Business News 7th August 2017
Markets Round up
CPA hopes to inform, with its daily bite-size business news on Monday 7th August 2017, filled with stories we think will interest our members and visitors.
On reasonable volumes (for an August day) the UK Market finished at a six-week high buoyed by US non-farm payrolls which sent Sterling sharply lower.
Dollar denominated stocks along with miners had the best of it rising across the board along with 75% of the blue-chip index also rising today.
Merlin Entertainment the theme park owner shrugged off the recent UK terror attacks to post 5% plus gains on the day – elsewhere Petrofac the troubled oil services supplier posted gains of over 8% (irrespective of an ongoing SFO investigation) after winning a substantial $2b order from an Oman refinery.
Will this range bound market push on to new highs next week? or will we get a technical sell off to take us back down to 7300?
U.S. Shares opened higher today after data showed U.S. employers hired more workers than expected in July and also raised wages, signaling labor market tightness.
European and U.K. Shares inched higher as investors focused on a raft of mixed company results with insurance firm Swiss Re hit after missing profit estimates
US non-farm payrolls increased by 209,000 last month, with revisions to data for the previous two months adding 2,000 more people, according to the Department of Labor. The jobless rate fell to 4.3% even as the labour-force participation rate edged up from 62.8% to 62.9%. Economists had forecast 183,000 new jobs and a one tenth of a percentage point dip in the unemployment rate from 4.4% in June to 4.3%.
British Airways and Easyjet have warned customers to expect longer queues at immigration control points across European airports. Both airlines told their customers departing from European airports on flights to the UK to “allow extra time” for their journey through the airports due to extra checks being carried out on arriving and departing customers. A spokesman for the airline lobby group, Airlines for Europe, told the BBC: “it seems the governments – especially in France, Italy, Spain, Portugal and Belgium – underestimated the situation of many passengers going through tighter passport checks and have not provided a sufficient amount of border control officers.”
Oil Prices pared early losses to trade higher, with U.S. crude remaining below $50 per barrel, restrained by rising output from the United States as well as producer club OPEC.
Gold fell after better than expected U.S. jobs data boosted the beleaguered dollar, clearing the way for the Federal Reserve to announce next month a plan to start shrinking its balance sheet.
SMEs
Appeal system woes
The Valuation Office Agency is facing potential embarrassment over its new Check, Challenge, Appeal system for appealing business rates decisions, after its own figures reveal almost 90% of users are dissatisfied with the process. A Freedom of Information request made to the VOA by Colliers International found that of 847 respondents to a survey completed at the end of an appeal application, 72% were “very dissatisfied” and 17% were “dissatisfied”. The Daily Telegraph says that figures are the first indication that the new system, which came into force on April 1, is proving confusing and frustrating for property owners – something experts had warned of before it came into use. “The Government ignored the advice of rating experts when it introduced Check, Challenge, Appeal – which we said was-unworkable at the time – and despite our criticisms, rolled on ahead regardless,” John Webber, head of rating at Colliers International, comments. Meanwhile, the Campaign for Real Ale (Camra) has said “sky high” charges are contributing to the 21 pubs that call last orders for the final time each week in the UK. “Taxes now make up more than a third of the cost of a pub pint. Despite the fact that pubs currently account for 0.5% of turnover of the UK economy, they are still paying 2.8% of the business rates,” Colin Valentine, Camra’s chairman, vents.
The Daily Telegraph, Page: 29 Yorkshire Post, Page: 5
Importers expect costs to rise
A survey by Funding Circle has revealed that more than two thirds of small businesses that import goods and services expect their costs to rise after Brexit. It found that found that importers expected their average costs to increase by £5,300 a month, or nearly £64,000 a year. Overall, 69% expected higher import costs.
The Times, Page: 37
TAX
Thames Water to turn its back on tax haven
Thames Water could soon sever its links with the Cayman Islands as it seeks to repair its reputation. Bosses think the firm, which has paid no corporation tax for a decade, might soon be able to relocate its two subsidiaries incorporated in the tax haven. Executives stress the two Cayman subsidiaries are not there for tax reasons, but a source said: ‘They are cognisant of the fact that having a holding company and the word “Cayman” does not look good. Thames Water says it paid £177m in taxes over the last year, including through national insurance, business rates, and fuel duty.
Daily Mail, Page: 63
Finance Bill clarity
The UK Government’s forthcoming Finance Bill will give welcome clarity to business owners on the move to quarterly tax reporting, according to TaxAssist Accountants’ Ian Mearns.
The Press & Journal, Page: 35
CORPORATE
Investors fear use of clever accounting to trip bonuses
The FT explores large investors’ fears that FTSE 100 companies are using clever accounting techniques to trigger high executive bonuses and mask poor financial performance.
Regulator targets every single individual in finance
Under the FCA’s planned extension of the so-called senior manages regime almost any employee that works in financial services could face a fine if they fail to report breaches of new conduct rules.
ECONOMY
Consumer spending falls
Consumer spending fell for the third month in a row in July, according to research by Visa. Compared with the same month a year ago, spending fell by 0.8%, slightly faster than the 0.2% decline in June. Spending has now dropped for the past three months, marking the longest falling streak in over four years. Meanwhile, figures from BDO have shown that output among manufacturers is rising, with more businesses expecting healthy order books in the coming months. “Amidst slowing growth in the economy as a whole, UK manufacturing is a definite bright spot at the moment,” BDO’s Peter Hemington comments. Separately, the Institute of Economic Affairs has estimated that smoking is worth almost £15bn to the public purse because of the tax revenue and the savings from smokers’ early deaths.
Financial Times, Page: 2 The Guardian, Page: 17 The Daily Telegraph, Page: 2, 29 Daily Express, Page: 45 Daily Mail, Page: 10 The Sun, Page: 2
OTHER
Healey’s estate settles up
The Daily Mail’s Andrew Pierce notes the irony that an archive of private correspondence by the late Denis Healey, the Chancellor who raised the top rate of tax to 83%, has been sold in order to settle a £75,670 inheritance tax bill.
Daily Mail, Page: 18
I’m out…..of cash
Theo Paphitis and Peter Jones, the stars of Dragon’s Den, have lost nearly £33,000 after a dishonest accountant working at their Red Letter Days firm falsified checks and cashed them
The Sun, Page: 11
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