Skip to Content
Skip to Main Menu

Business News round up

TAX

Chancellor urged to scrap taxes

The Institute of Economic Affairs has called on the chancellor to scrap a swathe of taxes in the Autumn Statement. National Insurance, death duties and CGT were among 20 levies on households and businesses which have been mooted as ripe for abolishment in the report. Income tax should also be cut to a flat rate of just 15% for most earners, said the think-tank. Mark Littlewood, director general of the Institute, said “spending is far too high and the tax system is far too complicated.” Meanwhile, the Resolution Foundation has called on Philip Hammond to cancel any planned tax cuts for businesses and wealthy households and instead take action to shield poor families from the impact of Brexit.

Reported In: The Guardian   Financial Times  

 Rise in business rates criticised

In an open letter to Communities Secretary Sajid Javid, business leaders and London Mayor Sadiq Khan have warned that next April’s proposed business rates increases “will hit London hard” and deliver an “unnecessary economic blow.” The letter, published in the Standard, calls for “a fundamental review” of the entire business rates system. This comes following the closure of the Government’s consultation on the “transitional relief” arrangements on new rateable values which will cap the first year increase at 45%, compared to a 12.5% cap in place on previous revaluations.

Reported In: Evening Standard

OUTLOOK

London businesses lagging post-Brexit

Research by Begbies Traynor suggests the financial health of London businesses is trailing the rest of the UK post-Brexit. In most regions, the number of businesses in a “critical” condition fell in the three months after the EU referendum on June 23rd. But the number of London businesses in a critical position rose 6.6% in the same period, from 467 to 498. While the number of companies in “significant” financial distress fell 6% nationwide, the figure in the capital dropped by just 4%. Begbies Traynor said that a slow recovery among financial services firms is behind London's lacklustre performance.

Reported In: Financial Times, The Times

INVESTMENT

Third runway at Heathrow cleared for take off

The government has approved a third runway at Heathrow to expand UK airport capacity. Transport Secretary Chris Grayling said the "truly momentous" decision would support trade and create jobs. The Department for Transport said a new runway at Heathrow would bring economic benefits to passengers and the wider economy worth up to £61bn and create as many as 77,000 additional local jobs over the next 14 years.

Reported In: BBC News, Bloomberg  

Brexit will boost UK financial services, claims report

The UK’s financial sector will gain £12bn a year in revenues as it takes back control of regulation, according to a report by Leave Means Leave. The think-tank claims that Britain will not suffer extreme consequences as it creates its new model using lighter regulation, suggesting the issue of “passporting” is overstated. Meanwhile, Colm Kelleher, president of Morgan Stanley, has warned that the EU and Britain must work together to avoid the break-up of the City or they risk losing the capital market services that London provides to New York.

Reported in: The Times

FINANCE

Bailey promises a more transparent FCA

Andrew Bailey has announced a major review of the Financial Conduct Authority’s operations as part of a drive to make the FCA more transparent, accountable and predictable. Mr Bailey, the FCA’s new chief executive, said he wanted banks, customers and politicians to better understand what the regulator does, how it does it, and how the industry should behave from now on. The FCA‘s process of ordering firms to pay compensation to mistreated customers will be examined, and the definition of vulnerable customers will be reviewed.

Reported in: The Daily Telegraph, The Times  

Carney to leave BoE in June 2019

Bank of England governor Mark Carney says he will step down in June 2019. It means he will serve one year more than the five he had committed to, but will still be two short of the usual eight years governors serve. Mr Carney said the move “recognised the importance to the country of continuity” during Brexit negotiations. However, Treasury Select Committee chairman Andrew Tyrie said his decision to serve only six years “requires a good deal of examination and explanation”.

Reported in: Financial Times, The Daily Telegraph  

LENDING

 Small business lending grows at fastest pace since 2012

New figures show lending to small businesses rose at its fastest annual pace since 2012 last month. Data from the Bank of England showed that credit for SMEs showed signs of picking up in September, rising by £842m, a 2.1% increase compared with the same month last year and the fastest pace of growth since the BoE’s records began four years ago.

Reported in: The Times  

Mortgage lending picks up

Mortgage lending picked up in September, with the number of mortgage approvals reaching 62,932, up from 60,984 in August and higher than the 61,500 City analysts had been expecting. Meanwhile, credit card lending rose by £500m, taking the annual growth rate to 8.4%. Other loans and advances to households rose £900m.

Reported in: The Times

 EXPORTS

Trade minister promises to fight protectionism

Trade minister Mark Price has argued that Britain should take up the United States' mantle as the world’s champion of free trade by battling protectionism. The former Waitrose boss said he would use his new position to make the case for free trade and remind Britons of the benefits of an open economy. He told the BCC’s trade summit: “We can now place ourselves at the centre of an increasingly inter-connected world and, if we want to, become a super-connected trading hub, enhancing tie with both the east and the west.”

Reported in: The Daily Telegraph  

  DISRUPTION

Financial services fear fintech

Half of UK business leaders fear their industries will face significant digital disruption within the next two years, according to Microsoft’s ‘Digital Transformation: The Age of Innocence, Inertia or Innovation?’ research, with the threat most keenly felt in financial services. Nicola Hodson, general manager, marketing and operations at Microsoft UK, says: “New challengers, many who are digitally savvy start-ups, are disrupting established markets by deploying new technologies quickly, and luring expectant customers away from established competitors."

Reported in: Tech City News  

 EMPLOYMENT

 Gig economy workers need minimum wage, says Vaizey

Former Conservative minister Ed Vaizey has suggested that companies such as Uber should be forced to pay the minimum wage amid calls for more protection for workers in the gig economy. He said that it would help to prevent companies from exploiting loopholes in employment law by forcing greater definition for freelance workers. Meanwhile, employment lawyers have said last week’s employment tribunal decision that Uber drivers are entitled to worker status will have “huge implications” for businesses beyond the gig economy.

Reported in: The Times   CIPD

 MANUFACTURING

 Manufacturing exports rise but price pressures grow

UK manufacturing remained on a “firm footing” last month, with the weaker pound boosting exports, according to a survey from Markit. However, the fall in the pound also had a “marked” impact on costs, with the price of imported goods rising. Markit said about 90% of companies reporting rising import costs made reference to the exchange rate. The latest Markit/CIPS PMI for manufacturing stood at 54.3 last month. That was down from September's figure of 55.5, but still above the 50 mark which indicates expansion.

Reported in: Financial Times, Independent i

 CONSTRUCTION

Housebuilders optimistic

Research from Lloyds shows that housebuilders are increasingly optimistic about levels of growth and investment, with firms increasing their five-year growth forecasts from 25% last year to 28% this year. Over a third of respondents to the bank’s survey said uncertainty around Brexit was the biggest challenge their business faced, while others pointed to skills shortages, the planning system, and the rising cost of raw materials. In regard to growth forecasts since the referendum, 42% said they had improved while 27% said they had declined.

Reported in: The Daily Telegraph

REAL ESTATE

Millennial workers driving property trends

Commercial landlords are being driven to offer more flexible workspace as demands of start-up businesses and millennial workers disrupt the property industry, reports the Times. The 20-year lease is growing less common, with the average now seven years and likely to shrink further.

Reported in: The Times

START-UPS

First year sees profit for small firms

Research from Yell Business shows that 79% of small businesses achieve profitability in their first year, with 27% seeing profit within a month or two. The survey of 1,500 small business owners shows that the average entrepreneur takes nine months to set up their own business and make a profit. The study found that 40% of owners said it cost them between £1 and £1,000 to start their business, while 17% encountered no start-up costs. The average cost of launching an enterprise came in at £7,173.

Reported by: London School of Business and Finance

ECONOMY

Economy grows 0.5% in three months after Brexit vote

The economy expanded by 0.5% in the July-to-September period, according to the ONS, slower than the 0.7% rate in the previous quarter, but stronger than analysts' estimates of about 0.3%. While growth in the services sector was robust, growing 0.8% in the quarter, the construction sector contracted by 1.4% and industrial production fell 0.4%, with manufacturing output down 1%.

Reported in: The Times, Financial Times   

 TECHNOLOGY

 UK steps up investment in cyber security

Automatic defences to stop hackers hijacking websites or spoofing official domains will get a boost from a £1.9bn government cyber security strategy. Other defences that intercept booby-trapped emails or shut down thieves impersonating bank websites will also be expanded, and specialist police units that tackle organised online gangs will be enlarged. The £1.9bn to pay for the national strategy was allocated last year and will fund the programme until the end of 2020.

Reported in: The Daily Telegraph, The Times

OIL & GAS

 Oil majors join forces in climate push

Top oil companies including Saudi Aramco and Shell are joining forces to create an investment fund to develop technologies to promote renewable energy, as they seek an active role in the fight against global warming, sources said.

Reported by:Reuters

Close Menu