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Business Information
The UK’s poor payments culture costs the UK economy £2.5 billion each year and kills 50,000 small firms. The Federation of Small Businesses (FSB) has published a comprehensive report, 'Time to Act: The economic impact of poor payment practice’, looking at the way small firms and the wider economy are affected by poor payment practice. The analysis shows that due to late payment, 37% of businesses have run into cash flow difficulties, 30% have been forced to use an overdraft and 20% say late payment has hit profits. At the extreme end, late payments and resulting cash flow difficulties have caused businesses to fail. In 2014, if payments had been made on time and as promised, 50,000 business deaths could have been avoided, growing the UK economy by £2.5 billion. To read the FSB's news release go to
OBR forecasts paint a more pessimistic picture of the UK economy. The Office for Budget Responsibility (OBR) has advised that it expects the UK economy to grow more slowly than it predicted in March, with GDP growth in 2017 revised down from 2.2% to 1.4% and cumulative growth over the whole forecast revised down by 1.4%. A weaker outlook for investment and therefore productivity growth is the main cause. However, the OBR also stresses that for this (and subsequent forecasts), there are numerous risks and uncertainties associated with the period leading up to and following the UK’s exit from the EU with little by way of precedent. To read the OBR's news release with links to the various report go to
UK High Street grows for the first time since January. The UK’s high street has finally started to grow again after a nine-month hiatus, figures released by BDO reveal. BDO’s High Street Sales Tracker recorded a year-on-year growth of 0.7% for October, ending a run of monthly sales falls that began with a -1.7% decrease in February. Sales of lifestyle goods grew by 2.3% in October and homewares saw an increase of 11.6%. Non-store sales recovered to +19.5% after a dropping to just +12.6% in September. While the overall monthly return for fashion retailers was a fall of -0.9%, it was still the best month since January. To read BDO's news release go to
UK shop vacancy rates fall below 10% despite a drop in footfall. New research from the British Retail Consortium (BRC) has found that, despite a drop in footfall, the UK national town centre vacancy rate was 9.5% in October  - down from 10.1% in July 2016. Though this fall remains well above the January low of 8.7%, it comes after two-quarters of consecutive growth. Helen Dickinson OBE, Chief Executive of the BRC, commented: “Once again, the North and Yorkshire as well as Northern Ireland are welcoming more stores in their high streets, but the vacancy rate in Scotland has spiked to 9.2% from 7.5% in July." To read BRC's news release go to
A declining trend for UK economic confidence highlights the need for businesses to have systems and processes in place. Continued declining confidence in the manufacturing sector is the driving force behind three successive quarterly falls in overall economic confidence, according to the latest Credit Managers’ Index, which is run by the Chartered Institute of Credit Management (CICM) and sponsored by Tinubu Square. Mike Feldwick, Head of Tinubu Square UK, said: “Trade Credit Risk Management is a fine balancing act, and whilst current sterling performance is bringing benefits to some, uncertainty over the way Brexit will unfold, is making life for credit managers complicated. They should take the opportunity to ensure they have the systems and processes in place to respond quickly to what will no doubt be a challenging journey ahead, reducing the risks their business is exposed to.” To read CICM's news release go to
UK retail sales growth picked up pace in the year to November. Retail sales volumes grew at the fastest pace for over a year in the 12 months to November, according to the latest CBI quarterly Distributive Trades Survey. The survey showed that sales volumes for the time of year were considered well above average and are expected to grow at a broadly similar pace in December. The increase in retail sales volumes was driven by the clothing and non-store goods sectors, as well hardware and DIY. Growth in internet sales volumes increased at a healthy pace over the same period, with expectations for growth in the year to December the strongest for two years. To read the CBI's news release go to
Deloitte European CFO Survey: Despite uncertainty, CFOs remain confident of long-term growth. Despite continued uncertainty and concerns about the economic and business environment, Europe’s CFOs remain optimistic about the potential for their businesses in the coming year, according to Deloitte’s latest European CFO Survey. 67% of Europe’s CFOs say that there is a high level of financial and economic uncertainty facing their business - down 1% since Q1’s survey. These perceptions are highest in the UK and Germany, where 88% of CFOs report high uncertainty. CFOs in Finland have the lowest levels of uncertainty, with just 36% reporting high levels of uncertainty, and Russian CFOs saw the largest decline - down from 72% in Q1 2016 to 47% in Q3. To read Deloitte's news release go to
UK cities now outperform pre-crisis peak. The majority of UK cities and Local Enterprise Partnership areas are now outperforming their pre-financial crisis peak, according to the latest 2016 Good Growth for Cities index, produced by PwC and the think-tank, Demos. The latest index shows that two-thirds of UK cities have improved their overall position, taking the index to its highest position ever and surpassing its previous pre-financial crisis peak of 2006-08. As in the 2012-14 Good Growth index, Reading and Oxford scored the most highly, widening the gap between their them and the other cities in the index. This result is largely driven by the large number of new businesses within these cities. At the other end of the scale, while Middlesbrough and Stockton and Sunderland sit at the bottom of the index, they have nevertheless still improved upon their performance in last year’s index. To read PWC's news release go to
New EU insolvency Directive ‘welcome’. R3 has advised that the European Commission’s new Directive on corporate insolvency reform is a welcome step towards improving business rescue procedures across Europe. Andrew Tate, R3 president, commented: "There is already an increasing focus on restructuring and early intervention as part of the insolvency regime in the UK, and an EU-wide framework for this type of work will make it much easier to handle cross-border cases." He continued: "Of course, the introduction of the Directive is complicated by Brexit. There is still no clear timetable for when the UK will leave the EU, so while we expect the government to start work to ensure the UK is compliant with the Directive, we don’t know how long the Directive will apply for." To read R3's news release with a link to the Directive details go to
UK businesses at risk of getting stuck in 'productivity slow lane'. British businesses are failing to take crucial steps to boost their productivity through investment and innovation - because they believe that low productivity is only an issue for the wider economy - according to a new report from Lloyds Banking Group and the Manufacturing Technologies Association. Andrew Bester, Group Director and Chief Executive, Commercial Banking, Lloyds Banking Group said: “Productivity is one of the defining economic issues of our time. The UK’s low level of productivity compared to its G7 peers remains an unsolved puzzle, and it is crucial that we seek to understand how businesses view the problem in order that we can try to fix it.” To read Lloyds Banking Group's news release with a link to the full report go to
GDP up by 0.3% in the euro area and by 0.4% in the EU28. Seasonally adjusted GDP rose by 0.3% in the euro area (EA19) and by 0.4% in the EU28 during the third quarter of 2016, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the second quarter of 2016, GDP had also grown by 0.3% in the euro area and by 0.4% in the EU28. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.6% in the euro area and by 1.8% in the EU28 in the third quarter of 2016, after +1.6% and +1.8% also in the previous. To read Eurostat's news release go to
Modest growth in Europe and Central Asia amidst growing polarization. The latest World Bank ECA Economic Update has advised that there will be a modest increase in GDP growth in 2016 for countries in the Europe and Central Asia (ECA) region. According to the report the region is expected to grow a modest 1.6% in 2016 – up slightly from 1.4% in 2015 – but declines in both incomes and consumption will likely mitigate this modest growth. This trend is projected to continue into 2017 and 2018, with growth forecast at 1.5% and 1.8% respectively. “The Brexit vote and the refugee crisis are testing European cooperation, while the eastern half of the region is still grappling to adjust to lower oil prices,” commented Hans Timmer, World Bank Chief Economist for ECA. “Failure in the whole region to unleash new sources of growth is contributing to an increase in populism and polarization, as well as mistrust in institutions.” To read the World Bank's news release go to
UK SMEs are in 'survival mode'. According to research by Hitachi Capital Invoice Finance, 27% of SME business owners do not plan to invest at all over the next 12 months and are in ‘survival mode’. More than half of SME owners were also concerned that the UK’s decision to leave the EU could impede their access to finance, with 59% predicting that it would be more difficult to obtain finance in future. For many businesses, the preservation of working capital is still a major concern; 34% cite late payment as a problem and 31% report being paid late by their clients on a regular basis. SMEs reliance on a single client was also highlighted in the report, with almost a fifth (17%) of SME owners reporting that a single, large client is responsible for more than half of the company’s turnover. SME owners said that, on average, their biggest client is responsible for 26% of the company’s revenue.
Vast majority of British businesses brush off Brexit vote. Three-in-four UK businesses (74%) say they have yet to feel any financial impact – positive or negative – from the 23rd of June vote to leave the EU, according to new research by R3. However, 16% of all businesses, equivalent to 283,000 businesses, say the vote has already had a negative financial impact on them, compared to just 5% of businesses (85,000) who say the outcome of the referendum has had a positive financial impact. Andrew Tate, president of R3, says: "Brexit will be causing genuine problems for a significant minority of companies, and it will be benefitting others. The main reason for this is the sharp fall in the value of the pound, importers will have been hurt, while exporters may have seen an increase in demand for their products. Uncertainty over the future of the UK-EU relationship may put some important deals on hold, at least temporarily." To read R3's news release go to
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