Business news 30 January 2025
Reeves sets out plan to drive growth. Bailey warns of big decisions ahead. Starmer: ‘Deregulation is essential’. Late payments interest hike will pull in £500m. Markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Reeves sets out plan to drive growth
Rachel Reeves has set out the Government’s plan to deliver economic growth, saying that support for a number of infrastructure projects will see Labour go “further and faster” than previous governments. She added that the “consistently set out strategy” has been designed to “grow the supply side of our economy.” The Chancellor confirmed that the Government supports plans for a third runway at Heathrow Airport, saying that doing so could create 100,000 jobs. She also revealed an ambition to build “Europe’s Silicon Valley” between Oxford and Cambridge with initiatives that will add £78bn to the UK economy in the next 10 years. Ms Reeves also said Government guidance on building major projects will be reviewed in order to support investments outside of the South East, meaning “investment in all regions is given a fair hearing by the Treasury.” The Chancellor also confirmed plans to invest in two green energy projects through the National Wealth Fund, with £65m going to electric vehicle charging company Connected Kerb and £28m to be invested in Cornish Metals, which provides the raw materials for solar panels, wind turbines and electric vehicles.
Bailey warns of big decisions ahead
Andrew Bailey, the governor of the Bank of England, says that while he is “very supportive” of the Government’s efforts to stimulate economic growth, “very big decisions” are necessary to manage Britain’s escalating public debt. Addressing the Commons Treasury Select Committee, he identified climate change and an ageing population among significant challenges to public finances, describing them as “very big structural headwinds.” Mr Bailey also raised concerns about proposed changes to mortgage lending rules, suggesting they could lead to increased home repossessions. Furthermore, he discussed plans to reduce the Bank’s reserves, saying lenders want to hold £400bn to £500bn with the Bank as it reduces the size of its balance sheet.
Starmer: ‘Deregulation is essential’
Sir Keir Starmer has vowed to cut through “thickets of red tape,” saying that “deregulation is essential” as the Government looks to attract investment and accelerate growth. Noting that it “may seem like an unusual goal for Labour politicians,” the Prime Minister said: “If we don’t curb regulator overreach, then we won’t unlock the investment needed for a more prosperous future.”
Late payments interest hike will pull in £500m
The recent increase in late payment interest rates by HMRC is projected to generate an additional £500m for the tax office in the 2025/2026 financial year. Starting from April 6, 2025, the interest rate will rise to the Bank of England base rate plus four percentage points, potentially reaching 8.75%. Andrew Park, tax investigations partner at Price Bailey, describes this change as a “form of double punishment,” highlighting concerns over the lack of recourse against late payment interest. Critics argue that while some taxpayers may miss deadlines due to negligence, many face genuine financial struggles. An HMRC spokesperson said: “The interest we charge and pay is fair.” Meanwhile, the tax office plans to hire 5,000 more tax inspectors to recover £6.5bn in unpaid taxes.
Shoplifting
Shoplifting is out of control and cost retailers a record £2.2 billion, a 21% increase in the year to 31st August compared to the previous 12 months, the British Retail Consortium (BRC) said.
“Retail crime is spiraling out of control,” said Helen Dickinson, chief executive officer of the BRC. “Every day this continues, criminals are getting bolder and more aggressive.”
The issue was worsened by the Tory’s decision to lower scrutiny of thefts worth less than £200, a policy the Labour government plans to scrap.
Markets
Yesterday, the FTSE 100 closed up 0.28% at 8557.81 just short of an all time high as the Chancellor ruled out tax rises in the spring and the Euro Stoxx 50 closed up 0.67% at 5230.66. Overnight in the US, ahead of the FED announcement (they held rates as expected at 4.25%-4.5% and Jerome Powell said the Fed isn’t in a hurry to cut and is pausing to see further progress on inflation, noting a strong economy with low unemployment did not require monetary stimulus.), the S&P 500 dropped 0.47% to 6039.31 and the NASDAQ fell 0.51% to 19632.32.
It was a big night for post market earnings releases. Meta (facebook) rose as Mark Zuckerberg predicted a “really big year” in which its AI assistant will become the most widely used. Tesla gained on its robo-taxi plans and forecast a sales recovery. But Microsoft fell after it projected slow growth in its cloud business.
Meta Platforms reported Q4 revenues of $48.3bn (Up 21%) with net income of $20.8bn up 49% and EPS of $8.02 (up 50%). The business increased ad prices by 14% over Q4. The numbers beat market expectations.
Microsoft reported Q2 EPS of $3.23 up 10% on revenues of $69.6bn up 12% beating EPS forecasts of $3.11. The board said data cloud was up 21% at $40.9bn representing the largest single segment of Microsoft.
BT Group trading update said Q3 reported profit before tax rose 1% to £427m on adjusted revenues of £5.2bn down 3%. The board confirmed FY25 financial outlook.
Tesla reported adjusted earnings of $0.73 per share below forecasts of $0.75 with operating income down 23% at $1.58bn due to higher costs of R&D and artificial intelligence and lower selling prices for vehicles. Tesla said it delivered 1.78m cars down 1% from 2023.
Molson Coors said it bought an 8.5% stake in Fevertree Beverages for £71m to expand its portfolio of mixers and non alcoholic drinks.
This morning on currencies, the pound is currently worth $1.2455 and €1.1955. On Commodities, Oil (Brent) is at $76.28 & Gold is at $2774. On the stock markets, the FTSE 100 is currently up 0.15% at 8570.75 and the Eurostoxx 50 is up 0.67% at 5266.
Meanwhile the ECB is widely expected to reduce its deposit rate by 25 basis points to 2.75%.
Autos
Automakers made fewer cars in the UK last year, and output is poised to fall again in 2025. Potentially to the lowest level in more than 70 years. Nissan, Tata Motors’s Jaguar Land Rover and other manufacturers made just below of 780,000 cars in 2024, down 14% from 2023.
Tax rises hit big businesses
Darren Jones, the Chief Secretary to the Treasury, has acknowledged that tax rises are impacting larger firms, saying: “It’s a cost for business. That’s absolutely clear.” He explained that while the hike in employer National Insurance aims to protect smaller businesses, it inevitably places a burden on bigger firms with greater cash flow. More than half of businesses will not be affected, he noted, but acknowledged that larger companies are “having to burden some of those extra costs.”
CEO exits hit record high
In 2024, a record 202 CEOs departed from their positions, according to Russell Reynolds Associates, marking a 13% increase from the previous year and surpassing the six-year average of 186. The technology sector was particularly affected, with 40 CEOs leaving. Activist investors played a significant role, ousting 27 CEOs, nearly three times the number in 2020. Additionally, almost a quarter of the departures were due to planned succession processes, indicating a shift towards grooming internal talent. Margot McShane, co-lead of Russell Reynolds’ global board and CEO practice, said: “It is only getting harder to be a CEO, where you’re navigating uncharted territory.”
House sales soar in January
The UK housing market has experienced its most robust start in three years, with agreed sales increasing by 12% in January. Data from Zoopla shows that the first month of 2025 also saw a 10% rise in listings compared to the previous year, despite high mortgage rates and low consumer confidence. Zoopla is predicting a 2.5% rise in average house prices over the next year, with sales expected to reach 1.15m, a 5% increase from 2024.
United Utilities
United Utilities said it has accepted the final determination of price controls set out by water industry regulator Ofwat in December, which is set to raise £13 billion for the firm to invest in infrastructure across the North West of England. The Ofwat scheme, covering the five years to March 2030, will see the Warrington, England-based water and wastewater services provider increase its prices for customers, meaning typical households across the UK will see bills rise by an average of £86 this April.
Chancellor to publish tax return
Chancellor Rachel Reeves has announced that she will publish a tax return, just hours after saying she was not planning to. Officials have also announced that Prime Minister Sir Keir Starmer will make his tax return public. Sir Keir published tax figures last year, with it shown that he paid £99,431 in tax after making £275,000 in capital gains. The data also revealed that he paid £44,308 in income tax in 2022/23.
Abramovich could owe £1bn in tax
Russian oligarch Roman Abramovich could owe the UK up to £1bn, having attempted to avoid tax on hedge fund investments. While investments worth $6bn were routed through companies in the British Virgin Islands, it appears they were managed from the UK and should have been taxed there. Lawyers for Mr Abramovich insist that he “always obtained independent expert professional tax and legal advice” and “acted in accordance with that advice.”
Wolfson backs call for NI hike rethink
Lord Wolfson, the chief executive of fashion retailer Next, has backed an attempt to change the planned hike in employer’s National Insurance contributions, supporting Baroness Noakes’ proposed amendments to the Bill. Under plans set out in October’s Budget, employer NI contributions will rise from 13.8% to 15%, while the threshold at which employees’ wages are eligible for the tax will fall from £9,500 to £5,000 per year. Lord Wolfson believes that the tax rises will make it “harder and harder for people to enter the workforce,” with this disproportionately hitting entry-level jobs. Baroness Noakes has proposed “a phased introduction of the reductions to the secondary threshold” of the tax.
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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.