Business Information
New rights for UK policyholders to claim late payment damages. Marsh has published a paper which examines the impact of The Enterprise Act 2016 which came into force in the UK on 4 May 2017. The new Act enables policyholders to claim damages in the event of late payment of claims and applies to any (re)insurance policy placed or renewed on or after that date. The Act allows a 'reasonable time' for insurers to investigate and assess the claim - although the definition of a 'reasonable time' period is unspecified and will depend on the relevant circumstances. The paper also considers whether the new act will result in a flood of successful litigation against insurers. To see Marsh's paper go to
The UK is still a nation of small shopkeepers. New data released by the Local Data Company (LDC) and the British Independent Retailers Association (bira) shows that traditional independent shops opened more shops than were closed in 2016 in Britain’s top 500 town centres, while the national chains continued to see a fall. Independent shops saw an increase of +159 shops (+0.15%) in 2016 - a +36% increase from 2015 when +117 shops were added across the UK. In 2016, a total of 29,083 independents either opened (14,621) or closed (14,462), compared to 2015 when 29,936 shops opened (15,026) or closed (14,910). Key growth sectors have been barbers, hair & beauty salons, tobacconists/e-cigarette shops, restaurant & bars, and mobile phones shops. Sectors in decline include newsagents, women’s clothing, Indian restaurants and nightclubs. To read a summary of bira's latest report go to
Are UK small businesses experiencing a 'Brexit payment crunch'? Startups has published an article which reports that, according to a report by Crossflow Payments and YouGov, small businesses are being prevented from accessing £266 billion because suppliers aren’t paying them on time. The survey of 1,031 small business decision makers revealed that 15% of all small firm turnover was subject to late payment in 2016 – with 23% of respondents declaring they don’t normally have their invoices settled on time. Furthermore, it’s suggested that businesses are experiencing a “Brexit payment crunch”, with 10% of those surveyed saying that they have experienced worsened payment terms since the EU referendum last June. To read Startups article go to
Brittelstand beats Mittelstand in race for growth. According to new research published by BDO, the annual turnover growth of UK mid-sized businesses outperforms that of German, French, Spanish and Italian medium-sized firms. The research reveals that UK mid-sized businesses grew their turnover by nearly 4% in the last 12 months to £1.2 trillion, compared to a 1% increase in turnover to £1.4 trillion for the equivalent German firms – the country whose mid-sized businesses generate the most revenue. Meanwhile, Spain’s mid-sized businesses' turnover by 0.63% to £570 million, Italian mid-sized firms saw a contraction in revenue growth of -1% to £911 million and growth for the equivalent businesses in France stayed flat with a contraction of -0.01% to £1 trillion. British mid-sized businesses are also the most profitable across the top five EU economies generating profits of £97 billion (profit growth of 19% in one year) compared to Germany’s £67 billion (up 2%), France’s £62 billion (25%), Italy’s £35 billion (4.7%) and Spain’s £22 billion (a contraction of -10%). To read BDO's news release go to
Poor UK High Street figures built on a dismal prior year baseline. New figures released by BDO have indicated that the later Easter holiday failed to inspire UK consumers into a Spring shopping spree and retailers saw April’s like-for-like trading grow just 1.9%. But while April represented the first month of growth this year, it came off an extremely weak base. Furthermore, while non-store sales grew by +15.1% in April, this was the lowest pace of monthly growth seen since September last year.  Sophie Michael, Head of Retail and Wholesale at BDO LLP, said: “With Easter falling later, retailers would have been expecting a boost in sales in April, so these poor results will be clearly disappointing.” To read BDO's news release go to
3-year high in new orders for SME manufacturers. According to the CBI's latest quarterly SME Trends Survey, the UK’s SME manufacturers reported strong growth in domestic and export orders in the three months to April, but rising costs and prices continue to bite. The survey found that total new orders growth was at a three-year high, driven by solid rises in both domestic and export orders - with the latter growing at the fastest pace since mid-2011. Output growth was also at its highest for six years, and orders and output are expected to strengthen yet further in the coming quarter. As a result, sentiment among SMEs is upbeat and optimism about the business situation rose at its fastest pace in almost three years. However, the weak pound is continuing to stoke inflationary pressure, with SME manufacturers reporting the strongest increases in unit costs and prices in six years. Furthermore, investment plans for the year ahead deteriorated, particularly those for buildings and plant & machinery. To read the CBI's news release go to
Profit warnings point to a changing balance in the UK economy. EY’s latest Profit Warnings report has reported that UK quoted companies issued 75 profit warnings in the first quarter of 2017 - two more than the previous quarter and one less than the same period of last year. However, EY stresses that this seemingly stable picture masks falling expectations and significant changes beneath the surface that reflect the UK’s changing economic balance. Alan Hudson, EY’s head of restructuring for UK & Ireland, warned: “Increased overheads, political and regulatory change, and digital disruption are piling pressure on sectors with long-standing structural issues, especially in consumer and business services. Periods of rapid change often leave companies behind and the next few years are unlikely to prove an exception.” To read EY's news release go to
Encouraging economic growth in UK and across G7, but productivity levels are still lagging. According to PwC’s latest Global Economy Watch report, real GDP growth in the G7 nations accelerated to 1.7% in the last quarter of 2016, driven by the most consistent growth rates across its members than at any other time in the past 20 years. This improvement has been driven by three key forces: monetary policy (particularly in Europe), fiscal policy and emerging imports. However, PwC analysis also shows that G7 productivity growth rates have been around two-thirds slower post-crisis compared to their historic trend growth rates. Furthermore, the UK has seen one the biggest slowdowns, from a 2.5% per annum average growth rate from 1971-2007 to 0.1% between 2008-2016. To read PwC's news release go to
UK manufactured goods are in demand: strong domestic and export performance. The latest quarterly CBI Industrial Trends Survey has reported that UK manufacturers reported strong growth in orders both at home and from abroad over the first quarter of 2017. In the three months to April, domestic orders improved at the fastest pace since July 2014 and export orders, supported by a strong rise in competitiveness -particularly in non-EU markets which improved at a record pace, recorded the strongest growth in six years. Rain Newton-Smith, CBI Chief Economist, said: “Exports have surged and firms are at their most optimistic about selling overseas in over four decades. Even so, the combination of the weak pound and recovering commodity prices means that cost pressures continue to build, and manufacturers report no sign of them abating over the near-term.” To read the CBI's news release go to
Subdued UK GDP growth over the next couple of years. The National Institute of Economic and Social Research (NIESR) has published a news release which advises that its most recent estimates of UK GDP suggest that output grew by 0.2% in the three months ending in April 2017 (0.3% in the three months ending in March 2017). NIESR currently predicts GDP growth of 1.7% in 2017 and 1.9% in 2018. Simon Kirby, Head of Macroeconomic Modelling and Forecasting at NIESR commented: “GDP growth over the next couple of years will be subdued, growing at less than the economy's long-run potential rate of 2% per annum, but households will feel the pinch from rising consumer price inflation. The rate of inflation is expected to rise from 2.3% per annum in March to almost 3½% by the end of 2017. By 2018 we expect consumer spending growth to have effectively stalled." To read NIESR's news release go to
Economists remain optimistic about US retail sales. Research by Fung Global Retail & Technology has found that total US retail sales for March decreased by 0.2% month-on-month and amounted to US$470.8 billion. The decline was larger than economists’ consensus estimate of a 0.1% drop. Nonetheless, sales at electronics and appliance stores increased by 2.6% (the largest gain since June 2015), apparel stores’ sales jumped 1% ( the biggest increase since February 2016) and e-commerce sales continued their trend of double-digit growth - rising by 11.9% year over year in March. On a year-over-year basis in March, total retail sales increased by 5.2%. Economists remain optimistic about the big picture, citing a strong job market and healthy household balance sheets as indicators that consumer spending is likely to rebound. To read Fung Global Retail & Technology's news release go to
Local UK councils still take up to 38 days to pay suppliers. New research by the Asset Based Finance Association (ABFA) indicates that the slowest paying local UK councils took on average 38 days to pay their suppliers last year. Both Peterborough and East Renfrewshire take on average 38 days to pay suppliers, while Richmond upon Thames takes an average of 36 days. This is despite requirements announced in the 2015 Budget, stating that Government departments must report their performance against payment targets quarterly. To read the ABFA's news release go to
A new high in UK manufacturing business confidence. According to the latest results (Q1 2017) from the UK’s Credit Managers’ Index (CMI), the manufacturing sector is acting as the primary driving force behind business confidence in the UK. The Index – which is the quarterly barometer of the Chartered Institute of Credit Management (CICM) – also reports a reduction in market volatility with overall confidence and business growth in both the manufacturing and services sectors remaining high. The 1.5-point rise experienced in manufacturing sees it close at 62.7, an all-time CMI high. The result also represents a 3.7-point year-on-year rise and the second successive quarter that the sector has improved. To read CICM's news release go to
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