Business news 27 April 2023

James Salmon, Operations Director.

Energy Bill Debt. No regrets for SME owners. Zero productivity growth. CMA blocks Microsoft. Inflation, Samsung, Sick days, Luring back retirees, Food banks, and more business news.

Energy Bill Debt

A YouGov survey on behalf of the Warm This Winter campaign found that 29% of people were in debt to their energy companies with more than  half of those in debt fearing they won’t be able to save enough during the summer to pay off their outstanding bills, let alone save for the next winter, potentially sending outstanding bills spiraling.

Small and medium-sized businesses are also facing a squeeze after the government support packages  ended, leaving some 370,000 small businesses at risk of insolvency. James Cooper, a partner at Baringa said “The most material level of risk over recent months has actually been in that SME area of the market due to insolvency”

Although  energy prices have dropped from their record highs, they remain almost double the level of just two years ago. It’s threatening businesses and households who already are battling surging living costs, with unaffordable energy bills. Many energy suppliers fear they will never recover the debt.

Late bills are estimated to have grown to between £3.2 billion and £3.6 billion from £2.5 billion that was late last year, The CEO of industry association Energy UK, Emma Pinchbeck, said at Ofgem’s Vulnerability Summit on Monday. Some suppliers were “providing over £500,000 per week in credit to their customers”

At the same summit, Clare Moriarty, CEO of charity Citizens Advice said this year has seen a “continued squeeze on people’s finances, translating into a debt crisis which is going to be with us for a long time to come”

No regrets for SME owners
Almost four in five small business owners (77%) feel that starting up enterprise was one of the best decisions they ever made – with two-thirds feeling upbeat about the future of their venture. Being hard-working (48%), motivated (44%), and organised (42%) were the top three personality traits you need, according to those polled. The figures are from a study of 500 SME owners and sole traders commissioned by AXA UK.

Workers deliver zero productivity growth
Office for National Statistics (ONS) data shows that output per hours worked in the three months to December 2022 was no different compared to the same period in 2021, meaning there was no improvement in the amount of goods and services workers produce per hour. Construction staff notched the biggest gains, adding 0.7 percentage points to the total, while City workers in the financial services sector contributed to a 0.3 percentage point contraction to the overall productivity figures. Productivity growth is gauged by measuring changes in gross value added and hours worked in the UK economy. The ONS found that the former improved by 0.5% over the last year while the latter increased by 0.6%.

UK’s CMA blocks Microsoft’s $69bn Activision deal 

The Competition and Markets Authority blocked for Microsoft’s purchase of Activision Blizzard. The CMA said yesterday that its concerns over the $69 billion takeover can’t be solved by any of Microsoft’s proposed remedies and the only solution is to prevent the deal. Microsoft and Activision have said they will appeal the decision, but the CMA’s decision is globally binding and they have the  power to stop the deal altogether should the appeal process be unsuccessful.


Samsung Electronics announced it lowest quarterly profits in 14 years. The world’s largest memory-chip maker said the 95% year-on-year drop was due to “weak demand” and “inventory adjustments from customers” and has announced a meaningful cut of its memory-chip production as demand has crashed.

Food price inflation slows
Food inflation eased in April, with grocery prices 17.3% higher than a year ago compared to the 17.5% year-on-year increase recorded in March. Data shows that supermarket own label sales were up 13.5% compared to a year ago, with sales of the cheapest value lines up by 46%. Sue Davies, head of food policy at consumer group Which?, said: “These figures highlight the ongoing struggle people all around the UK are facing when buying food at the moment.”

City economist: Rate hikes would hit Chancellor’s tax cut options
City economist Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, says the Bank of England could squeeze Chancellor Jeremy Hunt’s room to cut taxes if it keeps hiking interest rates. He said that Bank officials would increase Britain’s debt interest bill by around £8bn if they lift official borrowing costs to 5%, in line with market expectations. Mr Tombs said that if the Office for Budget Responsibility (OBR) were to “recast the numbers today… [it] would increase its forecast for debt interest payments” in the current fiscal year.

The OBR last month said it thought the Chancellor and Prime Minister Rishi Sunak would oversee a £94bn debt interest bill this year. Mr Tombs also said the OBR’s GDP growth expectations are “too upbeat.” While the OBR thinks the economy will shrink 0.2% this year and then rebound to 1.8% growth in 2024, Mr Tombs thinks GDP will be about 1.5% lower than the OBR expects in five years’ time.

Sick days reach a record high
The number of working days lost to workers being ill has climbed to a record high of around 185.6m, Office for National Statistics (ONS) figures show. The sickness rate, which calculates the proportion of working hours lost because of sickness, climbed to 2.6%, the highest level since 2004. Working days lost due to sickness per worker hit 5.7.

Yael Selfin, chief economist at KPMG UK, said the increase in working hours lost due to illness “signals further deterioration in the country’s production potential, and if continued, further decline in long term economic growth.”

While the report shows that minor illnesses, like colds and flu, accounted for around 29% of all sick days, Investec economist Sandra Horsfield said she had a “strong hunch” that the ongoing prevalence of Covid was the main reason behind the rise in sick days. The ONS noted a big rise in chronic sickness since the beginning of the pandemic but James Smith, a developed markets economist at ING, said the main factor driving up the absence rate was temporary sickness.

Long-term sickness is said to be costing the UK Economy £43 billion a year.

Flexible work could lure back retirees
A poll from insurer Zurich suggests that a lack of flexible job opportunities is keeping over 50s out of the workforce and preventing retirees from returning to employment. The survey shows that almost a fifth adults over 50 were deterred from applying for new jobs because of a lack of flexible working opportunities. While 34% said greater availability of flexible working opportunities would keep them in the workforce for longer, 28% could be tempted out of retirement if they had the option to work from home. Analysis by Zurich found that less than a third of UK vacancies offered any form of flexible working, including hybrid working. Meanwhile, data from Timewise shows that only 12% of UK job vacancies offered part-time hours and just 30% advertise some form of flexible working such as remote working, home working or part-time hours.

‘Elitist’ employers only hire from leading universities
Research commissioned by Barrington Hibbert Associates suggests that law and financial services are “elitist industries”, with more than half of employers only hiring from eight top universities. A survey of 1,600 hiring managers from leading UK industries found that 52% of legal firms and 51% of financial services companies will only consider candidates from Oxford, St Andrew’s, Cambridge, LSE, Imperial College London, Durham University, UCL, or the University of Bath. It was also shown that 41% of law firms and a quarter of accountancy, banking, and insurance companies are unlikely to hire anyone without a degree. Hiring managers in the public services and administration sector consider themselves the least “elitist” – with 72% likely to offer a candidate who is not university educated an interview.

Online job ads climb by 2.3%
Data from Adzuna shows that online job adverts increased by 2.3% to 1.04m in March, the biggest monthly jump since February 2022. The report also shows that advertised salaries reached an annual average of £37,530 in March. This was up 0.5% on February and up 3% compared to March 2022. Adzuna noted that advertised salaries have increased in each month since October. Official figures published last week revealed a fall in the number of job vacancies in the three months to March.

Food bank demand hits record

The UK’s biggest food bank network distributed more support than ever before in the last financial year, with December 2022 marking its busiest month on record. The Trussell Trust reported yesterday that its 1,200 food banks distributed almost three million food parcels between April 2022 and March 2023. That’s a whopping 37% rise from the pandemic struck year to March 2022 and more that double the figures from five years ago.


Persimmon said it expects to reach the top end of its 2023 expectations, despite a drop in sales in the first quarter. The York-based housebuilder reported net private sales per outlet of 0.62, down 37% from 0.98 a year ago, but up from 0.30 in the final quarter of 2022. ‘Customer interest remains good, with our marketing campaigns continuing to generate healthy traffic to site and online,’ the firm said.


AstraZeneca said it made a “strong start” to 2023 as it posted only a slight dip in first-quarter revenue, despite a decline in takings from covid-19 medicines. Revenue in the quarter totaled $10.88 billion, down 4.5% from $11.39 billion the previous year. AstraZeneca noted that when excluding the sales of covid-19 medicines, revenue grew by 15% year-on-year. Pretax profit multiplied to $2.26 billion from $553 million.


Barclays reported net profit of £1.78 billion for the first quarter, beating expectations and coming in 27% higher year-on-year


Bunzl said revenue was up in the first quarter, boosted by acquisitions and strong product cost inflation, as it backed its full-year guidance. The distribution services company said first quarter revenue increased 8.4% at actual exchange rates, and 1.2% at constant currency.

UK venture capital investment slips to pre-pandemic levels
Venture capital investment in the UK fell back to pre-pandemic levels in Q1, with investors deterred by a slump in start-up valuations and volatile markets. Research by KPMG shows that £2.9bn was invested into UK firms in the opening three months of the year, the lowest amount raised in the opening quarter of a year since 2020. This compares to the £8.2bn raised in the first quarter of 2021 and the £12.3bn raised in Q1 2022. Warren Middleton, UK chief of KPMG’s Emerging Giants Centre of Excellence, said VC investment is expected to “remain soft over the next few months” but could begin to increase in H2 as volatility begins to ease. He said that a funding boom over the previous two years now looked like “an outlier period,” adding: “What we are starting to see now is VC investment starting to come back to more normal levels, albeit compounded by a challenging economic environment.”

PwC to invest $1bn in AI
PwC plans to invest $1bn in artificial intelligence technology to automate parts of its audit, tax and consulting services in its US business over the next three years. PwC will work with the Microsoft-backed OpenAI, the creator of ChatGPT, to develop generative AI. The Big Four firm said it expects the investment to allow staff to “work faster and smarter.” Mohamed Kande, co-leader of PwC’s American consulting solutions business, said: “We are at a tipping point in business and society, where AI will revolutionise how we work, live and interact at scale.” PwC’s London office recently announced a “strategic alliance” with Harvey, an OpenAI-funded start-up that creates AI tools for professional services.

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 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 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.