Business news 28 August 2024
Confidence down for SMEs. Small businesses face soaring energy costs. Budget will be painful, PM warns. Tax hikes, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Confidence down for SMEs
Analysis by the Federation of Small Businesses (FSB) suggests that confidence among small business owners fell into negative territory in Q2, with rising employment costs denting morale. While employment costs were flagged as the main barrier to growth, small business owners also highlighted concerns over tax and weaker consumer demand. The FSB’s small business index, which polled more than 1,000 companies, fell to -10.8 in the three months to the end of June, with the rating down 16.3 points from Q1. Construction was the least optimistic of the main sectors, with a score of -20.7 points, while the wholesale and retail sector scored -19.5 points. With Labour planning an overhaul of workers’ rights, a move which could increase expenses for employers, Tina McKenzie, policy chair at the FSB, said small businesses are “looking with trepidation at the government’s forthcoming plans to change employment, which could both increase risk around small businesses employing people, and the costs when they do.”
Small businesses face soaring energy costs
Small businesses are grappling with energy bills that are £5,000 higher than pre-crisis levels, with projections indicating further increases. According to Cornwall Insight, the average annual electricity bill for small businesses is expected to reach £13,264 by April 2025, a 70% rise from the £7,811 average recorded in 2020/21. Unlike households, businesses lack a price cap, leaving them vulnerable to rising costs. Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “Our Business Energy Cost forecast shows businesses are faring no better than households, with bills still substantially above historic averages.”
Budget will be painful, PM warns
Sir Keir Starmer has warned that Budget will be “painful,” saying people will have to “accept short-term pain for long-term good.” While he did not offer details, the Prime Minister said those with the “broadest shoulders should bear the heavier burden.” Sir Keir accused the Conservatives of creating a £22bn black hole in the public finances, adding that Labour had inherited “not just an economic black hole but a societal black hole” from the Tory government. While Mr Starmer repeated a pledge that Labour will not raise income tax, National Insurance or VAT, Chancellor Rachel Reeves has not ruled out an increase in inheritance tax, capital gains tax, or reforming tax relief on pensions. Conservative leader Rishi Sunak said Mr Starmer’s speech was “the clearest indication of what Labour has been planning to do all along – raise your taxes.”
Budget set to deliver tax hikes
With the Government saying it will have to raise taxes to plug a £22bn hole in the public finances, BBC News looks at which levies may be increased. Noting that Labour has ruled out raising taxes on “working people”, including income tax, National Insurance or VAT, it highlights that no such promises have been made about taxes on inheritance and capital gains, adding that a reduction in pension tax relief may also be an option. The piece also suggests ministers may opt for a stealth tax that raises revenue which is not explicitly labelled or intended as a tax. Paul Johnson, director of the Institute for Fiscal Studies, suggests that Labour could extend a freeze tax thresholds and Resolution Foundation director James Smith says targeting thresholds may be enough to address the shortfall in the public finances.
Markets
Yesterday, the FTSE 100 closed up 0.21% at 8345.46 and the Euro Stoxx 50 closed up 0.04% at 4898.78. Overnight in the US the S&P 500 rose 0.16% to 5625.80 and the NASDAQ rose 0.16% to 17754.82.
US Consumer confidence rose to a 6 month high in August with a reading of 103.3 from 101.9 in July. Markets are waiting with bated breath for Nvidia Corp.’s results, with US equity futures little changed and shares trading in tight ranges from Asia to Europe. With the world’s most-influential stock expected to set the tone for risk assets, investors are keen for any clues on whether the artificial-intelligence boom still has legs.
Nvidia may again smash already high sales expectations when it reports later. Analysts predict the company will forecast revenue growth of more than 70% for the current quarter.
This morning on currencies, the pound continues its ascent and is currently worth $1.322 and €1.187. On Commodities, Oil (Brent) is at $78.9 & Gold is at $2507. On the stock markets, the FTSE 100 is currently flat at 8343 and the Eurostoxx 50 is up 0.46% at 4921.
Next shop workers win equal pay claim
More than 3,500 current and former workers at Next have won a legal battle for equal pay, with an employment tribunal ruling that store staff – who were predominantly women – should not have been paid at lower rates than employees in warehouses, most of whom were men. Lawyers say the amount of back-pay owed could amount to more than £30m. Next, which argued that pay rates for warehouse workers were higher than for retail workers in the wider labour market, said it would appeal against the ruling. Law firm Leigh Day has also filed similar claims against Asda, Tesco, Sainsbury’s, Morrisons, and Co-op, involving a total of 112,000 staff.
HSBC
HSBC ‘s new Chief Executive Officer, Georges Elhedery is reportedly considering plans that could strip out layers of middle management at Europe’s largest bank, similar to what happened at other major banks, Citigroup and Standard Chartered.
European trade
UK Prime Minister Keir Starmer meets with German Chancellor Olaf Scholz in Berlin today to discuss a new partnership between the countries, on his first bilateral trip since taking office last month. The British leader, who will also travel on to Paris, has pledged to rebuild trust with European allies damaged by Brexit, and is set to hold talks with Scholz about launching a new bilateral accord with Germany.
Housing
The number of properties up for sale in the UK has hit its highest level in seven years and buyer demand is rising as a recovering economy boosts consumer confidence, according to Zoopla. The property website said each estate agent had an average of 33 properties on their books in the four weeks to 18th August, up 14% from a year earlier.
Oasis to definitely maybe boost the economy
The upcoming Oasis reunion tour is expected to significantly benefit the UK economy, with estimates suggesting it could be worth up to £1bn. Dan Coatsworth from AJ Bell highlighted the potential for substantial spending on accommodation, travel, and merchandise, saying the band’s 2025 stadium shows could deliver a cash injection similar to the economic boost from Taylor Swift’s Eras tour. RSM UK economist Thomas Pugh said the tour will “undoubtedly be a phenomenal sellout” but flagged concern over a surge in the cost of accommodation.
Latest Insolvencies
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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.