Extend Brexit support fund – business news 28 July 2021
James Salmon, Operations Director.
Call to extend Brexit support fund, IMF forecasts 6% global growth – & 7% in the UK, Retail sales strong in July, Labour vows to make flexible working the ‘new normal’ and more.
Call to extend Brexit support fund
The Federation of Small Businesses (FSB) has called on the Government to extend a £20m fund to support companies struggling with post-Brexit EU trading. The SME Brexit Support Fund was launched in February and encouraged firms that traded with the EU to claim up to £2,000 each to help pay for training and professional advice so “they can continue trading effectively with the EU”. HMRC said that the fund, which was administered by PwC and closed to new applicants on June 30, had provided £6.8m in grants to 4,376 businesses. Around 15,000 firms had registered an interest in the scheme, with 5,414 applying for £8.5m in funding. In a recent report the FSB said that “there is still high demand from small firms for advice and support as they adapt to changes to the UK-EU trade relationship.” Liam Smyth, director of trade facilitation at the British Chambers of Commerce, added that businesses had to “jump” through too many “hoops” to claim the support.
IMF forecasts 6% global growth – & 7% in the UK
The International Monetary Fund (IMF) has upgraded its economic outlook for the world´s wealthy countries as vaccinations help them rebound from the pandemic – but has downgraded its forecast for poorer nations. Overall, the IMF expects the global economy to expand 6% this year – marking a sharp bounce-back from the 3.2% contraction recorded in 2020. However, while advanced economies are expected to see growth of 5.6% in 2021 – up from a forecast of 5.1% in April – emerging market and developing countries are now expected to post growth of 6.3%, down from April’s forecast of 6.7%. In the update to its World Economic Outlook, the IMF expressed concern that any major resurgence of inflation could drive central banks to raise interest rates, warning that this could threaten the global recovery.
The report added that the IMF expects inflation to return to pre-pandemic levels in most countries in 2022.
Among the forecast revisions for this year, the largest upgrade is for the UK to 7%. Britain is also predicted to have the joint fastest growth of the G7, together with the US. The UK Economy is set to recover much faster than expected from the Covid-19 crisis as a resurgence in consumer spending and the success of the vaccine roll-out boosted forecasts. According to the International Monetary Fund’s latest World Economic Outlook report, the UK economy will expand seven per cent this year, a sharp increase from the 5.3 per cent predicted in the Fund’s previous report in April.
Retail sales strong in July
Analysis by the Confederation of British Industry (CBI) shows that UK retailers saw strong sales growth in July, although the rate was down slightly on June, which had seen the fastest rise since 2018. The CBI data shows that retail sales volumes rose 23% in July, having jumped 25% in the previous month. The CBI survey of 124 firms shows that for July, companies reported the fastest growth in orders for more than a decade, amid 49% year-on-year growth. Ben Smith principal economist at the CBI, said the July figures show that “consumer demand continues to support the UK’s economic recovery”.
Labour vows to make flexible working the ‘new normal’
Labour would legislate to make flexible working the default, with Shadow Future of Work Secretary Angela Rayner saying the party would deliver a scenario where “work fits around people’s lives instead of dictating their lives”. While employees already have the right to request flexible hours, Labour says it would widen the definition of flexible working. Ms Rayner said that if the party wins power, it will also give employers a legal responsibility to accommodate flexible working unless they can show it is not workable. She said: “Labour will make flexible working a force for good so that everyone is able to enjoy the benefits of flexible working”. “The new normal after this pandemic must mean a new deal for all working people based on flexibility, security and strengthened rights at work,” Ms Rayner added.
Taxpayers urged to check payments as deadline looms
Taxpayers have been reminded to check their tax payments which may be due at the end of this week, with the second instalment towards the financial year’s tax bill for those who file Self-Assessment tax returns due by the end of July. Due to the Government’s support measures in response to the pandemic, Self-Assessment payments due in July 2020 were postponed to January 2021. However, the Low Incomes Tax Reform Group (LITRG) has reminded taxpayers that this is not the case for the second payments on account for 2020/21. The LITRG said it wants to remind taxpayers to check the amount they are due to pay, if they have not already filed. Victoria Todd, the head of the LITRG, has urged those who cannot pay to contact HMRC to discuss the possibility of paying the amount due in instalments, saying: “HMRC have indicated they will continue to treat all such requests sympathetically in view of the current economic situation.”
Number from minority ethnic backgrounds in prominent roles doubles
The number of people from ethnic minority backgrounds in prominent public positions has more than doubled in the past four years, according to analysis from campaign group Operation Black Vote (OBV). The analysis shows that there were 73 black, Asian, and minority ethnic faces in the UK’s top political, public, cultural and media sectors on July 23, more than twice the 36 public figures found in 2017. The list of 1,100 powerful figures shows 6.3% were from ethnic minorities, with only 19 (1.6%) BAME women. This compares to 2017 when 3.4% were from ethnic minorities and just seven – or 0.7% – were BAME women. The analysis looked at the ethnicity of individuals across 39 categories covering politics and the civil service; policing, defence and the judiciary; FTSE companies and groups representing business; professional services including the heads of law, accountancy, advertising, consulting and publishing firms; arts bodies; media; trade unions; top universities; sporting bodies and NHS trusts.
Property prices and agent optimism increases
Savills has revised its price forecast, saying it expects property values to increase 9% over 2021 where it had previously estimated growth of 4%. The estate agent said the surge will be driven by the extension of the stamp duty holiday. It also expects prices to have increased by 21.5% in the five years to 2025. London is set to register the slowest rate of house price growth in the next half a decade, according to Savills, rising 12.4%. Meanwhile, analysis from Zoopla shows that UK house prices have reached a new record high, hitting £230,700 in June. Prices in June were 5.4% up on June 2020 and 30% above the peak seen before the 2008 financial crisis. Zoopla says prices have been pushed up by a lack of supply, with stock levels down by 25% in the first half of the year compared to 2020.
Brexit
The EU has backed down from its threat of legal action against the U.K. over breaches of the Northern Ireland protocol of the Brexit agreement, instead allowing time for the two sides try to work through the differences.
Barclays
Barclays reported a large rise in first-half profit driven by a drop in credit impairment charges as the economy recovers. Pre-tax profit for the six months through June jumped to £4.98 billion, up from £1.27 billion year-on-year. Credit impairment releases fell to £742 million, down from £3.79 billion, more than offsetting a 3% drop in income to £11.36 billion pinned on currency headwinds.
ITV
ITV posted a rise in annual profit after a recovery in advertising markets helped boost revenue. Pre-tax profit for the six months through June increased to £133 million, up from £15 million year-on-year, as revenue jumped 27% to £1.55 billion.
Big Tech
Big Tech’s latest earning season got off to an amazing start, with Alphabet (google), Apple and Microsoft all posting big quarterly results beyond analysts expectations. Apple obliterated analysts’ already high expectations, reporting a profit of $21.7bn in the three months to June, nearly doubling last year’s equivalent figure. Sales of the new iPhone were particularly strong. The firm’s share price fell slightly as it tamped down expectations of a repeat performance this quarter. Profits at Microsoft meanwhile hit $19.1bn, up 42% on last year, as demand for cloud-computing rocketed. And Alphabet, Google’s parent company, wasn’t too shabby either, nearly tripling its net income, to $18.5bn.
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