consensus of $1.49.
Natwest
NatWest total income fell to £3.48 billion in the first quarter of 2024 from £3.88 billion a year earlier. Pretax profit fell to £1.33 billion from £1.81 billion. Chief Executive Paul Thwaite said: “Our performance is grounded in the vital role we play in the economy and in the lives of our 19 million customers. Though macro-uncertainty continues, customer confidence and activity is improving, with both lending and deposits up in the quarter and impairments remaining low, reflecting our well-diversified business.”
Nationalized railways?
Labour has pledged to renationalise the railways it elected “within the first term” as the current model is “broken.” The Shadow Transport Secretary said that “today’s broken model simply doesn’t work” and a Labour government will transfer the 10 privately run rail networks into public ownership “well within the first term.” She added, “We will establish Great British Railways – a single, directing mind to control our railways in the passenger interest.”
London and South-East income tax tops £100bn for first time
An income tax grab on London and the South-East has reached a record-breaking £100bn, with Londoners paying £59.3bn and those in the South-East paying £41.4bn. The Chancellor’s tax freeze on income tax thresholds is driving up the bill, with around 1m people in London and the South-East expected to pay the higher rate of income tax by 2027/28. The top 25 parliamentary constituencies with the highest income tax bills are mostly in London, with Kensington paying £3.37bn and the cities of London and Westminster paying £3.15bn. Figures from HMRC show that Londoners pay more income tax on average than people in other regions, with a median of £3,650 per year paid.
HMRC denies remote working affects service levels
Almost half of Britain’s tax collectors are failing to meet the government department’s requirement for staff to work from the office three days a week, according to Jim Harra, permanent secretary at HMRC. Mr Harra told the Treasury Committee that remote working had no impact on service levels. “There is no difference between the number of calls taken whether a helpline adviser is at home or in the office. We see the same productivity,” Mr Harra said. Remote working at HMRC has been under scrutiny amid complaints about customer service.
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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.