Business news 27 February 2024
Businesses call for measures to boost investment. Delivery rethink could devastate small firms. Shop price inflation, vacancies, insolvencies, sterling & more business news that we thought would interest our members.
James Salmon, Operations Director.
Businesses call for measures to boost investment
Businesses are calling on the Government to take measures to further incentivise business investment and tackle labour shortages in next week’s Spring Budget. Jeremy Hunt is unlikely to have significant scope for major tax cuts given the constrained fiscal position, but businesses are hoping the Chancellor will announce further measures to boost the economy.
While BDO analysis shows that more than a third of businesses (37%) say the full expensing policy has helped their business, experts believe more can be done. Portia Pierrel, capital allowances lead at PwC, says the Chancellor could expand the range of investments eligible for full expensing and offer greater investment incentives to loss-making businesses. Additionally, businesses are calling for more support in resolving staff shortages, including reforming the apprenticeship levy and introducing support for working parents.
Delivery rethink could devastate small firms
Royal Mail’s proposed move to a three-day-a-week delivery model has raised concerns among small businesses. While regulator Ofcom has suggested the reform could help prevent the postal service from becoming unsustainable, business leaders and owners argue that such a move would cause significant damage to small businesses and disrupt the economy.
Shop inflation
UK Shop Price Inflation ebbed to an almost two-year-low in February, numbers showed. According to the latest British Retail Consortium-NielsenIQ shop price index, annual shop price inflation ebbed to 2.5% in February, from 2.9% in January. The reading was also short of the three-month average inflation rate of 3.3%.
Vacancies fell 15% in January
British employers advertised the fewest jobs in nearly three years last month, with figures from recruitment data company Adzuna showing a 15% year-on-year decline. The report shows that there were 867,436 jobs advertised in Britain in January, with this down from more than 1m a year ago and the lowest total since April 2021. Adzuna co-founder Andrew Hunter said January “has proven to be one of the most difficult starts to the year for job hunters in recent years with companies continuing to put hiring plans on ice.” The number of job seekers per advertised vacancy rose to 1.81 from 1.48 in January 2023, while the average starting salary was 3% more than a year earlier at £38,168.
Recovery will support sterling
While the pound is down against the dollar this year, analysts think it will pick up again as the economy starts to grow and believe the Bank of England’s interest rate cuts will support sterling. Although the UK entered a technical recession in the second half of 2023, private sector output hit its highest level in nine months in February. A number of economists say this suggests that the recession is already over.
In a note to clients, analysts at Barclays said they “maintain a constructive view of the pound,” while Paul Robson at NatWest agreed that rate cuts will likely support the currency. Noting that higher rate expectations tend to boost currencies, he said: “With the Bank of England still waiting for more evidence that inflation is heading back to target, it seems unlikely that the central bank will be in the first wave of central bank cutters.”
Meanwhile, analysts at JPMorgan were less optimistic about the outlook for sterling, saying recent GDP data “was a bit of a reality check that the economy was in a technical recession in the second half of last year.”
UK falling behind on green energy investment
The UK Sustainable Investment and Finance Association (UKSIF) has warned that the UK is falling behind other governments in the race to become the most investible market for low-carbon energy. According to a report released by UKSIF, 63% of British energy firms have moved or plan to move investments out of the UK to more supportive markets. The report also highlighted that 87% of UK energy businesses believe changes to policy are essential to make the UK an attractive investment location for green energy. The association has called for favourable policies that could potentially unlock £115bn in investment in the UK energy sector. In its report, UKSIF cites research from EY’s renewable energy country attractiveness index, which saw the UK drop from fourth to seventh place in 2023.
Stealth taxes set to add over £100bn to tax burden
Stealth taxes are projected to increase the tax burden by over £100bn by the end of the decade, according to the Institute for Fiscal Studies (IFS). The IFS estimates that taxes in 2023/24 will be £66bn higher than in 2018/19, and by 2028/29, it could reach £104bn. While the IFS report highlights the need for tax cuts to ease the burden on families, it also warns that any new tax cuts would only partially offset the record-breaking increase in tax revenue. The IFS has urged the Chancellor to resist announcing tax cuts unless he can demonstrate how they will be funded. The IFS report said: “In order to meet the financing requirements of a bigger state, revenues are set to rise sharply over the next couple of years. Having already risen from 36.8% of national income just before the pandemic to 40.3% this year, total government revenues are forecast to reach 41.6% of national income in 2028/29 – a total increase of almost 5 percentage points in less than a decade.” Former Business Secretary Sir Jacob Rees-Mogg, commented: “The state is too big and both taxes and expenditure need to be cut,” adding that the IFS report “is deeply concerning as a further £104bn will be extracted from taxpayers to fund a bloated, greedy and inefficient state.”
Women hold 42% of board positions at FTSE 350 firms
The proportion of boardroom jobs in the FTSE 350 held by women increased by two percentage points last year to 42.1%, according to the Government-backed FTSE Women Leaders Review. This is up from the 24.5% recorded when the report was launched in 2017. While campaigners hailed the progress made, they said more needs to be done to get women in top roles, with data showing that there are just ten female chief executives in the FTSE 100 and two female chairs. Gwen Rhys, founder of Women in the City, said the ongoing lack of female chief executives continues to be “disappointing,” adding: “We are making progress but it has taken over ten years to get to where we are.” Analysis shows that women make up just 35% of all leadership roles in FTSE 350 companies, falling short of the 40% target. Penny James, co-chair of the FTSE Women Leaders Review, commented: “We need a step-change in the rate of improvement to reach our goal of 40% women’s representation at the top of industry in two years.”
Begbies Traynor secures new debt facility with HSBC
Professional services restructuring specialist Begbies Traynor has agreed to a new debt facility with HSBC, replacing its existing facility with the same bank. The new facility includes a £25m unsecured revolving credit facility, with an additional £10m accordion facility – increased from £5m – subject to certain conditions. The facility has a three-year term until February 2027, with two one-year extension options.
Ryanair warns on prices
Ryanair boss Michael O’Leary has warned of higher fares and possible flight cancellations due to delays in Boeing aircraft deliveries. This stems from production issues at Boeing’s Spirit Fuselage facility in Wichita, Kansas, and subsequent hold-ups in Seattle, which have led to Ryanair expecting to receive fewer aircraft than initially planned between October and December.
Morrisons considers selling bakery business
Morrisons has hired Deloitte to explore the potential sale of its bakery business. The supermarket is considering offloading assets to pay down its debts, which currently stand at over £5bn. Private equity firm Endless, which owns Hovis and Bright Blue Foods, is rumoured to be interested.
Shein
Chinese fast-fashion company Shein is considering switching its IPO from New York to London (yes, I am surprised too). The move which would be a real feather in the cap for London is down to scrutiny from American regulators as the Chinese founded company, now headquartered in Singapore, looks toward western markets. It is expecting a valuation north of $80 billion. In London it would join competitors ASOS and Boohoo.
Bitcoin
Bitcoin passed $57,000 for the first time since 2021, thanks to inflows from ETFs.
Latest Insolvencies
Appointment of Liquidators – CBGT SERVICES LTD.
Appointment of Liquidators – PRANA MANAGEMENT CONSULTANCY LIMITED
Appointment of Liquidators – PLB ASSET FINANCE LIMITED
Appointment of Liquidators – GSP PROFESSIONALS LIMITED
Appointment of Administrator – FOX INDUSTRIAL SERVICES LIMITED
Appointment of Liquidators – INTEGRATION ASSOCIATES LIMITED
Appointment of Liquidators – PSS 2023 LIMITED
Appointment of Liquidators – CAMILLA OLSEN LIMITED
Petitions to wind up (Companies) – R S CREATIVE SIGNS & EXHIBITIONS LIMITED
Appointment of Liquidators – TTOL CONSULTING LIMITED
Appointment of Administrator – CAPITAL NETWORK SOLUTIONS LIMITED
Appointment of Liquidators – KINSHIP PROPERTIES LLP
Appointment of Liquidators – S2S CONSULTING LIMITED
Appointment of Liquidators – WIGHTMAN BUILDERS LIMITED
Petitions to wind up (Companies) – PHASE-TWO BEDROOM DESIGN LTD
Appointment of Liquidators – M.TAYLOR CONSULTANCY LIMITED
Appointment of Liquidators – HH DISPUTE SERVICES LTD
Appointment of Liquidators – WITZ LIMITED
Petitions to wind up (Companies) – M. TEEVAN HIRE CO. LIMITED
Appointment of Liquidators – ALMAG COMPONENTS LTD
Appointment of Liquidators – OI CONSULTING LIMITED
Appointment of Liquidators – CLARITY ACTUARIAL LTD
Appointment of Liquidators – KPP CONSULTING LTD
Appointment of Liquidators – SURETECH MANAGEMENT LTD
Appointment of Liquidators – JMC PROPERTY DEVELOPMENTS (YORK) LTD
Appointment of Liquidators – STUDIO E10 LTD
Appointment of Liquidators – TLC MORTGAGES LIMITED
Appointment of Liquidators – QUINCE TREE TRADING LIMITED
Appointment of Liquidators – OI GROUP LIMITED
Appointment of Liquidators – LUKE DIDSBURY LTD
Appointment of Liquidators – RAINBIRD HOLDINGS LIMITED
Appointment of Liquidators – HLR CONSULTING LIMITED
Petitions to wind up (Companies) – MFC COLLECTION LTD
Petitions to wind up (Companies) – ON POINT BUILDERS LTD
Appointment of Liquidators – CHESIL AND FLEET HOLIDAY COTTAGES LIMITED
Appointment of Liquidators – MAISIE MAGUIRE LIMITED
Petitions to wind up (Companies) – I&M COURIERS LTD
Petitions to wind up (Companies) – MM LONDON LIMITED
Petitions to wind up (Companies) – N & A LOGISTICS LIMITED
Appointment of Liquidators – ACHEV LIMITED
Appointment of Liquidators – BRS DISTRIBUTION LIMITED
Petitions to wind up (Companies) – SITEC BUILDING & MAINTENANCE LIMITED
Petitions to wind up (Companies) – L’ESCARGOTIERE (A23) LIMITED
Appointment of Liquidators – WESTBUILD HOMES LIMITED
Appointment of Liquidators – WESTBUILD LIMITED
Appointment of Liquidators – WESTBUILD (READING) LIMITED
Petitions to wind up (Companies) – TRUE-LUXURY WEEK LTD
Appointment of Liquidators – TECHNISOLVE LIMITED
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.
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Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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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!
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Check our compensation calculator to see how much your business could be owed!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.