Author: md_admin

Bank deposit protection limit to be increased to £120,000

UK bank customers will benefit from an increase to the maximum amount they would be reimbursed for if their bank were to fail from 1 December, the Prudential Regulation Authority (PRA) has confirmed.

From December, the deposit protection limit, which applies to the Financial Services Compensation Scheme, will protect up to £120,000 of a depositor’s money should their bank, building society or credit union fail.

This increases the limit from the current £85,000 which was set in 2017. It is also more than the previous PRA proposal of £110,000, which the regulator has changed due to consultation feedback and the latest inflation data.

This increase in the deposit protection limit is the latest in a series of regulatory thresholds to be updated by the PRA.

Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA said:

‘This change will help maintain the public’s confidence in the safety of their money. It means that depositors will be protected up to £120,000 should their bank, building society or credit union fail. Public confidence supports the strength of our financial system.’

Internet link: Bank of England

UK could fall behind in net zero race, BCC warns

The British Chambers of Commerce (BCC) has warned that the UK could fall behind in the race to achieve net zero.

Research carried out by global management consulting firm McKinsey and Company showed that the transition to net zero could potentially be worth more than £1 trillion to UK business by 2030.

A survey of more than 2,000 firms revealed that 43% believe costs are ‘significant barriers’ in transitioning to net zero. 34% stated a lack of finance prevented them from transitioning.

The BCC has called on the government to address gaps in funding; combat skills shortages; and ensure stability in regard to policies.

Shevaun Haviland, Director General of the BCC, said:

‘The UK has the businesses, ideas and talent to lead the world in low-carbon innovation.

‘But without urgent action, we risk falling behind in the global race for green growth.

‘We need ministers to work with business to tear down the barriers on finance, skills and policy that are holding too many firms back.’

Internet link: BCC

AI will shrink headcount as hiring confidence remains at record low

One in six employers expect AI to shrink their workforce over the next year, with junior roles most at risk, according to a survey conducted by the Chartered Institute of Personnel and Development (CIPD).

Almost two thirds of those surveyed believe that clerical, junior managerial, professional or administrative roles are most likely to be lost because of AI.

The risk is highest in large private sector firms, where 26% expect headcount to fall, compared with 17% in the private sector overall and 20% in the public sector.

Among those who expect headcount to reduce because of AI in the next 12 months, a quarter expect to lose more than 10% of their workforce.

James Cockett, Senior Labour Market Economist at the CIPD, said:

‘AI is transforming the way many people work and has great potential for improving productivity and performance, but it also risks leaving many people behind.

‘Junior roles stand to be most affected by AI, but we need a national drive to retrain and upskill people of all ages and career stages. It’s crucial that we see rapid progress on the development of the Growth and Skills Levy, informed by genuine consultation with employers, to ensure workers are equipped with the skills for an AI-driven economy.’

Internet link: CIPD

IMF upgrades UK’s economic outlook

The International Monetary Fund (IMF) has upgraded its growth forecast for the UK economy this year.

The global institution upgraded its prediction for UK growth to 1.6% for this year from its previous estimate of 1.5%.

As well as upgrading its outlook for the UK, the IMF suggested the UK economy would perform better than European economies such as Germany, France and Italy over the next two years.

However, the latest IMF figures suggested the UK economy had weaker growth last year than the organisation had expected.

Rachel Reeves, Chancellor of the Exchequer said:

‘The UK is forecast to be the fastest growing major European economy over the next two years and the only G7 economy, apart from the US, to have its growth forecast upgraded for this year.

‘I will go further and faster in my mission for growth through intelligent investment and relentless reform and deliver on our promise to improve living standards in every part of the UK through the Plan for Change.’

Internet link: IMF HM Treasury

Businesses warn of National Insurance ‘powder keg’

The overwhelming majority of businesses say the rise in employers’ NICs will force them to change their plans, according to research by the British Chambers of Commerce (BCC).

With under six weeks until the NICs rise comes in, 82% of firms say the tax hike will cause them to rethink. In addition, 58% of surveyed businesses say it will impact recruitment plans, and 54% that it will affect their prices.

Meanwhile, more than a third of firms suggest investment and day-to-day operations will be impacted.

Alex Veitch, Director of Policy at the British Chambers of Commerce said:

‘The clock is ticking down to the NICs rise, and firms are already telling us they are sitting on a powder keg of costs.

‘The government has pledged to retain the NICs tax position through the life of this parliament, but our new evidence should give pause for thought. We need the government to publish a wider tax roadmap for business, setting out the direction of travel for costs like NICs and business rates.

‘Business rate reform must be an urgent priority, creating a system that incentives investment. Getting on with planning and skills reforms will also remove blockers to growth.’

Internet link: BCC