Inflation, Productivity, Employment, House Prices, Tax and other business news on November 14th

14th November 2019.

James Salmon, Operations Director.

The latest news on inflation, productivity, employment, house prices, tax, red tape, automation, CVAs, retail, red tape and business confidence.

Inflation falls to three-year low

The consumer price index (CPI) dropped to 1.5% in October, according to the Office for National Statistics (ONS), down from 1.7% in September to its slowest rate in almost three years.

The largest downward contribution “came from electricity, gas and other fuels as a result of changes to the energy price cap,” the ONS said. Howard Archer, chief economic advisor to the EY Item Club, described the fall in inflation as “decent news for consumer purchasing power.”

Productivity remains flat

Labour productivity failed to grow in the third quarter after a 0.5% contraction in the second quarter, according to Office for National Statistics (ONS) preliminary figures released yesterday.

The UK has registered either zero or negative annual productivity growth in each quarter since the three months to June 2018. Howard Archer, chief economic adviser at the EY Item Club, said that poor growth in productivity was partly because of low wage growth. “Many companies have preferred to take on labour rather than commit to costly investment, given a highly uncertain economic and political outlook,” he said.

Elsewhere, Mike Cherry, chairman of the FSB, called for more investment in broadband infrastructure to encourage firms to innovate.

Employment falls as pay growth slows

Figures from the Office for National Statistics (ONS) Tuesday showed that employment had fallen by 58,000 during the third quarter of 2019 – the biggest fall since May 2015.

Britons also faced slowing pay growth in the third quarter, the ONS said. Average weekly earnings grew by 3.6% in the third quarter, down from 3.8% in the three months to August.

“The latest data are somewhat mixed,” said Howard Archer, chief economic adviser at the EY Item Club. “Overall they fuel the view that the hitherto resilient UK labour market is now buckling in the face of a struggling UK economy and heightened Brexit and domestic political uncertainties.”

House prices forecast to rise by £35k in five years

UK house prices will go up by an average of £35,000 in the next five years, according to Savills.

However, data from the estate agent suggested there will be large fluctuations across the country.

The average value of a home in Britain is expected to rise 15.3%, but in some areas the increase will be as high as 24%, which is the case for the North West whilst in other parts of the country, such as in Greater London, they will rise by just 4%.

The rises are forecast as concerns over the current political and economic uncertainty begin to subside.

Top 1% now pay a third of income tax

The top 1% of earners in the UK now account for more than a third of income tax paid to the government while 42% of adults paid no income tax at all, according to research by the Institute for Fiscal Studies.

The think-tank said that above-inflation increases in the personal allowance to £12,500 a year meant 42% of adults paid no income tax.

The IFS said the increase in the proportion of tax paid by the highest earners was not driven by a rising income share at the top but rather by income tax rises for high-income individuals and increases in the personal allowance that have reduced or eliminated income tax for those with lower incomes.

A separate report from the Resolution Foundation found that at 34.4% of GDP, tax revenues have not been as consistently as high in Britain since after the Second World War.

The centre-left think-tank also said families and businesses could pay £60bn more in tax under Labour’s plans compared with those of the Conservatives.

The shadow chancellor yesterday claimed Labour would fund its spending plans by higher taxes on just the top 5%. But the IFS has questioned whether it would be possible to raise such sums from this group alone.

Labour will put up taxes to 45p for those earning more than £80,000 a year and 50p for those bringing in over £125,000, John McDonnell said.

BCC test: If it adds costs to business, throw it out

Writing in the Telegraph yesterday, Dr Adam Marshall, director general of the British Chambers of Commerce, lays out a simple manifesto pointer for the political parties ahead of the general election.

He says “they should subject all their pledges to a simple SME test. Anything that adds to the cost burden at this incredibly sensitive moment for the country and the economy should be chucked out. Otherwise, all the warm words in the world about supporting British business won’t be worth the paper they are written on.”

Finance bosses bullish on automation

A new report by BDO found that investment in automation was the priority for one in five finance directors over the next five years and that 87% had automated a key process in the past year.

A third of businesses (31%) have already introduced artificial intelligence (AI) into their operations, while a quarter of firms (24%) make use of robotics, the survey said.

The report showed that automation is moving beyond manufacturing and into professional services, with 67% of finance bosses in the sector considering or having already starting using AI.

Tony Spillett of BDO said: “Automation is already having a transformative impact on businesses up and down the country.”

Landsec rubbishes retailer CVAs

Rob Noel, chief executive of property giant Landsec, has said he will not support “manifestly unfair” retailer restructures after chains closing shops and seeking rent cuts bit into the value of his retail parks and shopping centres portfolio.

The landlord saw tenants including Debenhams and Topshop parent Arcadia exit sites using a company voluntary arrangements (CVAs) in the six months to September 30 and Noel claimed some tenants have previously only given him 24 hours’ notice before asking him to back a CVA.

Scottish retail sales up

The latest retail sales monitor from the Scottish Retail Consortium and KPMG reveals that total Scottish sales were up by 1% last month, compared with October 2018, when they had decreased by 0.2%.

CFOs pessimistic over future

A new report from Deloitte reveals that 36% of CFOs in Europe feel more pessimistic today than last quarter and just 18% think it is a good time to take on risk.

“Trade disputes, elevated uncertainty and a global slowdown have knocked the confidence of European CFOs,” said Ian Stewart, UK chief economist at Deloitte.

He added: “While European equities have soared, risk appetite in the real economy among CFOs has dropped to a four-year low. Faced with an uncertain outlook, CFOs are shelving investment plans and doubling down on cutting costs.”

Richard Houston, senior partner and chief executive of Deloitte North and South Europe, also notes only a “handful of companies are integrating climate change risk into business planning in a significant way.”

He adds: “Efforts are certainly increasing, but more needs to be done across industries on an international scale – this should also help businesses connect with a new generati on of consumers, employees and investors alike.”

For ethical businesses, accountants are part of the solution – Brand

In a piece for City AM, Helen Brand, CEO of the ACCA, says the next government should focus on solving problems within four key areas: Brexit, climate, skills and the business environment.

On climate and the creation of ethical businesses, Ms Brand says: “For companies to create long-term, inclusive, environmentally sustainable value, they must partner with finance and accounting professionals.

Achieving the objectives of the UN Sustainable Development Goals will require measurement to deliver management and concrete results.

This is core to what professional accountants are trained to do. Reporting on climate risk, assessing natural capital dependencies, building circular business models, more effective evaluating of social impacts, and implementing purpose-led strategies are five approaches identified by ACCA in a research report called Social and Environmental Value Creation.”

Do you sell on credit?

In the current economic climate it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option  to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and  has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has  helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

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


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

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

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners  who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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

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See all our latest news here!

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See our blog on how to communicate with your debtor early and clearly to set the framework for prompt payments

Everything You Always Wanted To Know About Debt Recovery (But Were Afraid To Ask)

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Read our blog on what to do when not paid on time

10 Bad Habits Every Credit Controller Should Give Up

The Credit Controller’s Best Friend

Debt Recovery: It’s Easier Than You Think!

How Managing Your Cash Flow Can Make You (and Your Business) A Success

Avoid insolvency – Don’t let your money go up in smoke

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

How to overcome 25 of the most common excuses for non-payment

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

20 ways to avoid identity theft

see our blog – 15 steps to avoid invoice fraud

Overcoming 5 common reasons for disputed invoices

As insolvencies rise, could you spot these warning signs in your customers?

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