7 April 2017

Business News Snippets

Concern over lack of rate relief

Concern has been voiced over new business rates that come into effect today, as a £300m support fund set to deliver relief to some firms is not yet up and running. Jerry Schurder, head of business rates at Gerald Eve, said: "Whilst the package of measures announced in the Budget will eventually bring benefit to some businesses, the current uncertainty as to who will qualify and to what extent, is of huge concern." A consultation on the relief fund will conclude next week, and the scheme may not be operational until the summer. In the meantime, individual councils will be left to devise their own guidance over the matter. The Federation of Small Businesses (FSB) has urged councils to quickly pass on government funds. The FSB's regional chairman, Gordon Millward said: "Today's hike in business rates will leave many UK entrepreneurs considering the future. Despite welcome interventions from the government at the Budget, small firms in pockets throughout the country are still vulnerable to staggering increases."
- The Daily Telegraph , Daily Mail

National Living Wage increases

Minimum pay for workers aged 25 and over is rising by more than 4% as the National Living Wage increases from £7.20 an hour to £7.50 from today. However, business groups such as the CBI and the BRC have again raised concerns that prices may rise to cover the cost. In a statement, the Federation of Small Businesses (FSB) said that SMEs typically absorb the cost of wage increases by taking lower profits and owners frequently pay themselves less or cease pension contributions to meet payroll obligations. The FSB added that the Low Pay Commission should now be given flexibility in how to meet the Government's NLW target. It's a target that must be adjusted if it becomes clear that the economy cannot bear the pace of NLW increases."
- BBC News , The Times  

Amazon opens new sales division

Amazon is hoping to disrupt the system of procurement for businesses in the UK by launching a new sales division. Amazon Business will be available from today, offering assistance to small and large businesses and institutional buyers such as universities and hospitals looking to buy products. Around 100m business products will be on offer. There will also be an Amazon Business Analytics function which is designed to help businesses understand what they are spending their money on. Amazon Business has been operating in the US since April 2015, and in Germany since December last year. Paul Egan, chief technology officer of Founders Factory, a start-up platform which expects to make use of the service, said: "As a company, we want to spend as little time as possible purchasing the thousands of things we need to run our business."
- The Times , Financial Times , The Independent , Daily Mirror , The Guardian,  The Sun , Daily Mail

Services firms defy March woes

Services firms have beaten the consumer spending squeeze to pick up growth in March, according to the latest IHS Markit report, which said its combined surveys indicated growth of 0.4% in the opening three months of 2017. Services firms clocked up new work at the fastest pace so far this year, despite job creation slowing, added the CIPS. Meanwhile, JP Morgan has upgraded its forecasts for UK GDP growth from 1.7% to 1.9% for this year, representing a slight improvement on the 1.8% growth recorded in 2016. Improved sentiment among businesses has led the bank to up its prediction for business investment, while it expected a bigger boost to trade after the fall in sterling since June.
- Evening Standard, The Times, City AM, The Sun , Independent, Financial Times, Daily Express

Economic output grows 

The ONS has said that total economic output in the UK rose by 0.7% between October and December - the highest rate for two years. Exports jumped by 7.6% to a record £146.9bn in the final three months of 2016 as the weak pound following the Brexit vote boosted sales of UK goods overseas. Howard Archer, chief UK and European economist at IHS Markit, said the figures were "very welcome news for the economy". He added: "Sterling's marked weakening appears to be increasingly feeding through to lift exports, helped by current decent global demand." 
-Daily Mail