Month: April 2024

The UK construction industry has marked a significant turnaround, returning to growth after enduring six consecutive months of decline, as revealed by a closely monitored survey.
S&P Global’s survey highlighted a resurgence in civil engineering projects and a stabilization in housebuilding activities as key drivers behind the sector’s recovery.
The Purchasing Managers’ Index (PMI) score, derived from the survey data, climbed to 50.2 in March, surpassing February’s 49.7 and marking the highest reading since August of the previous year. A PMI score above 50 indicates expansion in the sector.
Tim Moore, S&P Global’s Economics Director, noted the promising outlook for the industry, citing improvements in order books and a rebound in tender opportunities. He attributed these positive developments to factors such as reduced borrowing costs and early signs of economic recovery in the UK during the first quarter of 2024.
However, Moore highlighted persistent challenges in hiring, with concerns over margin pressures and risk aversion among major clients hindering employment growth. Delays in replacing departing staff led to a decline in total employment numbers for the third consecutive month.
S&P Global’s survey also revealed a moderation in supply chain pressures, signaling some relief for the sector.
Earlier this week, a similar survey focusing on the UK manufacturing industry reported growth for the first time in 20 months, signaling a gradual economic recovery from the impact of high inflation in the previous year.
The Competition and Markets Authority (CMA) recently raised concerns about the inadequate delivery of new homes in the UK, prompting an investigation into major housebuilders. The widening gap between housing supply and demand has been a pressing issue addressed by the regulator.
Matthew Pointon from Capital Economics interpreted the latest PMI figures optimistically, forecasting a gradual rise in construction activity driven by falling interest rates. He noted a slight improvement in housing activity, suggesting stabilization in housing construction and a recovery in demand as mortgage rates ease.
While acknowledging recent fluctuations in interest rates, Pointon highlighted data from the National House Building Council (NHBC), indicating a recovery in housing starts from the lows observed in the latter half of the previous year.
Read more:
UK Construction Industry Rebounds, Ending Six-Month Decline

Insolvency practitioners overseeing The Body Shop’s affairs are contemplating a Company Voluntary Arrangement (CVA) as part of a strategic move to save one of Britain’s well-loved high street brands.
FRP Advisory, the appointed administrators, have disclosed plans for a potential CVA, which would entail engaging in discussions with landlords to secure rent reductions and address other creditor concerns. The proposed CVA seeks to facilitate The Body Shop’s exit from administration and enable its continued operation under the ownership of Aurelius, the investment firm that acquired the brand just months ago.
The collapse of The Body Shop into administration earlier this year underscored the challenges confronting the retail stalwart, founded nearly fifty years ago by Dame Anita Roddick and Gordon Roddick. Aurelius assumed ownership amidst a bleak financial scenario, characterized by adverse cash positions attributed to poor financial performance in the preceding year and depleted stock levels post-Christmas trading.
Aurlius encountered immediate cash flow challenges, exacerbated by unexpected costs and terminated banking facilities, precipitating a substantial funding shortfall exceeding £100 million. The strain prompted the closure of nearly half of The Body Shop’s UK stores and significant job losses at its headquarters.
Despite these setbacks, FRP remains optimistic about The Body Shop’s prospects, envisioning a revitalized brand poised for long-term profitability. The proposed CVA aims to provide a lifeline for the iconic retailer, allowing it to reposition itself as a modern, dynamic beauty brand.
While the specifics of the CVA proposal are yet to be finalised, FRP anticipates unsecured creditors to receive dividends in due course, although the exact size remains undetermined.
Aurelius’s ongoing financial support during the administration process underscores its commitment to sustaining The Body Shop’s operations amidst the restructuring efforts. Notably, The Body Shop’s businesses across Europe and parts of Asia had been divested to a family office prior to the UK arm’s insolvency.
Despite facing challenges in recent years and increased competition, The Body Shop’s legacy as a trailblazer in environmental advocacy and cruelty-free cosmetics endures, reflecting its enduring significance on British high streets.
As The Body Shop navigates its path forward under new ownership and amidst ongoing restructuring, stakeholders remain hopeful that the brand’s distinctive ethos and enduring legacy will continue to resonate with consumers in an evolving retail landscape.
Read more:
The Body Shop’s Administrators Consider CVA as Rescue Path

The latest figures from UK insurers reveal a staggering 34% increase in car insurance premiums for British drivers, significantly outpacing the more modest rises observed in the rest of Europe.
The Association of British Insurers (ABI) disclosed that despite a substantial 18% rise in motor claims payouts last year, British drivers encountered premium spikes far exceeding those seen across the continent.
Contrary to the UK’s sharp increases, car insurance premiums in Italy climbed by 6%, Spain by 5%, and France by a mere 2%, according to financial disclosures from one of Britain’s prominent insurers, Admiral, which also operates in European markets.
The ABI’s acknowledgment of the disparity between UK insurance payouts and the soaring cost of cover may reignite calls for an investigation into potential market exploitation affecting British drivers. Reports indicate instances of car insurance renewals soaring by 50% or more, exacerbating the strain on drivers amid a burgeoning cost of living crisis.
The steep surge in premiums has not spared owners of electric vehicles (EVs), with some experiencing premiums doubling over the past year, reaching staggering amounts exceeding £5,000. Meanwhile, in Germany, Europe’s largest car market, premiums rose by 11% to 13%, surpassing those of its European counterparts but still falling considerably short of the burdens shouldered by British motorists.
While the ABI attributes the rise in UK premiums to escalating vehicle repair costs, increased theft-related payouts, and rising expenses for temporary replacement vehicles, concerns persist regarding insurers leveraging inflationary pressures to bolster profit margins. Despite a 17.85% rise in total UK claims payouts, reaching £9.9 billion in 2023, the substantial premium hikes indicate a potential discrepancy in insurers’ pricing strategies.
Calls for regulatory intervention to scrutinize the fairness of UK motor insurance pricing have intensified, with stakeholders expressing apprehensions over potential market exploitation. Although the Financial Conduct Authority (FCA) has refrained from launching a full investigation, parliamentarians and consumer advocates continue to advocate for closer oversight.
Carla Lockhart MP has urged the government to advocate for greater scrutiny of the industry, highlighting constituents’ discontent over “exorbitant” insurance costs. Jonathan Fong, ABI’s manager for general insurance policy, underscored insurers’ efforts to mitigate rising costs while urging consumers to explore competitive policy options.
Admiral cited the UK’s unique liability framework as a contributing factor to higher premiums compared to EU counterparts, emphasizing variances in injury claims and inflation drivers across different jurisdictions. As debates persist over the fairness and transparency of UK motor insurance pricing, calls for regulatory scrutiny intensify to ensure equitable treatment for British drivers.
Read more:
UK Car Insurance Costs Surge by over a Third, but just 2% in France

The UK economy appears to have turned a corner, showing signs of recovery and gaining momentum, as highlighted by two influential surveys revealing a “turning point” in growth.
Research conducted by BDO, a consultancy firm, indicates that output surged to its highest level since May 2022 last month, accompanied by a decline in inflation to its lowest level in over three years.
The BDO Output Index rose to 102.39 in March, surpassing the 100-point threshold that delineates growth from contraction. This uptick was propelled by increased activity in both the services and manufacturing sectors.
Kaley Crossthwaite, a partner at BDO, remarked, “Output reaching its highest point in nearly two years illustrates the UK’s robustness in the face of global economic adversities and is a significant stride towards economic stability and growth.”
These findings align with other surveys indicating expectations for impending interest rate cuts and a moderation in price growth, which buoyed output last month. Purchasing managers’ indices for the services, manufacturing, and construction sectors all registered above the 50-point mark indicative of growth, marking the first simultaneous growth signal since June 2022.
Following a contraction in GDP of 0.1 per cent and 0.3 per cent in the third and fourth quarters of last year, respectively, the UK economy grappled with recession. However, the International Monetary Fund forecasts a 0.6 per cent expansion for the UK economy this year.
A slowdown in the growth of food, alcohol, and restaurant prices contributed to BDO’s inflation index declining to 96.81, its weakest reading since February 2021 amidst Covid-19 lockdowns.
These data hint that the Office for National Statistics’ official inflation estimate for March, slated for publication on April 17, may decrease from 3.4 per cent. Additionally, they bolster expectations for forthcoming interest rate cuts by the Bank of England from a 16-year high of 5.25 per cent.
According to financial markets, the monetary policy committee is anticipated to reduce the UK base rate three or four times this year, commencing either at the June or August meetings, potentially invigorating UK economic growth that has languished over the past 18 months.
However, BDO notes that employment has sustained its downward trend for the ninth consecutive month, dropping to its lowest level in over a decade. The monetary policy committee has expressed intent to lower rates only once the labour market has cooled sufficiently.
Meanwhile, Deloitte’s survey of 64 chief financial officers from leading UK-listed companies, including eight FTSE 100 and 23 FTSE 250 firms, with a combined market value of £201 billion, indicates growing confidence in trading prospects.
Ian Stewart, chief economist at Deloitte, observed, “Optimism among the UK’s largest businesses is running at well above average levels, suggesting that the worst of the economic downturn is behind us, with current sentiment at levels that preceded periods of good growth in 2010, 2014, and 2021.”
Chief financial officers anticipate interest rate cuts of a full percentage point over the next 12 months, alongside expectations for inflation to decline to 2.9 per cent in a year’s time, still above the Bank of England’s 2 per cent target. Over a two-year horizon, they envisage inflation dropping to 2.3 per cent, down from 2.9 per cent in the preceding survey.
Read more:
UK Economy Shows Signs of Recovery as Growth Reaches Turning Point

Lunaz, the electric vehicle company backed by David Beckham, has undergone substantial job losses after entering administration, marking a significant setback for the Silverstone-based enterprise.
Administrators from FRP were recently appointed to oversee the operations of Lunaz Group, which included Lunaz and App Tech Productions, specializing in the electrification and upcycling of classic cars and commercial vehicles, including refuse lorries.
In a joint statement, administrators Sarah Cook and Miles Needham lamented the situation: “Lunaz Group had developed a forward-looking product, designed to support the circular economy and give new leases of life to both heritage and working commercial vehicles. Unfortunately, the recent extension to the deadline for the transition to zero-emissions vehicles led to a slowdown in sales and the decision to appoint administrators to the group. Regrettably, this impacts the employees who we will continue to support through their redundancy claims in the coming weeks.”

Earlier, Lunaz attributed its decision to enter administration to the delay in the planned ban on the sale of petrol and diesel vehicles. Prime Minister Rishi Sunak had announced last year a postponement of the ban by five years, shifting it from 2030 to 2035.
According to filings with Companies House, David Beckham holds 200,000 shares in Lunaz Group, while founder and CEO David Lorenz owns 600,000 shares. Other shareholders include OPI Investments, Serum Life Sciences, Glasgow Investments, Blue Endeavor Ventures, Progressive Media Investments, and PG Ventures Investments.
Despite being valued at up to $200 million following a funding round in 2022, Lunaz has encountered significant challenges amidst the evolving landscape of electric vehicle adoption and regulatory frameworks. The company’s fate underscores the complexities and uncertainties facing businesses in the transition towards sustainable transportation solutions.
Read more:
Beckham backed vehicle electrification company Lunaz makes substantial job losses after entering administration

When considering possible exit routes for your business, selling to an Employee Ownership Trust (EOT) can have several benefits, but a word of caution, this is not an exit route that can just be unilaterally imposed on your management team.
I recently met with a business owner who had decided that sale to an EOT was the best way to exit his business and apparently for the twin temptations of paying zero capital gains tax and inflating the sale price. He came up with a generous valuation, drafted transfer documents to suit his own terms and presented all of this to his team to sign without any prior discussion. This didn’t go down well and naturally the team weren’t prepared to sign anything. Thankfully this doesn’t happen often, but there are several mistakes which business owners can make if they don’t take advice on how to approach selling to an EOT.
Not all employees want to become the ‘owner’ of the business they work for. For some it will seem like too much risk or responsibility so you can’t just impose the decision upon them.
The first step needs to be an open discussion around the possibility of sale to an EOT to set out the pros and cons for the business and to give the remaining senior-employee team time to discuss the options available. The time frame for this might be weeks, months or even a couple of years before it takes place to allow everyone time to adjust and plan.
Employees need to have the support of independent legal and financial experts to help them to make informed decisions, which should be paid for by the business.
The next step is looking at what the business is worth so that there is a starting point for negotiations on price. Typically, more than one external valuation should be obtained to facilitate reaching a sensible price somewhere in the middle.
Whilst usually a significant initial payment will be made to the sellers, equally there may be significant deferred payments to be made from future profits of the business for many years after completion. The purchase price and repayment terms must be sustainable to ensure the business can continue to invest and grow.
Those employees that are interested in stepping up and taking on more responsibility need to understand what their new role will be, any legal responsibilities that go with it and how they will be rewarded with an enhanced salary and/or bonus arrangements.
In a well-run process, sellers will take real care to ensure that the senior management team will be stable and well-motivated to make a success of the business following sale, so that the agreed price can be paid in full by the business over the agreed period.  There is often provision made for deferred payments to be accelerated or further deferred depending on how the business is preforming after completion.
In some businesses the culture of employees sharing in the success of the business through share ownership is embedded well before the ultimate sale to the EOT in the form of employee share option arrangements.  For some owners, sale to an EOT is a continuation of this culture and allows employees to feel more empowered and more invested in the future success of the business. There are studies which suggest that in businesses where there is employee share ownership productivity tends to be higher and long-term sickness and issues around poor performance tend to reduce.
When done well a sale to an EOT can be less stressful than a traditional 3rd party sale for all parties involved as there is usually the continuity of the management team and people stay in key roles. There is continuity for customers, suppliers and other key stakeholders and there is time to adjust to the new arrangements.
Clearly this is a brief summary of the legal issues involved, so if you would like to discuss an EOT sale/purchase, get in touch to find out more.
Read more:
The dos and don’ts of selling to an Employee Ownership Trust

Google is reportedly exploring the possibility of charging users for access to “premium” internet search results driven by artificial intelligence (AI), a recent report reveals.
According to sources, the tech behemoth is evaluating various strategies for leveraging AI technology, including integrating advanced search functionalities into its premium subscription offerings.
Under the proposed plans, Google’s primary search engine would remain freely accessible, with additional content reserved for paying subscribers, as disclosed by insiders to the Financial Times.
Even for subscribers, advertisements would continue to accompany search results, the report notes, highlighting the vast user base of over a billion people who utilise the search tool each month.
While Google already monetises certain features such as expanded storage and its “AI Premium” service, granting access to the new Gemini AI assistant in platforms like Gmail and Docs, this potential initiative would mark the first instance of placing core products behind a paywall.
The Financial Times obtained insights into these deliberations from three sources within Google, indicating ongoing efforts by engineers to develop enhanced AI tools. However, company executives are yet to finalize decisions regarding the introduction and timing of this feature.
Responding to queries, a spokesperson for Google informed Sky News, “We’re not working on or considering an ad-free search experience.” They reiterated Google’s commitment to continually enhancing subscription offerings with new premium capabilities and services.
Amidst fierce competition among tech firms in harnessing AI, Google’s strategies have drawn scrutiny, with some observers suggesting the company is grappling to keep pace with rivals like ChatGPT.
Recent controversies surrounding Google’s AI applications include reports of restricting its AI chatbot Gemini from addressing election-related queries in certain regions due to concerns about disseminating misleading information. Additionally, in February, Google ceased the tool’s image generation function following complaints regarding “inaccurate” historical depictions of individuals.
Read more:
Google Mulls Charging for Premium AI-Powered Search Results

The UK government has unveiled the import charges for EU food products post-Brexit, revealing potential implications for food prices and supply chains.
Small imports of items such as fish, salami, sausage, cheese, and yoghurt will incur fees of up to £145 starting from April 30, according to the Department for Environment, Food and Rural Affairs (DEFRA).
The “common user charge,” applied to animal products, plants, and plant products entering the UK from the EU through the Port of Dover and the Eurotunnel at Folkestone, has raised concerns within the food industry. The Cold Chain Federation warns that these charges could lead to increased food prices, ultimately impacting businesses and consumers.
Phil Pluck, Chief Executive of the Cold Chain Federation, highlights that the fees will likely be passed on to EU importers, smaller UK retailers, or UK consumers, resulting in elevated business costs and potentially reduced consumer choices.
The introduction of these charges aims to fund border inspections and new facilities in Kent to safeguard biosecurity. However, industry voices such as the Horticultural Trades Association (HTA) express skepticism, criticizing the policy’s hasty implementation and potential ramifications on costs and consumer options.
James Barnes, Chairman of the HTA, underscores the disproportionate impact on horticultural businesses, anticipating increased costs and diminished consumer choices due to the flat-rate charge structure.
Labour echoes concerns about rising prices and supply chain disruptions, emphasizing the need for measures to alleviate bureaucratic burdens. Shadow Minister Nick Thomas-Symonds urges negotiation with the EU to minimize the need for checks, thereby reducing costs and enhancing competitiveness for British businesses.
In response, the government defends the charges as necessary to recover operating costs for border facilities and safeguard the food supply, farmers, and environment. A spokesperson emphasizes consultation with industry and the cap set to assist smaller businesses in adapting to new border checks.
As the UK navigates post-Brexit realities, the disclosure of import charges underscores ongoing challenges for businesses and consumers alike. Business Matters examines the implications of these charges and the broader implications for the UK’s food industry in a changing regulatory landscape.
Read more:
Brexit Import Charges Unveiled: Fears of Food Price Surge

It is being predicted that there will be a huge upsurge in parents starting work early under new Flexible Working laws.
The law change, which comes into effect on April 6, will require that employers consider employee requests for flexible working in good faith and consult with them on how they might be able to make them work.
Employees will also be able to make these requests on “day one” of their employment, meaning new starters might look to set new patterns of work immediately.
Employers can still reject a request for flexible work if it is plainly unworkable and would harm business operations.
HR experts at Employment Hero, which already embraces flexible working, predict the change will lead to a massive increase in the UK’s 13 million working* parents requesting flexible working hours.
Employment Hero CEO Ben Thompson commented: “The traditional 9-5 workday no longer meets the needs of our team, especially parents. At Employment Hero, we embrace remote work and empower our team to craft their own schedules. We’ve observed a significant shift among parents, who are opting to begin work as early as 5am, so they can tackle work before attending to their children’s school or childcare commitments around 9am. This early start allows them the flexibility to wrap up work earlier in the afternoon, prioritising family time and avoiding the rush to complete tasks after picking up their children. 5am is evolving into the new 9am.”
“The UK has roughly 13 million working parents. Not all of them will switch to flexible working – but millions will. Employers should be proactive in updating their policies to reflect this new normal, because if they don’t, these parents will take their experience somewhere where it is more valued.”
Lucy Sharp, a full-time employee at Employment Hero, is just one parent embracing this new normal:
“Juggling full-time work as a mum of two is hard. If I had to manage 9-5 office hours alongside a commute, childcare expenses, school runs and after school clubs, then full-time employment would literally be impossible for me. I feel very lucky that I’m encouraged to embrace flexible working at Employment Hero. Being able to choose my own hours means I feel valued, and it gives me freedom to enjoy those little but important moments with my kids.”
Employment Hero has adopted a fully remote working policy for the last four years.  Since transitioning to a remote model, they have witnessed remarkable growth – head count has increased 5x, revenue has soared almost seven-fold, and their valuation has increased by approximately $1.7 billion.
“We’re living proof that flexible work benefits both employees and employers” Thompson continues.
“This debate over allowing people to work flexible hours or not is at the expense of more valuable discussions around productivity and innovation. Employees like Lucy are invaluable to our business – so we will do anything in our power to ensure she is the happiest, most productive version of herself while at work.“
Read more:
‘5am the new 9am’ under new flexible working regime