UK property taxes reach new heights
Britain now has the highest property taxes in the developed world, according to an analysis by the OECD. It found property taxes accounted for 12.7% of the total tax burden in 2014, compared to an average of 5.6% among the OECD's 35 members. Property taxes are equivalent to 13% of GDP in the UK, against 3.9% of GDP in France, 2.8% in the US and 1.9% across the OECD. Furthermore, the international average has fallen since 1965, from around 8%, while the UK Government has increasingly relied on property taxes for its income. In 2014, UK taxes on residential and commercial property, including stamp duty, IHT and business rates, jumped to £74.2bn, up from £69.8bn a year earlier.
Reported in:The Daily Telegraph, The Times
Tories warn tax plans could push companies out of Scotland
The Scottish Conservatives have warned that companies could be pushed out of Scotland if they are forced to pay higher wages. The Tories are set to lead a Holyrood debate on tax, and are unhappy with SNP plans not to implement a UK government tax cut for high earners. The party says this will force firms to top up salaries to keep highly skilled staff, warning that some may move elsewhere in order to avoid this. However, the Scottish government said its tax plans were "fair and progressive". Finance Secretary Derek Mackay, who will set out his first draft budget on today, said tax powers had been devolved to Holyrood to "allow Scotland to make its own decisions".
Reported in: BBC News, Financial Times
Chancellor supports interim Brexit deal
Appearing before the Treasury select committee, Chancellor Philip Hammond has appeared to back a transitional deal for Brexit by saying there is an “emerging view” that it would make sense to allow longer than two years for the UK's EU departure. He said the move would minimise disruption, particularly in terms of financial stability. Mr Hammond also stressed that changes will need to be made by both business and government, including physical infrastructure such as that surrounding customs arrangements between the UK and EU. Consideration must also be made for how long it will take to hire and train people to deal with changes that occur as a result of Brexit, the minister added.
Reported in: The Daily Telegraph
BCC warns of economic slowdown
The British Chambers of Commerce has upgraded its outlook for GDP growth this year to 2.1% from 1.8%, whilst warning of a slowdown next year. The business body expects UK GDP to grow 1.1% in 2017, and 1.4% in 2018, as uncertainty over the UK's EU relationship and higher inflation will “dampen medium term growth.”
Reported in: The Times
SMEs struggle with lack of bank funding
A report has found the growth of the UK’s SMEs is being hampered by a lack of specialist advice and support from high street banks. According to Banking on Growth: Closing the SME funding gap, 37% of firms had been turned down for finance within their first two years and 25% had been refused when they looked to scale from a small to a medium business. The report also found just 25% of micro-SMEs, companies with 1-9 employees, have used bank loans to grow – a figure that rises to 51% for SMEs with more than 100 employees. More often, business owners rely on personal savings, credit cards or loans from friends and family, with more than 25% opting for overdrafts to fund growth.
Reported in: The Times
High street bank closures
Research by Which? has found that more than 1,000 high street bank branches have closed over the past two years as more customers go online and banking services are offered at Post Offices. Across the UK, some 1,046 bank branches were shut or were set to close between January 2015 and the end of this month. Which? said HSBC had cut the most branches, at 321, equating to around a quarter of its network. This was followed by RBS Group closing 191 branches, or 10% of its network. It said Lloyds Banking Group, which includes Lloyds, Halifax and Bank of Scotland, had shut 180 branches, or 14% of its network.
Reported in: The Times
FCA threatens tighter crowdfunding rules to protect investors
The Financial Conduct Authority has said tighter controls on crowdfunding platforms are required to protect investors from "complex and often unclear" offerings. The FCA is also worried that some firms have inadequate plans to wind down their loan books following a failure. Around one in five crowdfunded businesses fail and only 22% of investors realise a return through a sale or exit. However, the UK Crowdfunding Association (UKCFA) said it had already asked for regulation and for stronger enforcement of the existing rules but the FCA’s failure to provide this had resulted in the sector "reporting on itself".
Reported in: Financial Times, The Times
Record UK exports narrow trade deficit
ONS figures show exports of goods rose by £2.1bn to £26.8bn in October, the highest level since records began in 1997. Exports of goods to non-EU countries jumped to a record £14.4bn. The boost pushed up total exports of goods and services to a record level of £46.4bn which in turn brought a record £3.8bn narrowing of Britain's total trade deficit between September and October to £2bn, albeit helped by weaker imports. The trade deficit in the three months to September stood at £14.9bn, representing the widest quarterly deficit since the end of 2013, up from £8.2bn in the second quarter.
Reported in: The Daily Telegraph, Financial Times
Manufacturing growth falls in October
Output from manufacturers dropped by 0.9%, after a 0.6% rise in September, according to the ONS. Total industrial production dropped by 1.3% in October, after falling 0.4% in September. The biggest fall in overall production since August 2013 was "broad-based across the sector", the ONS said. The biggest downward pressure came from the pharmaceutical industry, which saw a 3.6% drop. As for total industrial production, the largest fall in output came from oil and gas, which shrank by 10.8%. "The increase can largely be attributed to continued maintenance to the Buzzard oilfield in the North Sea," the ONS said.
Reported in: The Guardian, BBC News, Financial Times
London take-up increases in November
Data from CBRE shows that take-up of central London offices reached 1m sq ft in November, an 118% increase on the figure for October. The figure means take-up is in line with the 10-year monthly average. Chris Vydra, head of City office leasing at CBRE, said: ”Renewed leasing activity in the autumn was buoyed by sentiment that the London economy is robust in the wake of the referendum, translating into more space being taken in November.”
Reported in: The Daily Telegraph
Construction slows in October
Data from the ONS shows construction slowed in October, shrinking 0.6% in the month compared with growth of 0.9% in September. This figure fell short of forecasts, with economists expecting a 0.2% increase. The number of new projects starting fell by 0.9 % compared with September - although output was up 0.7% over the year. New house building increased by 2.4% month-on-month and 12.6% year-on-year. A dip in infrastructure work drove the overall decline, with a fall in new orders for public projects such as schools and hospitals – as well as a slowdown in repair and maintenance activity.
Reported in: The Independent, Reuters
Tech will enable, not destroy
Gary Turner, MD of Xero, says in a letter to the Telegraph that the current technological revolution may not destroy millions of jobs, as predicted by Mark Carney, but, if managed properly, could help “rehabilitate Britain's lagging productivity” giving “millions of small businesses the capacity to survive, prosper and create more jobs.” Technology is already “enabling professional service industries such as accounting to avoid being ‘hollowed out’, and to become invaluable enablers of growth and prosperity,” he adds.
Reported in: The Daily Telegraph
Government urged to commit to EU workers’ rights
A think-tank has called on Theresa May to guarantee the rights of 3m Europeans in the UK at the start of the Brexit process. British Future suggested that the permanent residence system, which is underpinned by EU law, should be converted into the indefinite leave to remain status available to international migrants living in the UK.
Reported in: The Independent, BBC News, Daily Mail
Employers planning to take on more staff
A survey by Manpower Group indicates employers are planning to boost job numbers in the new year. The recruitment agency’s quarterly survey, which is based on responses from 2,104 UK employers, reported a rise of two points in its employment index to +7%, the highest level of optimism in two years. The forecast is in contrast to a report last month from the Bank of England's regional agents, which said employment was expected to be broadly flat over the next six months.
Reported in: The Guardian, The Times
Tech takeover raises fears for start-ups
E2V, which makes semiconductors used in planes and power products for cancer radiotherapy treatment, has agreed to a £620m foreign takeover by Teledyne Technologies. The Mail reports that the deal has raised concerns that British talent and ideas will leave the UK if its brightest start-ups are not protected. The Treasury has launched a review of financial barriers preventing UK start-ups from scaling up, and has also pledged to increase the amount of services it buys from small businesses, and reduce corporation tax, but former Business Secretary Vince Cable said those measures did not go far enough.
Reported in:The Daily Telegraph, Financial Times, Daily Mail
Inflation hits highest level in over two years
UK inflation climbed to its highest level in more than two years in November, to 1.2%, as the falling value of the pound continued to fuel a rise in the cost of living. The rise in the consumer prices index, from 0.9% in October, was largely driven by higher petrol and clothing prices, according to the Office for National Statistics. It means just 113 out of 659 savings accounts now pays a return higher than inflation, according to figures from Moneyfacts.
Reported in: The Times, The Times, Financial Times, The Daily Telegraph
Government must take action on 5G
The rollout of the UK's future 5G mobile network must be handled better than 4G was, according to a new report. The current 4G network ranks only 54th in the world in terms of coverage, a panel of government-appointed experts has said. The National Infrastructure Commission said there must be far fewer dead spots the next time round. The NIC predicted the need for tens of thousands of small wireless cells in towns and cities for devices to connect to the 5G network. The idea is that these would have less range than the current mobile phone masts, but there would be more of them and they would be better positioned to ensure blanket coverage.
Reported in: The Daily Telegraph, The Times, The Guardian
UK slow to invest in robot technology
Fears are growing that Britain is falling short when it comes to investing in productivity-enhancing technology. The Sunday Times highlights UK manufacturers’ use of robots as a case in point. British industry is expected to take delivery of 1,800 industrial robots this year, according to the International Federation of Robotics, whereas Spain and Italy are taking more than twice that and in Germany, more than 20,000 new robots are bought each year.
Reported in: The Sunday Times
OIL & GAS
Oil prices surge on new output deal
Oil prices have jumped after non-Opec oil producing countries agreed to cut output. Brent crude rose to $57.89 a barrel on Monday - the highest since July 2015 - before falling back to $56.55, although that was still a gain of 4.1% on the day. On Saturday, non-Opec countries agreed to cut their output by 558,000 barrels a day in a deal designed to reduce oversupply and boost prices.
Reported in: BBC News