Industry news round-up

Industry News

1. Half of SME workers have start-up ambitions

A survey by Purbeck Personal Guarantee Insurance has found that 50% of workers employed by SMEs have ambitions to start their own business. While younger employees were most likely to hold entrepreneurial ambitions, with 66% of those between 25 and 34 saying they would like to start an enterprise, 43% of those aged 55 and over also want to create a start-up. Of the respondents, 57% of men said they wanted to start their own business compared to 43% of women.

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2. FCA sees cyber incident reports jump 52%

The Financial Conduct Authority (FCA) received 116 reports of cyber security incidents in 2021, up from 76 in 2020, analysis by Picus Security has found. This marks a year-on-year increase of 52%. Of the incidents reported, 65% were due to cyber attacks and approximately a third contained notifications where the confidentiality of company or personal data may have been compromised or breached. The analysis also discovered that one in five incidents reported to the FCA in 2021 involved ransomware.

3. Consumer lending surges to £1.9 billion

Figures from the Bank of England show that lending to consumers rose by the most in nearly five years in February, jumping 90% compared to January. Consumer credit rose by a net £1.9 billion, driven by a record rise in credit card borrowing, which hit £1.5 billion. The Bank said the increase pushed the annual growth rate for all forms of unsecured credit from 3.2% to a two-year high of 4.4%, raising the total outstanding consumer credit balance to £199.5 billion.

4. Bank of England expects 1970s' style energy shock

The increase in the price of energy and other goods and services would likely cause growth and demand to slow, Governor of the Bank of England, Andrew Bailey has said, explaining that this pressure on demand is expected to weigh down on domestically generated inflation. Analysts expect the Bank to raise interest rates to 1% in May, but Bailey said inflation could go either way, citing the pandemic followed by a European war as a difficult position to be in for policy.

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5. CMA relinquishes control of open banking unit

The Competition and Markets Authority (CMA) has relinquished its oversight of Britain’s open banking unit to the Financial Conduct Authority, which will lead a new committee, alongside the payments’ regulator, that will be responsible for regulating open banking technology. The new committee will also oversee the Open Banking Implementation Entity’s transition to a new permanent body. The CMA will be represented on the new committee but will hand over its leading role. The Treasury will also be represented.

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6. Inflationary fears amid drop in UK retail sales

British retail sales fell in February despite the amount spent by consumers rising. The figures highlight the effect of inflation squeezing household finances and raise concerns that surging inflation was stunting the UK’s economic recovery well before Russia invaded Ukraine. “Real household disposable income now looks set to drop by about 2.5% this year, comfortably the largest annual drop since records began in the late 1940s, due to both high inflation and government policies,” said Samuel Tombs of Pantheon Macroeconomics.

7. Business investment could rise 20% with right relief

The Confederation of British Industry (CBI) has predicted that business investment would soar by 20% if Chancellor Rishi Sunak opts to slash business taxes permanently following the end of the super-deduction relief next year. The super-deduction takes 130% of investment off taxable income. CBI director-general Tony Danker said that “allowing companies to write off 100% of their investments against tax straightaway… could see a 20% rise in business investment so that is I think the best prize.”

8. Britain and Canada begin talks on new FTA

The UK and Canada have begun negotiations on a multi-billion-pound, post-Brexit trade deal with International Trade Secretary Anne-Marie Trevelyan declaring a pact could “strengthen and grow trade” between the two countries. The new Free Trade Agreement will benefit more than 10,000 UK SMEs. Martin McTague, Federation of Small Businesses national chair, said: “A dedicated SME chapter should be placed at the heart of any future agreement to ensure that small businesses can make best use of the FTA’s provisions.”

9. Lenders pass on higher rates to customers

Homeowners have been hit with higher borrowing costs as lenders pass on the Bank of England’s interest rate rise. Halifax, Santander, Lloyds, Nationwide, and Skipton Building Society all added 0.25 percentage points to their standard variable rate deals just days after Threadneedle Street increased the Bank Rate to 0.75%. The lowest mortgage rates have doubled in the past six months and borrowers are now paying £840 a year more for the average loan than they did in October last year, analysis shows.

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10. Sunak’s Spring Statement: What went down?

Rishi Sunak has raised the national insurance threshold by £3,000 and announced a cut in fuel duty tax by 5p a litre. The chancellor announced that he is increasing the rate at which workers start paying national insurance to £12,570. The national insurance threshold will now be in line with income tax from July this year. Unexpectedly, Mr Sunak also announced he would cut the basic rate of income tax from 20p to 19p in the pound starting 2024.

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