The real effect of the Brexit vote is becoming apparent following a report showing that retails sales have fallen by 0.3%, and not the 0.9% rise that was originally forecast. UK shoppers have made cutbacks on their spending following the rise in inflation leading to a nationwide slowdown in the economy. Reports show that forecasters had not expected a fall following the UK’s decision to leave the EU, however, it has shown that consumers are showing their concerns and have become more cautious with price rises combined with the decreasing value of the pound and the increasing price in fuel.
“The theme for most forecasters this year is that consumer spending is going to suffer as higher prices erode real incomes. But I don’t think anyone would have expected the pace of spending to have suffered so much so soon,” Alan Clarke, an economist with Scotiabank said.
Data shows that the British pound fell sharply by half a percent against the US dollar, however British government bond prices rose both the pound and bond prices are sensitive to future Bank of England interest rate decisions. The bank is in no rush to raise record low rates as they fear it will hurt the spending power of households according to data released by the bank.
The National Statistics Office has said that retail prices rose 1.9% in January; this is in comparison to retail prices the previous year. It is the highest rise since July 2013. It is also a sharp increase from the rise in December, which saw a rise of 0.9%.
The Bank of England have also indicated that consumer borrowing also slowed during December.
The governments changes to UK business rates are so ‘outrageous’ that a number of the UK’s biggest companies have become united in protest. The government has introduced a clause stating that they cannot contest the rising rates. A petition calling for the rates to be dropped has been signed by The Federation of Small Businesses, Revo, The Association of Convenience Stores, the British Chamber of Commerce as well as the British Property Federation.
Small businesses including pubs and restaurants have called for Chancellor of the Exchequer Phillip Hammond to reduce the cost of business rates from the 1st April this year. If the new rates are introduced, tens of thousands of firms could face uncertain futures.
Business rates are calculated in a similar way to Council Tax, the difference being that they are based on the rental value of the space the business occupies, as well as the use of that space, and not just the demographic area upon where that business is based. Unlike Council Tax, businesses can appeal against the amount that they are instructed to pay. Properties were last valued in 2010, and when the rates were issued, almost half of the businesses appealed against their payments.
St Ives fish and chip shop owner, Neil Whitham, has reported that his business rates will increase by 62%, which means that he will end up paying approximately £4,000 more a year under the new system. Because of this rise, the customers will suffer the costs with price hikes.
A government spokesman said the “claims are simply false”.
There is considerable speculation that the PSA Group, Europe’s largest car manufacturer based in France want to take over Vauxhall in the UK. In order to resolve this, the Prime Minister Theresa May has agreed to meet the head of the French group. PSA, a group which includes Peugeot, is keen on purchasing General Motors’ European operation which is currently running at a loss. This would include the Vauxhall plants in Luton and Ellesmere Port. The PSA Group is the second largest car manufacturer in Europe. It is present in 160 countries and possesses 16 production sites across the world.
There is a fear that this could lead to jobs losses. Boss of the PSA Group Carlos Travares is also set for talks with the Unite Union Leader Len McCluskey. It has been reported that he is holding discussions with all parties. With Vauxhall employing 4,500 people across the two plants, it is important that talks are successful. This figure does not include those who work in the retail component of the chain.
A spokesman for Downing Street said that there has been a request for a meeting with Mr Tavares. The General Secretary for Unite, Mr McCluskey said that Mr Tavares “responded speedily and positively”; he also commented that the purpose of the meeting was to put forward the case for the UK’s “World Class facilities and workforce”.
The PSA Group trades in 160 countries and owns 16 assembly locations around the world.
The telecommunications giant, Telco, are losing £2.9 billion per year due to shabby customer service. This makes them the second most complained about sector according to the Ombudsman services. During its annual research, the complaints mediation service found the total number of complaints registered was 55 million in 2016, an increase of 3 million compared to 2015.
13% of complaints were about telecoms providers, with the retail sector being top with 24% of complaints. Surprisingly, energy and transport sectors were significantly less. The energy sector came in with 10% of complaints, while transport registered just 7%. During the Ombudsman Services’ research, 18% of consumers who took part in the survey said that they were resigned to poor service from the telecoms sector.
Lewis Shand Smith, chief ombudsman, said “At the moment, consumers feel that complaining is often a waste of their time, because they see no change in the behaviour of big business. By putting consumers at the heart of what they do, businesses can prevent customers from taking their custom elsewhere, which is good for consumers and good for business.”
Over 300 complaints a day are made to Ofcom about mobile, broadband, phone and paid TV services. Dan Howdle, a consumer telecoms expert at comparison site Cable.co.uk, said “It is outrageous that 18% of consumers are resigned to poor service from telecoms companies. They must do better. No doubt these customers expect they would have similar problems with another broadband and/or mobile provider, so they don’t see the point in switching”.
The broadband companies receive compensation themselves from companies such as Openreach everytime there is a delay in fixing faults or setting up new line connections.
Once the broadband providers receive this, they then fail to pass that compensation on to the customer who has been inconvenienced. It has been reported that 20% of repairs and 6% of installations carried out by Openreach were not completed on time. The survey by the CAB was carried out during the period of April to September 2016.
Gillian Guy, Chief Executive of Citizens Advice, said “It is deeply unfair that broadband suppliers are automatically compensated but customers have to fight for every penny. Companies are paid every time a broadband or landline repair or installation is delayed. But customers who bear the brunt of these problems have to fight for compensation from their broadband company – and may not get any.”
Citizen’s Advice are calling for the discrepancy to be addressed, with a bill currently being passed through the House of Lords. The charity hopes that once the Digital Economy Bill has been passed that consumers will start to receive the compensation that they deserve. There has been a clause inserted in the bill to help ensure that this happens. The clause hands the power to Ofcom to award automatic compensation to those consumers who receive poor service.
A BT spokesman said: “We recognise that this is an important issue and we plan to proactively introduce automatic compensation in 2017.”