Business news 29 September 2023

James Salmon, Operations Director.

GDP Climbs. Public borrowing could be £40bn higher than forecast by 2027. SMEs feel no political parties are on their side.  And more business news that we thought would interest our members.

GDP Climbs

UK GDP in the second quarter of 2023 was 0.2% higher than the quarter before, figures from the Office for National Statistics showed today.

Economists polled by Reuters had forecast a reading showing quarterly growth of 0.2%, unchanged from an initial estimate published on 11th August.

The economy as a whole in the second quarter of 2023 was 1.8% larger than in the final quarter of 2019, the last full quarter before the start of the pandemic.

IFS: Public borrowing could be £40bn higher than forecast by 2027

The Institute for Fiscal Studies (IFS) says there is a 90% chance that UK public borrowing will be higher than the Office for Budget Responsibility (OBR) has forecast. It says borrowing in the 2027/28 tax year is likely to be £40bn higher than the OBR forecast in March. If this is the case, borrowing would be 3.1% of GDP, far exceeding the 1.7% forecast. The OBR said there is just a one-in-ten chance that borrowing in 2027/28 will be lower than the OBR forecast. Borrowing in the 2022/23 financial year totalled £128bn, equal to 5.1% of GDP.

A Treasury spokesman said: “This report reaffirms our need to taking the difficult, but necessary decisions to balance the books to halve inflation this year.” They added: “Additional borrowing right now would fuel inflation, push up mortgage rates and hike up debt interest repayments – diverting money away from our public services.”

SMEs feel no political parties are on their side

A poll of 500 businesses for Bibby Financial Services shows that SMEs lack confidence in all political parties. Nearly one in four UK SMEs struggled when asked to identify with a political party, with 22% unable to identify which party best suited their needs.

Of the businesses that felt a political party served their needs, 33% said Labour, while 26% said the Conservatives. When asked about the most critical issues, 71% of firms said economic growth and job creation; 68% said tax policies and incentives, while 46% said access to affordable financing. On policies they would like to see rolled out, 65% want tax incentives, while 57% called for access to low interest loans or grants for business expansion and job creation. Almost a third (30%) of SMEs would also like to see streamlined and simplified regulatory processes.

Theo Chatha, chief financial officer at Bibby Financial Services, said the research indicates that SMEs “feel abandoned by politicians, in general.” He added that small businesses desperately want policies and action that reflect the Government’s “genuine belief in the value that SMEs deliver to the UK economy overall.” “All SMEs really need is a supportive framework. The rest they can do for themselves,” he added.

Office returns prompt childcare concerns

Moving away from remote working is costing parents more than £600 extra per month in childcare. Analysis by Pebble, a flexible childcare service, shows that half of the 2,000 parents polled said they were planning on quitting their jobs as a result. A third said they have already moved to a company with more flexible working. The research indicates that employers are requesting an additional two days per week in the office. Two in five parents said they are subsequently struggling to pay the extra childcare costs.

Car Production

UK Car Production dropped by almost 10% in August, following six consecutive months of growth, new figures from the Society of Motor Manufacturers and Traders show. A total of 45,052 models rolled off factory lines, the industry body said.

Cost of living hits Xmas

Although improved Consumer confidence is giving some businesses some optimism, a survey by PwC showed  30% of people intended to spend less this Christmas. This sentiment was strongest among people on lower incomes, who said the main reason for cutting back was the rising cost of living. Although the Bank of England has paused its interest rate hikes, the effects of the 14 previous rises are filtering through the system as people renew mortgages and landlords raise rents.

Severn Trent

Severn Trent moved to bolster its finances, unveiling a £1 billion fund raise which includes a £500 million investment from Qatar Investment Authority and a £500 million placing. The news came as the water company unveiled plans to invest £12.9 billion between 2025-2030 as part of its business plan for the regulatory period beginning 1 April 2025 and ending 31 March 2030 as it seeks to cut leakages and sewage spills.

US Economy

The US Economy maintained a fairly strong pace of growth in the second quarter, the government confirmed on Thursday, and appears to have gathered momentum this quarter amid a resilient labor market. US GDP increased at an un-revised 2.1% annualized rate last quarter, the Commerce Department said in its third estimate of GDP for the April-June period on Thursday. Economists expected GDP for the second quarter would be un-revised.

Overnight, the DOW rose 0.35% the S&P 500 rose 0.59%  and the NASDAQ rose 0.83%. The dollar fell against most currencies and dropped against the pound to $1.224

Meanwhile the US Government looks set to shutdown on the 1st October as politics prevents lawmakers coming to a deal on funding.


Oil buyers across the planet are facing some of the highest premiums for supplies they’ve seen in months — or longer — as dwindling stockpiles at the largest US storage hub reverberate through markets from Asia to the Middle East to Europe. Oil Prices were set for a weekly gain of around 2% after regaining ground on Friday as strong holiday demand from China and persistently tight US fundamentals outweighed expectations of possible supply increases from Saudi Arabia.

Wilko creditors face losses
Unsecured creditors in Wilko are facing steep losses, according to an estimate from the collapsed retailer’s administrator. PwC has told unsecured creditors that they were likely to see recoveries of between 4% and 8% of their debts. While the Pension Protection Fund, the industry-funded lifeboat, is expected to be repaid the £20m it is owed as a secured creditor, it is also owed millions of pounds more as an unsecured creditor. Two other major creditors, Barclays and Hilco, are also expected to be repaid the £2.4m and £39.9m they are respectively owed.

London closes in on NY in financial centre rankings
London is closing in on New York as the world’s leading financial centre, according to the ZYen Global Financial Centres Index. While New York held onto top slot for a fifth straight year, London gained ground in the index which ranks cities on areas like regulation, skills depth and availability of technology. London’s rating climbed 13 points to 744 while New York was up three points to 763.

Buyer’s market sees discounts hit £12k
Analysis from Zoopla shows that buyers are taking advantage of the market and scoring discounts that average 4.2%, with £12,125 typically being shaved off asking prices. The report shows that discounts are at their highest level since March 2019. Zoopla also revealed that house prices have fallen by 0.5% in the last year, marking the first time in a decade that the property platform has recorded a year-on-year decline in prices. Zoopla believes there will be a “modest” decline in house prices in the coming months and into the start of 2024. It added that sales are set to be 20% lower this year than last.

Average five-year mortgage falls below 6%
The average rate on a five-year fixed mortgage has fallen below 6% for the first time since early July, with data from Moneyfacts showing that the typical rate has dropped to 5.99%. The average two-year deal has a rate of 6.5%. The fall in loan rates follows the Bank of England’s decision to hold interest rates steady at 5.25% after 14 consecutive increases. Since the Bank confirmed the decision, a number of lenders have opted to reduce prices, with some – including Nationwide Building Society, HSBC and NatWest – cutting the cost of a number of deals.

UK facing ‘decisive and permanent shift to a higher tax economy’ – IFS
Households in the UK are facing a combined tax bill of £114bn, according to a report by the Institute for Fiscal Studies (IFS). The Government is set to raise £3,500 more per household by next year’s election than they were when voters went to the ballot box in 2019, with the 4.2% hike making it the biggest tax-raising Parliament on record. The IFS report details that the increase will be driven by stealth taxes and a hike in corporation tax. The tax burden is expected to rise to about 37% of GDP from 33% in 2019, the steepest increase since records began in the 1950s. Ben Zaranko, senior research fellow at the IFS, said: “It is likely that this Parliament will mark a decisive and permanent shift to a higher tax economy.” Former Tory leader Sir Iain Duncan Smith said: “The scale of taxation stifles hard work, innovation and revenues – as it is well known that higher levels of taxation lead to falling tax receipts,” while MP Sir John Redwood commented: “We are spending too much and getting too little back for it. We are taxing too much and we are not growing fast enough. When you grow faster you’ll get more tax revenues.” A Treasury spokesman said: “The Chancellor has said he wants to lower the tax burden further but sound money must come first. Driving down inflation is the most effective tax cut we can deliver right now, which is why we are sticking to our plan to halve it, rather than making it worse by borrowing money to fund tax cuts.”

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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.

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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


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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.

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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?

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Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!

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