Marketing Newscast

(Edited 22 January 2025)

Government borrowing exceeded expectations in December, the Office for National Statistics (ONS) has revealed this morning: the Government borrowed £17.8bn during the month, well ahead of the £14.6bn projected by the Office for Budget Responsibility (OBR). The sum is the third highest December figure on record, behind only 2009 and 2020. Meanwhile, the cost of interest payable on central government debt was £8.3bn, nearly £4bn higher than last year; the third highest December figures since January 1997. In the first nine months of the financial year, government borrowing has totalled £129.9bn, exceeding the OBR’s forecasts for the same period by £4.1bn and putting year-on-year borrowing at the second highest level since records began in 1993. Commenting on the data, ONS Deputy Director for Public Sector Finances Jessica Barnaby said: “Compared with December 2023, spending on public services, benefits, debt interest and capital transfers were all up, while an increase in tax receipts was partially offset by a reduction in National Insurance contributions, following the rate cuts earlier in 2024”. Darren Jones, chief secretary to the Treasury, said his departments fiscal rules – which include a guarantee that government spending will not exceed tax receipts - were “non-negotiable” and he promised to cut back on unnecessary government spending. “Through our Spending Review we will interrogate every line of government spending for the first time in 17 years. We’ll root out waste to ensure every penny of taxpayer’s money is spent productively and helps deliver our Plan for Change,” he said. The spending review is set to conclude in June. Chancellor Rachel Reeves insisted yesterday at the World Economic Forum in Davos, Switzerland, that Britain’s public finances “are now in order”.

Rachel Reeves has intervened in the motor finance mis-selling scandal, saying it could cost the industry billions of pounds, trigger a withdrawal of companies from the sector and prevent customers accessing credit to buy cars. An Appeal Court judgement in October opened the door to what lenders fear could force them to pay out £30bn in compensation to customer in a scandal as large as that of the PPI mis-selling claims: the Court ruled it unlawful for car dealers to receive a commission from banks providing motor finance without obtaining the customer’s informed consent to that commission payment. An appeal against the ruling is set to be heard by the Supreme Court in April. “We want to see a fair and proportionate judgement that ensures compensation to consumers that is proportionate to the losses they have suffered, and allows the motor finance sector to continue playing its role in supporting millions of motorists to own vehicles,” a Treasury spokesperson said today. Motor finance is taken out on some 80% of the new car market.

Compulsory liquidations have hit their highest level in number since 2014, new data from the Insolvency Service shows. In 2024 there were 3,320 compulsory liquidations - when a firm is forced to close down because it fails to meet debt repayments - the highest number for 10 years and a 14% increase on the year before.

Doug Gurr, who ran Amazon UK for nine years until 2022, has replaced Marcus Bokkerink as chairman of the Competition and Markets Authority (CMA) on an interim basis. Bokkerink has reportedly been forced out of his job after three years into a five-year term, at the behest of Business Secretary Jonathan Reynolds, it is claimed. Gurr’s appointment is significant; t Amazon, he accused the CMA of a “speculative” effort to block a minority investment in the FTSE 250’s Deliveroo in 2018, and five years later, Deliveroo CEO Will Shu claimed the watchdog was “trying to kill companies”. The Telegraph points out that under Bokkerink’s leadership, the CMA has intervened in a number of high-profile deals, including an effort to block Microsoft’s $69bn (£56bn) takeover of gaming company Activision in 2023, which led to the former’s boss Brad Smith claiming his confidence in the UK had been left “severely shaken”. A government source conceded a change in direction, telling Sky News: "This is a signal that we're serious about changing the culture of regulation in order to get growth. The government wants to show it is serious about investment." They refused, however, to comment on the removal of Bokkerink’s decision to stand down. Shadow Businesss Secretary Andrew Griffith said Labour’s decision to appoint Gurr in the name of growth “seems odd when they are simultaneously appointing their trade union and party donors elsewhere”.

Wetherspoons said increases in the minimum wage and employer national insurance contributions would cost £60m as it reported a 5.1% jump in like-for-like sales in the 25 weeks to January 19^th.

AIM-listed Boohoo shareholders have rejected an attempt by Frasers Group to remove co-founder Mahmud Kamani from the company's board. 63% of the votes cast opposed the motion put forward by Frasers, which owns a 27% stake in the online fashion retailer. A few weeks ago, 63.7% of shareholders voted against appointing Frasers’ founder Mike Ashley and restructuring specialist Mike Lennon to the board.

Wine makers in the South East of England are calling for Eurostar services to be restored to Ashford International and Ebbsfleet, after being suspended since Covid lockdowns. “The resumption of Eurostar services from Ebbsfleet and Ashford International would be of great benefit to our industry,” Nicola Bates, CEO of industry body WineGB, told City AM. Around 25% of total winery income is generated by tourism, and 60% of producers plan to invest in vineyard tours and other offerings over the next year, WineGB survey found.

Although US President Donald Trump did not immediately impose tariffs on foreign imports following his inauguration, as was feared, he has now said he is thinking about imposing 25% duties on imports from Canada and Mexico from 1^st February over illegal immigrants and fentanyl crossing into the US. He has also instructed the Secretary of the Treasury to investigate whether the home countries of “any foreign country subjects, United States citizens or corporations” are unfairly taxing American interests overseas, under powers conferred by section 891 of title 26, United States Code. This gives the President the power to double the rate of tax on them. He has also removed the USA from an agreement on a global minimum corporation tax of 15% which has been backed by 140 nations and orchestrated by the Organisation for Economic Cooperation and Development (OECD). The US signed up to the deal under former President Joe Biden, but Trump says it gave unfair control to the OECD power over US tax policy. The UK signed up to the scheme in October 2021, when Rishi Sunak was Chancellor.