New car market rebounds – business news 6 May 2021.

James Salmon, Operations Director.

New car market rebounds, Bank of England set to raise economic growth forecasts, 50 biggest firms do not see a return to the office full-time, SMEs should be obligated to make climate disclosures and more business news.

New car market rebounds

The motoring industry showed shoots of recovery in April with a total of 141,583 new cars registered during the month, according to the Society of Motor Manufacturers and Traders. Mike Hawes, SMMT chief executive, said the figures show ‘there is light at the end of the tunnel [following] one of the darkest years in automotive history’. Sales of battery-powered cars were down slightly, with the relative decline blamed on changes to the plug-in car grant, which was cut by £500 in mid-March and abolished altogether for more expensive models. However, the Department for Transport said the trend for sales of “ultra-low emission” cars was up and Deloitte’s head of electric vehicles, Jamie Hamilton, predicts EVs will be second only to petrol by the end of the year. Elsewhere, Richard Peberdy, automotive lead at KPMG, said demand could outstrip supply as global production remains constrained by computer chip supply issues.

Bank of England set to raise economic growth forecasts

The Bank of England is today expected to revise up its GDP growth forecast for the UK economy in 2021 as Britain’s recovery accelerates. However, Howard Archer, chief economic adviser to the EY Item Club, said the BoE may partially offset this by lowering expected growth in 2022. He adds that the Bank is also likely to revise down its unemployment projections as the hiring outlook has improved.

50 biggest firms do not see a return to the office full-time

The BBC report that almost all of fifty biggest employers they questioned said they do not plan to bring staff back to the office full-time.

43 of those questioned said they would embrace hybrid working – a mix of home and office working – with staff encouraged to work from home two to three days a week.

4 said they were keeping the idea of hybrid working, working from home some of the time, under review.

Currently, people who can work from home are still advised to do so under current government guidance. However, in June the government hopes to end all social distancing restrictions and this remove that guidance.

Mark Read, CEO of  WPP said “We’re never going to go back to working the way we used to work, but the new ways of using the office require careful planning. People are working from home three to four days a week so we probably need 20% less space, but we’re not going to do that if everyone’s working from home on Mondays and Fridays.”

SMEs should be obligated to make climate disclosures

The Chartered Institute of Internal Auditors is calling on the Government to include SMEs in mandatory climate reporting rules. The Department for Business, Energy and Industrial Strategy (BEIS) launched a consultation in March on requiring listed companies and large private companies to disclose how climate change will affect their business. But the Chartered IIA said the smaller companies should also abide by the rules. “Small to medium-sized organisations also make significant contributions to climate change and so should contribute to the road to net zero,” the Chartered IIA wrote in its consultation submission.

OECD says high chance of deal on cross-border tax reform

The OECD’s head of tax said on Wednesday that a global deal on how multinational companies are taxed could be outlined by July and finalised by October. Pascal Saint-Amans told the French Senate’s finance committee: “The chances of success have in my opinion never been higher because there is a real desire on all sides to wrap up this matter.” Meanwhile, a poll conducted by the Co-operative Party showed 65% of the British public back Joe Biden’s plan to set up a worldwide 21% minimum level of corporation tax. The proposals would also see companies required to pay taxes to national governments based on sales generated in each country, something 82% of Brits support.

Doomsters were wrong about Brexit

City Minister John Glen has said predictions of a mass exodus of jobs from the City following Brexit have been proven wrong adding that London would remain one of the world’s foremost financial centres outside the EU. His comments come after EY’s Brexit tracker estimated roughly 7,500 jobs and £1.2trn in assets have left the City since the UK voted to quit the EU in 2016 – a long way from the 230,000 jobs former LSE chief Xavier Rolet said could be lost. Mr Glen said on Wednesday: “When I came into this position in January 2018 there was significant commentary from journalists and academics about the jobs that would be lost as a consequence of Brexit. Though there has been a modest adjustment with contingency arrangements being made, we certainly haven’t seen the depletion in jobs of people in working in the City of London over these last three and a half years.”

Law firms closing due to lack of indemnity cover

According to analysis by Hazlewoods, law firms are increasingly closing because they are unable to obtain professional indemnity insurance cover. Hazlewoods found that back in 2017 four legal practices shut down because of a lack of insurance cover. In contrast, 60 closed down last year. The researchers said that rising premium costs and the coronavirus pandemic had made matters worse

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