Business news 26 September 2024
Economic growth robust in 2024. But confidence gloomy. New fraud refund rules for banks. Cars, tax, interest rates markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
OECD: Economic growth robust in 2024
The UK has registered the second highest economic growth among G7 nations, according to analysis by the Organisation for Economic Co-operation and Development (OECD). The economy is expected to grow by 1.1% in 2024, putting the UK alongside Canada and France but behind the US. This marks an increase on the 0.4% growth rate the OECD had predicted in May.
The OECD said that economic growth had been “relatively robust” in many countries, including the UK, but noted: “Significant risks remain. Persisting geopolitical and trade tensions could increasingly damage investment and raise import prices.” Looking ahead, the UK economy is predicted to grow by 1.2% in 2025, while consumer prices are projected to rise by 2.7% this year and 2.4% next year.
Confidence gloomy
There is yet more gloomy confidence data out today with the Recruitment and Employment Confederation suggesting employers are turning more pessimistic on hiring and the British Retail Consortium says households expect the economy to deteriorate in the next three months. Not surprising given the government messaging ahead of the budget.
Banks must refund fraud up to £85k within five days
UK banks must refund fraud victims up to £85,000 within five days under new rules announced by the Payment Systems Regulator (PSR). The PSR, which has reduced the maximum compensation rate from a proposed £415,000, said the £85,000 cap would cover more than 99% of claims. The watchdog also announced that once the customer had been refunded, the bank or payment company can claim half back from the financial institution used to receive the stolen money. PSR managing director David Geale said the new rules mean all victims will receive the same level of help, saying: “Whether you get reimbursed and how much can actually depend on who you bank with and that can’t be right.” He added: “We want to have a consistent experience.” However, Rocio Concha, director of policy and advocacy at consumer group Which?, has voiced concern that the lower cap “reduces the incentives for banks and payments firms to take fraud prevention seriously.” Data from UK Finance shows that the number of authorised push payment fraud cases rose by 12% to 232,429 in 2023, with losses hitting £459.7m.
Bank official calls for ‘cautious’ approach to rate cuts
Senior Bank of England official Megan Greene has called for a “cautious, steady as she goes approach” to cutting interest rates, insisting that it is “appropriate to take a gradual approach to removing restrictiveness.” Ms Greene, a member of the Bank’s rate-setting Monetary Policy Committee, has also suggested that concerns around next month’s Budget could be holding back investment and spending, saying: “There’s a lot of uncertainty in the UK. Generally, uncertainty causes businesses and households to wait on the sidelines until some of that is cleared up.”
Cars
UK Car Production fell by 8.4% in August, with 41,271 units made, according to the Society of Motor Manufacturers & Traders Limited (SMMT). This marks the sixth consecutive month of declines and the lowest rate of production in over three years. Output was hit by seasonal factors and a continued shift towards electric vehicle production, it said.
However, Jaguar Land Rover plans to invest another £500 million into retooling a factory near Liverpool that will manufacture electric SUVs.
Markets
Yesterday, the FTSE 100 closed down 0.17% at 8268.70 and the Euro Stoxx 50 closed down 0.48% at 4916.89. Overnight in the US the S&P 500 fell 0.19% to 5722.26 and the NASDAQ rose 0.04% to 18082.21.
This morning on currencies, the pound is currently worth $1.334 and €1.198. On Commodities, Oil (Brent) is at $71.90 & Gold is at $2668 On the stock markets, the FTSE 100 is currently up 0.56% at 8315 and the Eurostoxx 50 is up 1.75% at 5003 as investor sentiment turned positive driven by gains in Asia off the back of Chinese stimulus.
China
The Chinese Politburo pledged to take action to stop the decline of the Chinese real estate market and will issue 2 trillion yuan or $284.4 billion of special sovereign bonds this year which will be evenly split between funding fiscal spending to stimulate consumption and helping local governments tackle debt problems.
Secondary funding on AIM falls by a third
Secondary funding on London’s Alternative Investment Market (AIM) has fallen by 33% in the last year, analysis by UHY Hacker Young shows. The data shows that £1.2bn was brought in through secondary fundraisings in the year to August 31, compared to £1.8bn in the previous year. Fundraising has dropped by more than 80% in the last three years, from a record high of £6bn in 2021. Colin Wright, a partner at UHY Hacker Young, said: “One of the great successes of the AIM market has been the ability of companies to raise money after their IPO to keep powering their growth,” adding: “That element of AIM hasn’t been working recently.”
Tax dominates Budget debate
As the Budget approaches, KPMG’s head of tax policy, Tim Sarson, highlights a surge in speculation surrounding potential tax increases, saying: “Never before in the field of fiscal policy have so many speculated over so many tax measures for so long.” He notes that new governments typically raise taxes, citing Resolution Foundation analysis showing that the first two fiscal events of each parliament have historically introduced tax policies raising an average of £21bn annually. Mr Sarson reflects on past budgets, including significant tax hikes in 2010 and 1997, and questions the current obsession with the upcoming Budget, attributing it to the “great sweep of tax rises ruled out” in Labour’s manifesto and the “sheer lugubriousness with which we’ve been forewarned of the bad news.”
Think-tank calls for exit tax
With the UK witnessing a significant exodus of millionaires, with 9,500 expected to leave this year, the Resolution Foundation has proposed an exit tax on capital gains for those moving abroad. Adam Corlett, the think-tank’s principal economist, argues this is necessary to close a loophole that allows wealthy individuals to avoid taxes on gains made while in the UK. However, Victoria Price of Alvarez and Marsal has warned that such a tax could lead to a “mad scramble” of departures and make the UK less attractive for future wealth creators. Ms Price cautions that the potential revenue from capital gains tax is minimal, saying: “CGT doesn’t actually raise much for the Treasury in the scheme of things.” Experts also suggest that the complexities of implementing an exit tax could pose significant challenges for the Government.
OpenAI
OpenAI are reportedly looking to change their corporate structure to a “for profit” business and giving CEO Sam Altman a 7% stake in the business.
Diageo
Diageo cautioned of continued weakness in the global alcoholic drinks market in a brief trading update ahead of today’s annual general meeting. CEO Debra Crew said: “Our expectations are unchanged from when we reported our fiscal 24 preliminary results on 30 July 2024. “The global environment remains challenging for both our industry and Diageo.
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
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 and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
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’s collection department 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.