Business news 28 March 2024

Wishing you all a happy Bank holiday weekend. Rising global risks could hit financial stability. Homeowners and businesses resilient to high interest rates.  And more business news that we thought would interest our members.

James Salmon, Operations Director.

Rising global risks could hit financial stability

The Bank of England has warned the UK faces growing risks from weaknesses in the global financial system. The Financial Policy Committee (FPC) said some global risks to financial stability have increased since its December meeting, including a rise in political tensions. The FPC said that while prices of assets such as shares and bonds have risen, leading to higher valuations, economic conditions remain challenging. Noting the risk of a “sharp correction,” the committee warned that investors may be “putting less weight on risks to growth or the path of interest rates necessary to bring inflation back to target sustainably.” Private equity could be particularly vulnerable to a fall in asset prices, officials warned, saying; “The extent of transparency around asset valuations, overall levels of leverage, and the complexity and interconnectedness of the sector make assessing financial stability risks difficult.” The report noted that although the overall global environment for financial risk remains challenging, Britain’s financial system is well protected against future shocks.

Homeowners and businesses resilient to high interest rates

The Bank of England says mortgage holders and businesses are generally coping well with high interest rates. The Bank’s Financial Policy Committee said: “So far UK borrowers have been resilient to the impact of higher interest rates,” while businesses have “remained broadly resilient to high interest rates and weak growth.” The Bank says mortgage debt service ratios are forecast to rise from 7% in Q3 2023 to 8.4% by the end of 2026, slightly below a projection of 8.8% in December. The proportion of households with high debt costs relative to their cost of living is expected to rise from 1.4% to 1.6% by the end of this year.

Ministers urged to improve EU trade terms to boost economy

The British Chamber of Commerce (BCC) says improving trading terms with the EU could encourage trade and boost the economy. Data shows that goods exports have under-performed the G7 average by 15% since 2020. Although services exports have held up better, the BCC said restrictions on trade with the EU mean there are “stronger headwinds” to service exporters than a decade ago. Office for Budget Responsibility data shows that while overall trade intensity has fallen by 1.7% compared with 2019, the G7 average has increased by 1.9%. Martha Lane Fox, president of the BCC and chair of the Business Council, said that the issue is “about much more than Brexit,” but noted that the UK’s exit from the EU “casts a long shadow.” She argued that politicians “must be bolder in their decision making,” insisting: They must set out a strategy on how we mange EU regulation and, where it makes sense, to diverge so that British business can benefit.” The BCC has recommended that primary regulations on traded goods should mirror the EU’s in order to keep business costs low, arguing that there should be “strong arrangements” for co-operation between the EU and UK to minimise compliance frictions.

Businesses pull back on hiring and pay rises

British businesses reduced their plans for increasing hiring and wages in March, according to the Lloyds Bank Business Barometer. The gap between firms planning to hire and those planning cuts fell to 27%, with this down from February’s almost two-year high of 36% but higher than the long-term average of 22%. The share of firms expecting to increase wages by 3% or more over the next 12 months fell to 33% from 35%. The survey also found that overall business confidence remained at a net 42%. Firms in the capital were more optimistic, however, with business confidence in London up 14 points to 52% in March.

Taxpayers reminded of new rates and rules

Taxpayers have been reminded that a number of changes to taxation are on the horizon, with several new rates and rules coming into force on April 6. The capital gains tax allowance, which was was reduced from £12,300 to £6,000 in April 2023, will decrease further to £3,000 on April 6. The higher rate of capital gains tax on property will decrease from 28% to 24%, although the basic rate for CGT on residential properties will remain unaffected at 18%. The dividend allowance will be halved to just £500, having already been cut from £2,000 to £1,000 in the current tax year. The National Insurance tax rate will drop from 12% to 8% for employees and from 9% to 6% for the self-employed. On the impending changes, Henrietta Grimston, financial planning director at wealth management firm Evelyn Partners, says: “Households need to be aware of the new tax environment because decisions they take now could leave them better or worse off when their tax position for the 2024/25 is finally assessed.”

Minimum wage increase may stoke inflation

The Confederation of British Industry (CBI) has warned that an increase in the minimum wage could drive up inflation as firms are forced to pass higher costs on to consumers. The minimum wage will rise by almost 10% to £11.44 an hour in April. Rain Newton-Smith, director general of the CBI, noted that nearly half of firms affected by last year’s increase in the National Living Wage said “the pressure was so great they had to pass it on in price rises.” “Now, more members than ever are telling us they’re worried about the increase next month,” she added.

Thames Water

Thames Water is facing a potential “Special Administration” after shareholders scuppered recapitalization plans and refused to inject a further £500 million of extra equity.  Regulator Ofwat is digging its heels in, insisting that Thames must “pursue all options to seek further equity.” Bonds in the parent company Kemble Water plunged again this morning.


A report by IPPR’s Carsten Jung says we are at a crossroads. “Government, employers and unions have the opportunity to make crucial design decisions now that ensure we manage this new technology well. If they don’t act soon, it may be too late.” Get it right and AI could add £306 billion per year to the UK economy and wage rises of as much as 30%  but fail to implement the correct policy changes and AI will wipe out 8 million jobs with no economic gains.


Amazon is to invest $2.75bn more in Anthropic, an AI startup, adding to the $1.25bn invested last year.


Carnival marked a ‘fantastic’ start to 2023, as it hit a ‘record’ revenue. In the first quarter of 2024, Carnival reported ‘record’ revenue of $5.41 billion, up from $4.43 billion a year earlier. Carnival said it swung to a GAAP net loss of $214 million from a profit of $686 million. During the first quarter, booking volumes hit an all-time high with prices considerably higher year over year.

Aviva & AIG

The UK Competition & Markets Authority decided not to refer the planned acquisition by insurer Aviva of AIG’s life-insurance and retirement-services division AIG Life to a phase 2 investigation. The UK competition watchdog said this decision was based on the information currently available and that a further announcement on the decision will be made “as soon as is reasonably practicable”. In February, the CMA said it was investigating the deal, saying it could reduce competition in the UK services sector

Home sale discounts get smaller

Analysis from Zoopla shows that people selling their homes in March cut an average of £10,000 from their original asking price to achieve a sale, equating to a typical discount of 3.9%. The property portal says this is a “marked improvement” on the average discount of £14,250 – or 4.5% – recorded in November. Zoopla said the says this “reflects a combination of greater realism from sellers on their asking price and growing buyer confidence.” The report also shows that around 7% more home sales have been agreed in Q1 compared with the same period last year. Richard Donnell, executive director at Zoopla, said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.”

Spirent Communications

Spirent Communications has accepted a takeover bid from US electronics group Keysight at 201.5p per share, representing a roughly 14% premium to Wednesday’s closing price. The bid beats out a previous offer from Viavi by a 26.5p per share.

HMRC sees fresh criticism over service levels

HMRC is facing criticism for withholding refunds and long wait times for those seeking to contact the tax office. The Telegraph looks at the case of Neil Matthews, who has been waiting for a refund for three months and does not expect to receive it until May. An HMRC adviser has told him his money had been “put through security clearance” and insisted that the tax office has 10 weeks to do this. Mr Matthews comments: “I’m a retired accountant and my wife is a tax adviser, and we have never heard of this.” HMRC was last week forced to reverse its decision to close helplines for self-assessment and VAT after a public outcry. The closure was intended to encourage the use of online services but a trial resulted in longer wait times and lower user satisfaction.

Tax raid hits triple lock gains

Pensioners will only see a £20 increase in real terms due to the Chancellor’s tax raid, according to the Resolution Foundation. The state pension will rise by 8.5%, leaving retirees £190 better off in the next tax year. However, the Chancellor’s freeze in income tax thresholds will cost pensioners £170, resulting in a net gain of just £20 this year. The think-tank said: “A basic-rate tax paying pensioner will essentially see their above-inflation state pension rise wiped by this April’s personal allowance freeze.” The report flags that, in contrast, a parent earning £60,000 will benefit from a £900 tax cut due to reductions in National Insurance. The decision to raise the income level at which people are asked to start paying back child benefit to £60,000 will also boost their earnings by £1,300. Previous Resolution Foundation analysis shows that 8m pensioners are facing a £1,000 hit from stealth taxes.

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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 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.