We’re not out of the woods yet – business news 28 May 2021.

James Salmon, Operations Director.

We’re not out of the woods yet, insurers ordered to stop penalising loyal customers, London SMEs lost most during pandemic, Small businesses’ bank account delays are over, SME’s urged to aim for net zero by 2050 and lots more.

We’re not out of the woods yet

Bank of England rate-setter Gertjan Vlieghe has warned that it is still possible that more stimulus will be needed if the recovery falters due to fears over Covid variants.

He said: “Despite an improved economic outlook and a likely temporary rise in inflation in the near term, a major challenge for the economy remains to integrate the large numbers of currently furloughed workers smoothly back into the labour market. Only once the furlough scheme has ended will we have a better idea of how much persistent slack there is in the labour market.”

Vlieghe added that an interest rate cut below the current record low of 0.1%, to -0.25%, for as long as three years, was possible under his worst-case scenario for the economy. The Bank would raise rates from 0.1% to 1.25% by the middle of 2024 in his optimistic scenario.

Vlieghe also dismissed inflation fears, arguing that we are not witnessing a broad-based increase in prices.

Insurers ordered to not penalise loyal customers

People renewing their home or motor insurance will pay no more than they would as a new customer from January. The new rules have been confirmed by the City regulator, the Financial Conduct Authority (FCA), following years of complaints.  The FCA says the move will save loyal customers an estimated £4.2bn over 10 years. “Consumers can still benefit from shopping around or negotiating with their current provider, but won’t be charged more at renewal just for being an existing customer.”

London SMEs lost most during pandemic

On average, UK SMEs have lost just under £192,000 in revenue in the last 12 months – while just over one in 10 lost half a million pounds or more, according to freelance platform Fiverr. With an average revenue loss of £328,813, the study revealed that companies based in Greater London swallowed around £100,000 more losses than businesses elsewhere in the UK. Firms in the Architecture, Engineering and Building industry suffered the most during the pandemic, according to the data, followed by manufacturing, utilities and finance.

Small businesses’ bank account delays are over

High Street banks say they are back to opening accounts for small businesses as normal after pressures amid the pandemic caused problems. In the Autumn business customers faced long delays in trying to open new accounts.  Some banks stopped processing new applications from small firms during the height of the Covid crisis as they concentrated their stretched resources on existing customers. This coincided with an increase in demand for business current accounts as entrepreneurs tried to access bounce back loans.

Small firms urged to aim for net zero by 2050

MP and chairman of the Campaign for Economic Growth, Andrew Griffiths, has launched a campaign encouraging the UK’s small businesses to cut their emissions to net zero by 2050 or sooner. The campaign, called Together for our Planet Business Climate Leaders, aims to help small firms achieve the target while helping them grow, adapt and thrive writes Mr Griffiths in the Telegraph.


Airbus raised its jet production targets, saying that the sector’s recovery from covid had now begun. The European aerospace giant said that a recovery in single-aisle planes would lead the commercial market back to pre-pandemic levels between 2023 and 2025.

Etsy raises fees to counter digital tax

Online marketplace Etsy has said it will charge UK sellers a regulatory fee of 0.25% on every transaction from July 1 to help cover the cost of the Government’s digital services levy. This is equivalent to 6p on a £25 order. The digital services tax, introduced last April, requires multinational tech companies to pay a 2% levy on revenues made online from UK users. Amazon and Google have also passed the cost on businesses.

Global tax deal close, but must include Big Tech, says UK

More than 70 business leaders are calling on the UK Government to back Joe Biden’s proposals for a global minimum corporation tax. The group believes the new rule would remove the incentive to shift revenues into tax havens and raise up to £13.5bn for the UK. “Businesses should succeed not because they cut corners or avoid paying their fair share of tax, but because they build fantastic teams and products,” they wrote in a letter to ministers. Finance ministers from the G7 are set to discuss the proposals today with France, Germany and Italy already voicing their support. Insiders told Sky News an agreement could be made as soon as next week, but it would depend on the US committing to other global tax reforms, including an overhaul of how the taxes are calculated and apportioned between countries. A Treasury spokesman said the UK was pushing for a deal but it was dependent on the US agreeing to a change in the way large digital companies are taxed. Separately, a plan that would force public companies to disclose their impact on carbon emissions is also expected to be announced at the G7, though a Treasury source said a decision could go either way.

Fear prevents junior auditors from raising red flags

A report by the Institute for Public Policy Research (IPPR) has said fear is preventing junior auditors from speaking up to challenge their superiors and raising potential red flags. Long working hours during the busy audit season and a high pressure environment also discourages junior auditors from speaking up, the report added. The IPPR report recommended that junior staff are trained to speak up about areas of concern with bosses.

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