Business News Round Up (03/10/2022)
Mini budget threatens UK credit rating
The UK’s credit rating has been challenged following the Mini Budget, as ratings agency S&P downgraded the nation’s outlook from “stable” to “negative”.While S&P maintained the UK’s AA investment grade credit rating, the outlook was shifted on the back of “additional risks” in lending to the UK. The decision was spurred by the recent fiscal statement and the government’s plan to “reduce a range of taxes in addition to its previously communicated intentions to extend wide-ranging support for households on energy bills”. S&P estimated the nation’s budget deficit would widen by 2.6 percentage points of GDP by 2025 as a direct result of the chancellor’s package. “Net general government debt will continue on an upward trajectory, in contrast to our previous expectation of it declining as a percentage of GDP from 2023,” the agency said. It also predicted the UK would enter a technical recession over the coming quarters.
https://www.investmentweek.co.uk/news/4057315/mini-budget-threatens-uk-credit-rating
Small businesses selling on Amazon have created 250,000 jobs in the UK to date
Amazon has published its UK SME Impact Report which highlights how small and medium-sized enterprises (SMEs) selling on Amazon have created 250,000 jobs across the UK to date. Many small business owners have been able to adapt to recent challenges and thrive online for the first time. Over 15,000 UK SMEs selling on Amazon surpassed £100,000 in sales last year, and over 700 reached sales of £1 million or more for the first time. More than half of all physical product sales on the Amazon store in the UK are from independent selling partners, most of who are small and medium-sized businesses. More than 85,000 UK SMEs now sell on Amazon – up more than 25% year-on-year. These businesses reached hundreds of millions of customers around the globe in 2021 – more than half of UK-based sellers exported to another country. They also sold more than 950 million products on Amazon, up from 750 million the year before, which is equivalent to more than 1,750 products a minute on average. SMEs are increasingly seeing success from selling on Amazon’s stores, supporting regional economies and communities. Many of these businesses are located outside of London – for example, North West England now has more than 12,000 sellers, up 35% compared to the year before; Wales has over 2,500 sellers, up around a third on the year before; and Scotland has around 4,000 sellers, up around 30% on 2020. Across major UK cities, SMEs based in Manchester, Belfast and Glasgow selling on Amazon recorded some of the highest average annual revenues, surpassing the average annual revenue of London-based sellers.
Red tape slashed for thousands of SMEs
More SMEs will be exempt from a weight of business regulations – with immediate effect – under changes announced by Prime Minister Liz Truss and Business Secretary Jacob Rees-Mogg. Thousands of the UK’s fastest-growing firms will be released from reporting requirements and other rules to improve efficiency and cut costs. Currently, small businesses are presumed to be exempt from certain regulations. However, many medium sized businesses – those with between 50 and 249 employees – say they are spending more than 22 staff days per month on average dealing with regulation, and over half of all businesses consider regulation to be a burden to their operation. The Prime Minister has announced that these exemptions will be widened to businesses with fewer than 500 employees. It means an additional 40,000 businesses will be freed from future bureaucracy and the accompanying paperwork that is considered expensive and burdensome for all but the largest firms. The exemption will be applied in a proportionate way to ensure workers’ rights and other standards will be protected, while at the same time reducing the burden for growing businesses. Regulatory exemptions are often granted for SMEs, which the EU defines at below 250 employees. However, the post-Brexit environment means the UK is now free to take its own approach and exempt more businesses.
Enterprise chief Brierton stands up for rural firms as difficult winter nears
IN an increasingly noisy and tempestuous world, where so many deserving groups are competing for help as the economy struggles, it can be hard for business to make its voice heard. And, as far as rural enterprise support specialist Jackie Brierton is concerned, the challenge is even pronounced for the thousands of Scottish firms based in remote areas. Take the package of measures recently announced by the UK Government to help tide businesses through the current energy price crisis. The six-month scheme, unveiled by Prime Minister Liz Truss in early September, followed months of intense campaigning from business groups which had become increasingly worried about the surge in energy costs. However, with companies having already been contending with higher bills for many months by that stage, the assistance may come too late for some rural firms. “Although any cap on energy costs for businesses is to be welcomed, the government’s announcement doesn’t go nearly far enough to protect rural businesses from the impact of increases which, for many, have already taken effect,” said Ms Brierton, chief executive of GrowBiz Scotland, an organisation set up to support small businesses, social enterprises and the self-employed across rural Scotland.