Business news 30 October 2023

James Salmon, Operations Director.

Tighter credit conditions drive profit warnings. .Brits grow more pessimistic over the future but Small firm confidence starts to climb. Restaurant insolvencies, business taxes, audit reform, AI, insurance & more business news that we thought would interest our members.

Tighter credit conditions drive profit warnings
The proportion of businesses blaming profit warnings on tighter credit conditions has risen to the highest level since the financial crisis, according to new data from EY. In the third quarter of 2023, 33% of profit warnings cited challenges securing credit. EY’s quarterly report, which tracks profit warnings from companies listed on the London Stock Exchange, found that almost 18% of all listed companies have issued profit warnings in the past year. However, the survey also found that the quarterly number of profit warnings issued had fallen year-on-year for the first time since 2021. Jo Robinson, a partner at EY-Parthenon, said the growth of profit warnings linked to credit conditions “indicates that pressure on businesses is unlikely to ease for the foreseeable future.”

Brits grow more pessimistic over the future
Analysis by the Thinks Insight & Strategy research institute shows that levels of pessimism among UK voters are now greater than at the height of the pandemic and during the 2008 financial crisis. The share of people pessimistic about Britain’s future on issues including the economy outweighs those who are optimistic by a margin of -39%. This is up from a margin of -34% recorded in September 2020.

Restaurant insolvencies soar
Research by Mazars shows that the number of restaurant companies becoming insolvent has risen by nearly half in the past year. The total increased from 1,517 in 2021/22 to 2,214 in 2022/23, an increase of 46%. Paul Maloney, associate director at Mazars, said the insolvencies are largely down to the rising costs of servicing debt and the squeeze on consumer spending caused by rate rises and inflation.

Small firm confidence starts to climb
Small businesses are slowly regaining confidence in the economy, according to a quarterly report from the Federation of Small Businesses (FSB), with this coming despite falling revenues and tightening recruitment. Optimism was measured at -8 points in Q3, with this up from -14.2 points seen in Q2 but below the Q1 reading of -2.8. The FSB report shows that most firms do not expect to see growth over the next year, while one in eight expect to contract. It was also found that two in five small businesses reported a fall in revenue in the three months to the end of September. FSB chair Martin McTague said that after the “economic turmoil wrought by the cost of doing business crisis,” there are “signs of stabilisation” in small firms’ performance. “We need to beware that stabilisation does not turn into stagnation and that intentions to invest and grow are not thwarted by economic circumstances,” he added.

MPs and peers call on PM to accelerate audit reform
MPs and peers are urging the Prime Minister to speed up reforms to the accounting industry to help prevent further high-profile corporate collapses. A cross-party group of politicians, including Dame Margaret Hodge, has written to Rishi Sunak asking him to commit to audit reform by the end of this parliament. The Government said that it would overhaul the audit industry after the collapse of the outsourcer Carillion in 2018. While ministers committed themselves to drafting rules on audit reform earlier this year, it has been suggested that the Government may delay the changes until after a general election. Anne Kiem, chief executive of the Chartered Institute of Internal Auditors, said: “It is vital this bill is voted on in the next parliamentary session and that the Government don’t kick the can down the road until after the election.” It is noted that the Financial Reporting Council, which is set to be replaced by a new body called the Audit, Reporting and Governance Authority, found that about a quarter of the major audits it inspected required improvement in the most recent annual report on the sector.

Hunt to reject business tax cut extension
Jeremy Hunt is expected to reject demands to extend a tax cut aimed at boosting corporate investment in Britain. Mr Hunt will tell business bosses that tight constraints on public finances prevent him from changing course. The multibillion-pound “full expensing” investment relief allows firms to claim back the cost of investments in IT equipment and machinery by writing it off against tax on their profits. The policy, launched in March’s Budget, had an initial price tag of £8bn this year, with the cost of making it permanent estimated at £10bn a year. Business leaders argue that the policy should be extended to counter Britain’s worsening growth outlook.

FOS complaints soar in H1
Complaints to the Financial Ombudsman Service (FOS) increased by more than 13,000 in the first half of 2023, compared to H2 2022. The FOS received 93,114 complaints from January to June, up from 79,921 in the second half of last year. Banking and credit complaints were up by more than 6,000, with more than half of these related to fraud or scam cases. Hargreaves Lansdown accounted for 95 of the 136 complaints received in the investments category, while 92 were linked to Scottish Widows. Overall, Barclays was the subject of the most complaints, with 5,519, followed by Santander (3,562) and HSBC (3,422). Abby Thomas, chief executive at the FOS, said: “Financial complaints have risen again, with cases particularly increasing in the banking and insurance sectors,” adding: “Given the economic challenges people are facing, it’s more important than ever that they feel protected. Whatever their grievance, consumers should expect fair and reasonable treatment from their provider.”

FCA urged to publish regular debanking data
The Federation of Small Businesses (FSB) has urged the Financial Conduct Authority (FCA) to provide clarity on debanking, arguing that the watchdog should publish a complete list of UK bank account closures. More than a million accounts have been shut since 2019, with banks this year set to beat the previous record of 343,500 set in 2022. This data has been made public via a Freedom of Information request but the FSB wants the FCA to commit to releasing data on debanking every three months. Tina McKenzie, policy chair of the FSB, said: “Regular data on how widespread the issue is, and whether certain demographics are more affected than others, is very much needed.” The Government plans to give customers up to 90 days to challenge closures, with banks obliged to explain their reasons.

Watchdog warning as UK looks to lead on AI
Ian Liddicoat, chief technology officer at Adludio, says that while post-Brexit Britain can play a leading role in designing a global standard for legislation that governs AI safety, the Competitions and Market Authority (CMA) offers a “significant stumbling block.” He suggests that the level of aggression that the competition watchdog has applied to recent deals and the “somewhat short-term nature” of its decision-making are “real issues for the vision of world-leading, pro-AI Britain.” Mr Liddicoat says that while it remains imperative that the CMA is able to maintain a level of scrutiny that provides safety for businesses and consumers, current and future governments “must force the CMA to do this without constraining innovation to such an extent that the UK becomes a trivial player in the field.”

Britain leads on AI investment but a skills shortage looms
Research by the City of London Corporation and EY shows that Britain is leading the race in AI investment in Europe, with private investment reaching £3bn in 2022, nearly double that of France, Germany, and the rest of Europe combined. With investment in AI growing as companies look to boost productivity, develop products and improve the customer experience, the report says “a strong skills base” is necessary and suggests improving Britain’s short-term business mobility visas to help to secure talent from overseas. This comes with manufacturers having warned of a skills shortage, with a lack of technical skills hampering automation and the wider adoption of AI. Lobby group Make UK found that 48% of companies have cited a lack of technical skills as a barrier to investing in automation.

Car insurance premiums up by nearly 50% in a year
The price of car insurance has surged by nearly 50% in a year, with insurers passing on higher repair bills and regulatory costs to drivers. According to Compare the Market, the average premium for drivers in September was £848, with this £278 more than the same month last year. Drivers aged 16 to 24 are facing an average bill of £1,893, a 52% increase from last year. Insurers have attributed the rising prices to higher car repair costs and new rules from the Financial Conduct Authority. The Association of British Insurers said: “Insurers are doing all they can to keep motor insurance competitively priced. The market is experiencing increasingly high costs.” A study by EY has found that motor insurers pay out almost £1.10 in claims and expenses for every £1 in premium.

Home insurance costs could rise by a third
Analysis by EY suggests that home insurance prices will increase by more than a third in the next two years, with premiums climbing as the sector looks to keep up with the cost of claims. The study predicts that home insurance prices will increase by 36% this year and next. Association of British Insurers data shows that prices have already risen by 10% this year. EY says insurers saw their net combined ratio – measuring claims and costs as a proportion of premiums – hit 122% last year. Rodney Bonnard, EY’s UK financial services market leader, said insurers are lifting prices in response to the rising cost of rebuilding, reinsurance and salaries, saying the only place they can recover these costs “is ultimately the consumer.”

Chancellor urged to serve up tax breaks to save pubs
For the first time since records began three decades ago, the number of alcohol-serving venues in Britain has dropped below 100,000, with over 44,000 pubs, restaurants, and hotel bars closing permanently since 2003. To halt the decline, hospitality leaders have urged Chancellor Jeremy Hunt to provide tax breaks to the sector in the Autumn Statement. It is noted that end of a 75% discount on business rates for the retail, hospitality, and leisure sectors next April could result in an £850m rates uplift for hospitality businesses.

Price falls to continue, says Zoopla
Zoopla predicts that a stock of unsold homes and high mortgage rates will mean house prices fall further in 2024. The online property portal says prices are currently 1.1% down on this time last year, with the annual decline set to hit 2%. This would mark the first decline over a calendar year since 2011. With prices forecast to fall another 2% in 2024, this would be the first time house prices in the UK have fallen in back-to-back years since the financial crisis in 2008 and 2009. Zoopla data shows that the number of homes for sale is up by 45% compared with last year and stands at the highest level in five years.

US economy

US Inflation accelerated in September but consumer spending was even stronger than expected, according to a Commerce Department report Friday. The core personal consumption expenditures price index, which the Federal Reserve uses as a key measure of inflation, increased 0.3% for the month, in line with the Dow Jones estimate and above the 0.1% level for August.


Markets have staged a small recovery as risk appetite recovered slightly after Israel’s military action in Gaza proceeded more cautiously than markets had feared.


HSBC said profit after tax came in at $6.26 billion in the three months ended September, jumping 235% compared to the $2.66 billion in the same period last year. Europe largest bank by assets also saw profit before tax for the quarter rise by $4.5 billion to $7.7 billion, mainly due to a higher interest rate environment. However, the numbers missed expectations by economists, who were forecasting a third quarter profit after tax figure of $6.42 billion and profit before tax of $8.1 billion.

Savers increasingly opt for digital banks
Savers in the UK are increasingly opening accounts with digital banks rather than traditional high street banks, according to the latest data. In the past two years, 34% of savers have switched to a new bank or savings provider, with 55% of those choosing digital banks over high street names. The main reason for the switch is better interest rates. Many high street banks have been accused of offering low rates despite the Bank of England hiking the base rate, with some easy-access accounts paying as little as 1.75%.

Public services in ‘doom loop’ of decline, experts warn
Public services are in a “doom loop” of decline, with almost all in a worse state than pre-pandemic, according to a report by the Institute for Government and the Chartered Institute of Public Finance and Accountancy. The study found that many parts of the state have deteriorated dramatically since 2010. The report examined nine areas of public services and found that only children’s social care will be performing at the same level in 2027/28 as it was pre-pandemic. The other areas – GPs, hospitals, adult social care, council services, schools, police, courts and prisons – will be worse off. The report warns that the Government “risks getting stuck in a doom loop – with the perpetual state of crisis burning out staff and preventing services from taking the best long-term decisions.” The experts said there was “no meaningful fat to trim” from the public sector in terms of spending cuts, but suggested that “higher standards” could be delivered without extra staff or funding if there were a meaningful reform of services.

Latest Insolvencies

Appointment of Liquidators – LIPOLOGY DIRECT IMPORTS LTD
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Petitions to wind up (Companies) – HUTTON MECHANICAL & ELECTRICAL SERVICES LTD
Appointment of Liquidators – BROOKSBY LIMITED
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Petitions to wind up (Companies) – OSMAN ELECTRICAL LTD

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.

Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the debt value maybe!

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


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 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 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.