Business news 30 April 2024
Shop price inflation showing signs of normalising. Vacancies fall again in March. Mortgage repayments up 60% since 2021. FTSE 100 continues record run. And more business news that we thought would interest our members.
James Salmon, Operations Director.
Shop price inflation showing signs of normalising
Shop prices rose 0.8% year-on-year in April, according to the British Retail Consortium (BRC). April’s reading is down on the 1.3% increase recorded in March and marks the lowest increase since December 2021. Food price inflation, which hit 15.7% a year ago, has fallen to 3.4%, while non-food inflation – which hit 5.9% in March 2023 – has fallen to minus 0.6%, meaning prices are lower than they were a year ago. BRC chief executive Helen Dickinson said shop price inflation levels “are showing signs of normalising.”
Vacancies fall again in March
Job vacancies fell by more than 17% in the year to March, according to analysis from jobs search engine Adzuna. The labour market report also shows that vacancies fell 0.5%, month-on-month. The total number of vacancies fell by 862,000, with this marking the fifth consecutive month where there was a decline in job openings. The report shows that there are 1.87 jobseekers per vacancy. This is the highest since August 2021 and is up from 1.49 a year ago. Adzuna found that advertised salaries rose by almost 3% over the past year and increased by 0.4% between February and March. The average earnings on listed job postings stood at £38,638. Andrew Hunter, co-founder of Adzuna, warned of a “difficult” environment for jobseekers, saying: “Vacancies have fallen again in March, unemployment is up and competition for open roles is intensifying across most sectors.”
Mortgage repayments up 60% since 2021
Figures from Zoopla show that mortgage payments have risen by 60% since 2021, with the average annual mortgage payment having risen to £11,400 from £7,000. Richard Donnell, executive director of research at Zoopla, said that while two-thirds of the increase is a result of higher mortgage rates, a third is down to the fact that average house prices are 13% higher than they were in March 2021. Zoopla also found that the number of property sales agreed rose 12% over the year to March.
FTSE 100 continues record run
The FTSE 100 climbed 43.76 points, or 0.5%, yesterday, hitting a new record high of 8,185.69 points. The share index has made gains on seven of the past eight days and is on course to extend this run.
Markets
Yesterday, the FTSE 100 closed up 0.09% at 8147.03 and EuroStoxx 50 was down 0.45% at 4984.23.
Overnight in the US the S&P 500 rose 0.32% to 5116.17, the Nasdaq rose 0.35% to 15983.08. The pound is currently worth $1.2537 and €1.1715. Brent is at $88.59, Gold is at $2317. The FTSE 100 is up .25% at 8167 and the Eurostoxx 50 is down 0.31% at 4965.
Brexit trade checks
Meat and dairy products, plants and seeds are among the goods that will now be subject to physical checks when imported to Britain from the European Union. Importers say the checks will adding significant costs which they will have to pass on to consumers. The government said its new border model would “improve our biosecurity”
HSBC
The HSBC CEO Noel Quinn has unexpectedly announced he will retire after nearly 5 years in the role. He will stay in place until a successor can be found. “After an intense five years, it is now the right time for me to get a better balance between my personal and business life,” Mr Quinn said.
Samsung
The boom in AI has pushed the semiconductor division of Samsung back into profitability for the first time in 2 years with memory chip sales almost doubling to over $12billion.
Whitbread
Premier Inn owner Whitbread is to cut 1,500 jobs from its 37,000 strong work force as it closes restaurants and expands its hotel business. It plans to cut its number of branded restaurants by 238 with 126 being sold and 112 being converted into more hotel rooms, adding 3500 rooms.
China
Chinese manufacturing expanded for the second consecutive month in signs the country might be in a reGreen covery.
Green G7
Energy ministers representing the G7, reportedly reached a deal to phase out all coal-fired power plants by 2035.
Businesses call for tax incentives to invest in employee health
Businesses are urging ministers to provide tax incentives to invest in employee health, according to a report by the British Standards Institute. The report reveals that 64% of UK business leaders support financial incentives to recruit older people, enabling them to work for longer. The report also highlights the need for the Government to invest in mental health and well-being support, as worsening mental health has contributed to a rise in long-term sickness and unemployment.
Taxes may rise unless long-term sickness benefits are tackled
Rishi Sunak has warned that taxes will have to rise unless the bill for long-term sickness benefits is tackled. The Prime Minister said the increasing number of people out of work is damaging the economy, warning that the public faced a choice between a “more rigorous” benefits system and higher taxes.
Fiscal drag will leave low earners worse off after tax cuts
Analysis suggests that fiscal drag means those earning less than £26,000 will actually be worse off after cuts to National Insurance. Experts have refuted the Prime Minister’s claim that his tax cuts will leave people £900 better off, with fact-checking organisation Full Fact clarifying that average workers – those on £35,000 per year – will actually save just £340 annually, while workers earning less than £26,000 will be worse off “when all tax changes are included.” The difference is due to fiscal drag, with the thresholds at which workers pay tax, or are taxed at higher rates, having been frozen since 2022. After Chancellor Jeremy Hunt announced the 2p cut during the spring Budget, his Labour counterpart Rachel Reeves described fiscal drag as a “big problem.” “There are going to be millions more people paying tax by the end of the forecast period than there were previously, because as inflation and incomes grow, but the tax threshold doesn’t increase, more people are dragged into paying tax even though they’re really no better off because prices have just increased. I think that is a problem,” she said. The Institute for Fiscal Studies has said the latest NI cuts “just serve to give back a portion of the money that is being taken away through other income tax and NI changes.”
Lawson warned against merging NI and income tax
An unpublished memo from Nigel Lawson, Margaret Thatcher’s tax-cutting Chancellor, warns against merging National Insurance and income tax as it would “create many losers,” including pensioners. The memo, found in the archives of the Margaret Thatcher Foundation, contradicts current Prime Minister Rishi Sunak’s ambition to scrap the tax on workers. The Institute for Fiscal Studies estimates that abolishing National Insurance would cost the public finances over £40bn and pensioners an extra £944 a year. Jonathan Ashworth, the shadow paymaster general, said Mr Lawson’s memo is “the unexploded bomb which blows apart Rishi Sunak’s case for the merger of income tax and National Insurance,” adding that if the Prime Minister wants to persist with that plan, “he will need to explain why he is ignoring the advice of his own hero and instead asking pensioners to pay the price.”
Tax on fossil fuel companies could raise $720bn to tackle climate crisis
A fossil fuel tax on companies in the wealthiest nations could raise as much as $720bn by the end of the decade, according to a new report. The tax would be levied on extraction of fossil fuels in the world’s richest economies and could play a crucial role in combating the worst impacts of the climate crisis if it is directly diverted to helping countries transition to greener sources of energy and compensate the most vulnerable people. The report recommends levying a $5 tax for every ton of carbon pollution starting from 2024 and increasing it by $5 a year.
Online service to boost state pension income
HMRC and the DWP have launched a new online service which allows people to check for and fill any gaps in their National Insurance record to boost their state pension income. Users can select the years they wish to pay to fill the gaps and pay securely through the service. The deadline to pay voluntary contributions has been extended to April 5, 2025, for those affected by new state pension transitional arrangements. The new service aims to provide state pension “certainty” for retirement planners. Financial Secretary to the Treasury, Nigel Huddleston, said the service will make a real difference for thousands of pensioners.
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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.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.