Business news 27 September 2023

James Salmon, Operations Director.

UK economy ‘will shrink for two years. Calls for three-day weeks for over-50s. Brits least likely to deem work important. UK tech climbs to record value.  And more business news that we thought would interest our members.

Think-tank: UK economy ‘will shrink for two years’
Adam Posen, president of Peterson Institute for International Economics (PIIE) think-tank, believes the UK economy will shrink this year and in 2024. The PIIE predicts that the UK will see a 0.3% drop in GDP this year followed by a fall of 0.2% in 2024. In contrast, the report predicts that the eurozone and the US are set to see growth. Mr Posen, a former member of the Bank of England’s rate setting Monetary Policy Committee, said factors related to the underlying weakness of the economy and the fallout from Brexit would leave the UK behind while most other developed economies expanded. Mr Posen said: “The UK won’t be in recession all of next year, but the recovery will be held back by higher-than-expected inflation and in response,” adding that the Bank “will need to keep interest rates higher for longer.”

Calls for three-day weeks for over-50s
A Swedish-style three-day working week for over-50s should be introduced in Britain, according to former Pensions Minister Ros Altmann. Baroness Altmann said the system could encourage older people to stay in work rather than retire early, helping some of the country’s workforce issues. She also recommended tax breaks for employers to make hiring older people more attractive. She added: “The whole point is you should have money in your 80s and 90s, not spend it all in your 50s and 60s. There are incentives in the system, but the industry and the pension products are not working to encourage people to not take their pension.”

Brits least likely to deem work important
Research from King’s College London shows that just 14% of UK millennials believe work should always come first, compared with 41% in 2009. The study, which is based on surveys from 24 countries, found that 73% of all UK workers believe “work is very or rather important” in their lives. British respondents were the least likely of all those polled to agree with this statement, below the US (80%), Germany (84%), France (94%), Italy (96%) and the Philippines (99%).

UK tech climbs to record value
Data from HSBC Innovation Banking shows that the total value of the UK’s tech sector has climbed to its highest ever level this year, hitting $996.8bn. This is up from $988bn last year. This means the UK’s tech sector is the third most valuable in the world, behind only the US and China. The report shows that investment into London-based start-ups slowed to $8.6bn in the first nine months of this year, falling from $19.2bn in the same period last year. Firms across the UK have raised $14bn, less than half of the $31bn raised in 2022.

Negative media coverage blamed for slump in London floats
Clare Cole, director of market oversight at the Financial Conduct Authority (FCA), has blamed negative media coverage of businesses for contributing to a slump in London flotations. Suggesting that journalists could do more to improve the business environment, she said: “We are very negative about our entrepreneurs and our listed issuers.” Analysis by EY shows that the amount of capital being raised by companies launching themselves on London’s markets fell to £593m in the first six months of this year. In the first six months of 2021, £9.4bn was raised by 47 London offerings. Julia Hoggett, chief executive of the London Stock Exchange, has called for an exploration of why private markets have become such an “incredibly attractive alternative” to public markets.

Three-quarters of companies unprepared for ESG data audit
Three-quarters of companies globally are not ready to have their environmental, social and governance (ESG) data audited externally months before new regulations kick in, according to a new report from KPMG. Stricter EU, US and global regulations are being introduced to replace voluntary practices for climate-related disclosures. However, only 25% of the 750 surveyed companies feel prepared for the upcoming regulations. Larger companies are better prepared than smaller firms, and France, Japan, and the US rank highest in preparedness. The report highlights the need for companies to improve their controls, processes, and qualitative statements around ESG data. Currently, only 14% of companies obtain reasonable assurance and 16% limited assurance for all of their ESG disclosures.

UK can sustain higher taxation for growth and public services
The Institute for Public Policy Research has stated that the UK can sustain higher levels of taxation in order to improve growth and public services. The think-tank is pushing back against the Government’s reported desire to cut taxes before the general election, arguing that the tax burden is “unremarkable” compared to international peers. Instead, the institute calls for a fairer distribution of taxes and criticises a political “fixation” on the rising tax burden.

Wealthiest would be the biggest winners from scrapping IHT
Abolishing inheritance tax would see the wealthiest 1% of Brits reaping half the benefits, according to economists. The Institute for Fiscal Studies (IFS) warns that scrapping the levy would also result in an annual £15bn deficit in public funds by 2032. Currently, fewer than 4% of estates meet the threshold to pay inheritance tax, but this is predicted to rise to 7% by 2032. However, 47% of the savings from abolishing the tax would go to those with estates worth more than £2.1m. The IFS report, Reforming Inheritance Tax, found that in 2024 the wealthiest 20% of donors would bequeath an average of £380,000 to each child, and pay inheritance tax of about 10% of this amount. The least wealthy 20% of parents would leave less than £2,000 to each child. A spokesperson for the Treasury said: “More than 93% of estates are forecast to have zero inheritance tax liability in the coming years – however, the tax raises more than £7bn a year to help fund public services millions of us rely on daily.”

Shakira charged with €6.7m tax fraud in spain
Spanish authorities have charged pop star Shakira with alleged tax fraud worth €6.7m. She is accused of using an offshore company to avoid paying taxes on her 2018 income, including €5.3m in personal income tax and €700,000 in wealth tax. Prosecutors claim that the Colombian singer deducted inappropriate expenses and diverted money to low-tax and high-opacity countries. The charges come in addition to a separate case in which she is due to be tried for failing to pay €14.5m in tax between 2012 and 2014.

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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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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.


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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.