Mosaic Accountancy & Finance Newsletter: August 2024

INTEREST RATE CUT!

After two years during which the Bank of England raised interest rates at nearly every occasion - and another year in which those rates sat at what is, for many households and businesses, a painfully high level - they have finally been cut.

The big question now is: what next? First things first, don't expect those borrowing costs to come down as quickly as they went up. Markets think there might be one more cut this year, and that borrowing costs will come down quite gradually.

Second, few people inside the Bank expect borrowing costs to come down to the levels they were at back in 2021, when they were sitting at a historic low of 0.1%. Instead, they seem moderately happy with market expectations that rates will drop only to 3.5% over the next three years.

RACHEL REEVES SPEAKS TO THE COMMONS...

Chancellor Rachel Reeves spoke to the House of Commons on Monday 29th July following a review of the government finances after taking office at the start of the month.

A key point mentioned was a ￡22 billion black hole in the public finances as she accused the Tories of covering up the scale of the problems.

The chancellor said her aim was to “expose the scale of what has been uncovered” after Labour came to power.

KEY TAKEAWAYS:

• Wednesday 30th October 2024 will be the date of the new government’s first budget.
• Ruled out raising income tax, national insurance or VAT, as per the Labour manifesto.
• Confirmed ending to the universal winter fuel payments, which are currently paid to all pensioners.
• Cancellation of Rishi Sunak’s reforms to A-Levels to save money.
• The A303 Stonehenge project scrapped.
• Pay rises for doctors, teachers and other public sector workers.
• “Difficult decisions” to meet Labour’s fiscal rules, and said this would include decisions on spending and tax.

5 TIPS FOR HIRING!

Are you struggling to hire quality candidates?

• Salary: Ensure you include salary information on adverts, otherwise you risk candidates not applying.
• Hybrid Working: This is a huge pull for candidates currently - so try to offer in some capacity, failing that can you offer flexibility on working hours.
• Job Title: Use different / similar titles on adverts to attract more candidates. E.g. ‘Bookkeeper’ could be ‘Accounts Assistant’.
• Interviews: Show candidates the environment - not just the interview room.
• Onboarding: Once you have offered a candidate, ensure you check-in weekly during their notice period.