15thFeb
News article

UK fell into recession at the end of 2023

The UK economy fell into recession during the final three months of last year, according to the Office for National Statistics (ONS).

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The UK economy fell into recession during the final three months of last year, according to the Office for National Statistics (ONS).

GDP dropped by 0.3% during the fourth quarter of 2023, which was a sharper fall than expected. That follows a 0.1% fall between July and September.

The UK is considered to be in recession if GDP falls for two successive three-month periods - or quarters.

The figure for the final three months of last year was worse than a 0.1% fall widely forecast by financial markets and economists.

According to the ONS, there a slowdown in all the main sectors it measures to determine the health of the economy, including construction and manufacturing.

Alex Veitch, Director of Policy and Insight at the British Chambers of Commerce, said: 'Businesses were already under no illusion about the difficulties they face, and this news will no doubt ring alarm bells for Government. 

'The BCC's last Quarterly Economic Forecast suggests annual growth below 1.0% for the next two years as firms remained gripped by uncertainty and the twin perils of high inflation and interest rates remain.?? 

'The Chancellor must use his Budget in just under three weeks' time to set out a clear pathway for firms and the economy to grow. 

'Businesses are crying out for a long-term economic plan that reduces the cost pressures they are facing and unlocks the investment they so sorely need.' 

14thFeb
News article

Inflation unchanged but remains top concern for business

UK inflation remained unchanged in January at 4% as food prices fell, according to the latest data from the Office for National Statistics (ONS).

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UK inflation remained unchanged in January at 4% as food prices fell, according to the latest data from the Office for National Statistics (ONS).

However, the British Chambers of Commerce (BCC) warned that inflation remains the top concern for many businesses.

Food and non-alcoholic drink prices fell at a monthly rate of 0.4% in January, the first monthly decline since May 2021, the ONS said.

Core inflation – which excludes energy, food, alcohol and tobacco, and is closely watched by the Bank of England – remained unchanged at 5.1%, according to the latest figures from the ONS.

Services inflation rose to 6.5% in January, up from 6.4% a month earlier.

Alex Veitch, Director of Policy at the BCC, said: 'Businesses need price stability, so today's news that inflation remained unchanged in January is welcome.

'However, firms consistently tell us inflation is their top concern.

'The Bank of England has already warned that inflation is likely to remain volatile over the coming months because of global uncertainty. The Red Sea crisis is causing supply chain disruption and price rises for businesses.

'Next month's budget is an opportunity for the government to reassure and support businesses. Companies across the UK will be looking for a clear plan from the Chancellor that prioritises investment and skills.'

13thFeb
News article

British families facing a 'triple savings challenge', Foundation warns

A report published by the Resolution Foundation has warned that UK families are facing a 'triple savings challenge' of insufficient 'rainy day' savings of at least £1,000.

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A report published by the Resolution Foundation has warned that UK families are facing a 'triple savings challenge' of insufficient 'rainy day' savings of at least £1,000.

The Foundation also warned that families face an 'inability to cope financially with bigger life events' and inadequate retirement incomes.

It said that these issues can be addressed by 'building on the success of auto-enrolment into pension saving'. The Resolution Foundation has called for auto-enrolment contributions to be gradually increased from 8% to 12%.

Molly Broome, Economist at the Resolution Foundation, commented: 'Families across Britain face a triple savings challenge – not saving enough for rainy days, bigger life events, or for a decent income in retirement.

'One-in-three families in the country have less than £1,000 in savings – which left many people exposed during the cost-of-living crisis – while around 13 million individuals aren't saving enough for an adequate income in retirement.

'We can address all three challenges by building on the success of pensions auto-enrolment to opt more people into both easy access and long-term saving.' 

12thFeb
News article

NAO publishes findings on HMRC's monitoring of effectiveness of tax reliefs

The National Audit Office (NAO) has published recommendations on how HMRC monitors the effectiveness of tax reliefs.

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The National Audit Office (NAO) has published recommendations on how HMRC monitors the effectiveness of tax reliefs.

In a recent report, the NAO stated that HM Treasury and HMRC 'still do not monitor or evaluate reliefs closely enough to understand if they cost too much or achieve their intended economic impacts'.

The NAO said that, as at December 2023, there were 341 'non-structural' tax reliefs that were designed to achieve social or economic objectives. In the 2022/23 tax year, the total cost of 104 non-structural tax reliefs was around £204 billion.

It said that the largest non-structural reliefs, which include tax reliefs for pensions, capital gains tax (CGT) tax relief on main homes and zero-rated VAT on food, do not specifically target economic growth.

According to the NAO, it has taken 'a number of years' for the government to amend reliefs where analyses found that they were of limited effectiveness.

Commenting on the findings, Gareth Davies, Head of the NAO, said: 'Tax reliefs are an important policy tool for government, but their number and cost makes administration a significant task.

'The government should carry out sufficient evaluation and compliance work to understand whether claims are legitimate and reliefs are working, and act promptly to get reliefs back on track if problems are identified.'

9thFeb
News article

'More ambitious approach' needed towards preserving access to cash

The Federation of Small Businesses (FSB) has stated that a 'more ambitious approach' is needed in regard to making sure access to cash is preserved.

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The Federation of Small Businesses (FSB) has stated that a 'more ambitious approach' is needed in regard to making sure access to cash is preserved.

The FSB's statement comes following a Financial Conduct Authority (FCA) consultation on the matter, which outlined proposals to protect and widen access to cash.

However, the FSB believes that the proposals 'could go further'. Its own recommendations include:

  • developing a more comprehensive cash assessment process that is more responsive to a wider range of local needs
  • publishing assessment outcomes and making processes transparent
  • responding to a wider range of trigger events to undertake a cash assessment in a local area.

Martin McTague, National Chair of the FSB, said: 'A small business must be free to choose which payment options it wishes to accept, including cash. To enable this, it's vital for the infrastructure required for cash to remain available in all areas.

'Cash access is too important to be left to innumerable individual commercial decisions which, taken together, represent a significant threat to people and businesses' ability to withdraw, process and deposit cash.'

8thFeb
News article

Pensions income needed to retire rises

The amount needed for a single person to have a moderate retirement has risen to £31,300, according to the Pensions and Lifetime Savings Association (PLSA).

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The amount needed for a single person to have a moderate retirement has risen to £31,300, according to the Pensions and Lifetime Savings Association (PLSA).

The rising cost of living and an expectation to offer financial support to grandchildren had pushed up the income required by £8,000, the PLSA said.

The PLSA uses evidence from focus groups to make the estimates, and they are intended as a guide for those planning their retirement savings.

The calculations are pitched at three different levels - minimum, moderate and comfortable - and are developed and maintained independently by the Centre for Research in Social Policy at Loughborough University.

They estimated that a single person needed £14,400 a year for a minimum income, and £43,100 a year for a comfortable retirement.

Couples required a joint £22,400 at the minimum level, £43,100 at a moderate level and £59,000 at a comfortable level.

Nigel Peaple, Director for Policy and Advocacy at the PLSA, said: 'The cost of living has put enormous pressure on household finances over the last year and, as the research shows, this is no different for retirees.'

7thFeb
News article

CBI calls for Chancellor to use Budget to 'build momentum' in the economy

In its Spring Budget submission, the Confederation of British Industry (CBI) has called on Chancellor Jeremy Hunt to 'continue building momentum' in the UK economy and 'put the country on the path to sustainable growth'.

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In its Spring Budget submission, the Confederation of British Industry (CBI) has called on Chancellor Jeremy Hunt to 'continue building momentum' in the UK economy and 'put the country on the path to sustainable growth'.

The CBI stated that the Spring Budget is 'a crucial opportunity to firm up the foundations of growth to deliver a prosperous future for the country'.

According to the business group, the Chancellor should extend Full Expensing to cover leased and rented assets; deliver the planned expansion of eligibility to 30 hours of funded childcare; cap the increase in the business rate multiplier for England for another year; and increase the total that can be raised from Enterprise Investment Scheme (EIS) investments for knowledge intensive companies from £20 million to £30 million.

Rain Newton-Smith, Chief Executive at the CBI, commented: 'The Chancellor needs to perform a tricky 'high wire balancing act' of giving momentum to the economy without sacrificing hard-earned credibility. With the Autumn Statement signposting us to the right path towards stability and growth, political leaders need to stay the course and not give in to short-term political headwinds.

'Businesses are impatient for the economy to pick up steam. UK PLC needs a budget that prioritises economic momentum over election giveaways, giving firms the confidence to invest and avoiding the economy remaining on standstill until election day.'

6thFeb
News article

Small businesses 'finding it harder to access finance'

Research carried out by the Federation of Small Businesses (FSB) has found that small firms are struggling to access finance, with the success rate of finance applications falling by 10% in three months.

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Research carried out by the Federation of Small Businesses (FSB) has found that small firms are struggling to access finance, with the success rate of finance applications falling by 10% in three months.

Just 53% of credit applications were successful in the last three months of 2023, according to the business group. This was a significant fall when compared to the 62% success rate recorded in the previous three months.

The FSB revealed that of those who were successful, 33% were offered an interest rate in excess of 11%.

55% of firms sought finance for cashflow issues, whilst 19% applied for finance to expand their business and 15% wanted to upgrade equipment.

Commenting on the data, Caroline Lavelle, Chief Commercial Officer at the FSB, said: 'For 50 years FSB has been supporting its members to run and grow their businesses, including by providing tailored products and services to address the biggest needs of the day.

'It's clear that access to affordable finance has become harder recently.'

5thFeb
News article

Record 11.5 million taxpayers file tax returns by 31 January deadline

Data published by HMRC has revealed that a record 11.5 million taxpayers filed their 2022/23 self assessment tax returns by midnight on 31 January.

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Data published by HMRC has revealed that a record 11.5 million taxpayers filed their 2022/23 self assessment tax returns by midnight on 31 January.

HMRC stated that 12.1 million individuals were expected to file their tax returns and pay any tax owed.

The peak hour for filing on 31 January was between 16:00 and 16:59 when 61,549 taxpayers submitted their returns. 32,958 filed between 23:00 and 23:59.

HMRC has urged anyone who missed the deadline to submit their tax return as soon as possible – late filing and late payment penalties apply for those who failed to submit by the deadline. It stated that there are many ways to pay, including online, using the HMRC app, by bank transfer or via a Time to Pay payment plan.

Commenting on the figures, Myrtle Lloyd, Director General for Customer Services at HMRC, said: 'Thank you to the millions of self assessment customers and agents who met the deadline. Anyone who has yet to file and is concerned that they cannot pay in full may be able to spread the cost of what they owe with a payment plan. Search 'pay your self assessment' on GOV.UK to find out more.'

2ndFeb
News article

Interest rates stay at 5.25%

UK interest rates have been left unchanged at 5.25% by the Bank of England.

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UK interest rates have been left unchanged at 5.25% by the Bank of England.

It is the fourth time in a row the Bank has held rates after previously raising them 14 times in succession as it attempted to bring inflation down.

The Bank also published its inflation report, which predicts that inflation will fall back to its target of 2% between April and June this year, before rising again.

Anna Leach, Deputy Chief Economist at the Confederation of British Industry (CBI), said the decision would come as a relief to businesses and households.

She said: 'While inflation is following a downward trend towards the 2% target, it's not clear whether rates will follow suit. Relatively high wage inflation alongside an uptick in services inflation in December means that a rate cut before the summer is increasingly unlikely to materialise.

'However, that won't stop pressure piling onto the Bank of England to reduce rates as weakness in the economy persists. A rebound in growth in November following the previous month's decline is encouraging but masks the overall picture of a flatlining economy, still at risk of technical recession.

'The stakes are high for business bearing the brunt of higher borrowing costs and soft demand. They desperately need certainty on monetary policy alongside a package of measures from government to kickstart productivity and growth.'