BUSINESSES FACE TOUGHEST “EXTERNAL CHALLENGES” FOR EIGHT YEARS

Finance leaders at major UK businesses say their firms face the toughest “external challenges” for eight years due to the impact of rising inflation and the risks from the war in Ukraine, according to a survey by Deloitte (Bloomberg). 98 per cent of chief finance officers surveyed said they believe their operating costs will rise in the year ahead, the highest level ever reported. A separate survey by BDO found that around six in ten businesses had only budgeted for inflation to be between three and five per cent this year (The Times). As a result, 31 per cent of businesses said they are seeking to raise extra finance, with almost a quarter saying they were “taking on higher levels of debt to ensure their survival”.

WORLD BANK CUTS GLOBAL GROWTH FORECAST

The World Bank is cutting its forecast for global growth this year from 4.1 per cent to 3.2 per cent due to the impact of the war in Ukraine (Reuters). The World Bank’s president, David Malpass, said that the organisation was preparing a $170 billion support package in response to the combined effects of the war, the Covid-19 pandemic and inflation on the poorest countries (The Guardian). Meanwhile, the International Monetary Fund has said that the global economic recovery could be put off course by the rising levels of debt held by businesses and individuals (Daily Telegraph, print only). 

NEWS IN BRIEF

More than 1.5 million subscriptions to digital streaming services were cancelled in the first quarter of 2022 as households cut back on their spending, according to research from Kantar (Sky News).

Landlords will be forced to rent out retail units that have been vacant for more than six months under government plans to be introduced as part of the Levelling Up and Regeneration Bill, reports the Daily Mail.

Jacob Rees-Mogg, the minister for government efficiency, has written to all secretaries of state to ensure a rapid return to the office for civil servants (Daily Telegraph).

The British Chambers of Commerce has called for all companies to be given free or cheap lateral flow tests to help protect staff and customers (BBC News).