Business news 30 August 2023

James Salmon, Operations Director.

Shops see price rises slow. Fifth delay for border checks on food. MP calls for rate rise pause. Mortgage lending falls in Q2. Home sales set to be lowest since 2012.  And more business news that we thought would interest our members.

Shops see price rises slow

Price rises in British shops have slowed to their lowest rate since October, data from the British Retail Consortium (BRC) shows. Prices rose 6.9% in the year to August, down from 8.4% in July. Fresh food inflation, which slowed to 11.6% in August, from 14.3% in July, was the key factor in the slowdown in price growth. Overall food inflation slowed from 13.4% to 11.5%. The BRC said it expects overall food price inflation to continue to fall but warned that the prices of some items could rise slightly as a result of a Russia pulling out of an agreement that allowed the safe passage of grain out of Ukraine. BRC chief executive Helen Dickinson also noted that there are “supply chain risks for retailers to navigate.”

Fifth delay for border checks on food

Ministers have announced that the roll out of post-Brexit border checks on food products coming from the EU has been delayed for a fifth time. The first stage, due to have started in October, will begin in January, with physical checks and other requirements coming in over the next year. The Cabinet Office said the Government has “listened to the views of industry” and agreed to a delay of three months, adding that this will “give stakeholders additional time to prepare for the new checks.” William Bain, head of trade policy at the British Chambers of Commerce, said: “Businesses will be pleased with this clarity as they prepare for the challenging shift to a digital trade system.” “Businesses are making investment and supply chain decisions for the long term and need to be confident that infrastructure is in place on time,” he added.

MP calls for rate rise pause

MP John Baron, a member of the Commons Treasury Committee, believes that the Bank of England may be able to stop raising interest rates if inflation continues to slow. He said there is “a risk of overshoot,” adding that the Bank “has had to raise rates much quicker than it should because it’s been so far behind the curve – pauses are now needed to assess impact, given the six to nine months typical time lag in rises affecting the economy.” He added that the Bank’s rate setting committee risks “compounding its original error” by raising rates once again.

Half of people claiming new state pension receive full amount

According to data from Responsible Life, only half of people claiming the new state pension are receiving the full amount. This compares with almost three quarters (74%) of people who are claiming the old basic state pension who receive at least the full rate.

Mortgage lending falls in Q2

Figures from UK Finance show that there has been a decline in mortgage lending, with lending for house purchases down 28% year-on-year in Q2. UK Finance said levels of housing market activity “have remained very low by comparison with recent years” in the first half of 2023. The industry body said this was driven by the “significantly greater affordability challenges currently faced by borrowers,” with rising interest rates delivering a hike in the cost of mortgages. The report shows that record numbers of borrowers chose to refinance with their existing providers, with 84% of remortgaging deals internal transfers. This compares to an average of 77% across 2022.

Home sales set to be lowest since 2012

Data from Zoopla shows that the number of home sales over this year is on course to be the lowest annual total for 11 years. The number of housing sale completions in 2023 is set to fall 21% year-on-year to 1m – with this the lowest level since 2012. The study also suggests that annual house price growth will slow to 0.1%. Richard Donnell, executive director at Zoopla, said: “House price growth has slowed rapidly over the last year as demand weakens in the face of higher mortgage rates.”

Redundancies suspended while Wilko rescue bids considered

Redundancies at Wilko have been suspended while administrators consider rescue bids for the retail chain. Following a meeting with PwC, which is overseeing the sale of the retailer, GMB union national secretary Andy Prendergast said that the pause on any potential job losses was a “positive development.” He added, however, that it remains a “time of incredible stress and worry” for staff. Mr Prendergast also warned that Wilko “is not out of the woods by any means.” The GMB has asked Business Secretary Kemi Badenoch for reassurance that “all steps will be taken to protect jobs as part of this process.” A number of offers are believed to have been made to administrators at PwC, with Doug Putman, the owner of HMV, and private equity business M2 Capital both entering last-minute bids.

UK scraps EU share trading rule

As officials look to boost the City’s reputation as an open and competitive global financial centre, the Financial Conduct Authority has scrapped a rule that limited where investors could trade shares. The share trading obligation, inherited from the EU, restricted financial companies regulated in Britain to trading shares on UK-based platforms. Now traders can buy or sell shares off-exchange, or on any UK or overseas-based platform, giving them more choice and increasing their ability to find the best prices.

Burger King

Burger King is being sued in Florida over claims its advertising misleads consumers on the size of its Whopper burger.

FCA?

The FCA has said the number of fraudsters impersonating it have doubled.

Air Traffic Control

Martin Rolfe, head of National Air Traffic Services has said they have found the cause of their system failure on the bank holiday. They received data which could not be processed and this trigger a fail safe shutdown to stop controllers working on incorrect data and switched systems to a manual system. Mr Willie Walsh, formerly of BT said he believed Nats should be fined and that the company had a “lot of questions to answer”. Adding “I find it staggering I really do. This system should be designed to reject data that is incorrect, not to collapse the system”

Investors question efforts to tackle slavery in supply chains

Investors have urged companies to increase efforts to tackle modern slavery, human trafficking and forced labour in their supply chains. Sustainable investment firm CCLA, alongside a coalition of investors including Rathbones and Schroders, have expressed concern that only a small number of firms have shared findings of modern slavery in their supply chains. This, they say, makes it difficult for investors to assess corporate efforts to address the issue. CCLA said that while the majority of the companies had published a modern slavery statement and average compliance with the Modern Slavery Act was 89%, only 20% reported action to find cases in their supply chain, 3% reported action to fix it and 18% reported action to prevent it

Latest Insolvencies

Petitions to wind up (Companies) – ALH ESTATES LIMITED
Petitions to wind up (Companies) – GREENFIELD WORKS LTD
Petitions to wind up (Companies) – CATER PROPERTY INVESTMENT (DUNDEE) LIMITED
Appointment of Liquidators – TREETOPS MANAGEMENT CONSULTANCY LTD
Petitions to wind up (Companies) – CALEDONIAN CARE CONSULTANTS LTD
Petitions to wind up (Companies) – DOMANI INTERIORS LIMITED

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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.

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