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  • Daily business and finance update 17th May 2023

Daily business and finance update 17th May 2023

Millions more paying higher taxes

Good morning. Today we're talking about millions paying higher taxes, millions on long term sick and Vodafone cut backs.

Big Stories

Tax raid

A fifth of taxpayers will end up in the 40% income tax band due to the government not raising its threshold with inflation, according to the Institute of Fiscal Studies. Income tax band thresholds have been frozen since April 2021. The current government plan is to hold them where they are until the 2027/28 tax year. Until 2028, all income above £50,270 will be taxed at 40% or more, in what the think tank said will effectively be the biggest tax increase since the 1970s. By 2028 an estimated 7.8m people will be in the higher rate band – 2.6m more than today - and nearly quadruple more than paid in the early 1990s. The freeze on the tax thresholds also means that one in eight nurses and one in four teachers will be in the higher bracket.

Out of the labour market

New employment data from the Office of National Statistics revealed that more than 2.5m remain officially long-term sick, a record high. The ONS cited an increase in mental health issues in younger people and people suffering back and neck pain, possibly due to home working, for the rise. The aftermath of the pandemic like long COVID symptoms was also blamed. Elsewhere, the unemployment rate rose slightly to 3.9% in March from 3.8% the previous month, while vacancies fell to their lowest level for 18 months amid the economic uncertainty of high inflation and rising interest rates. 

Telecoms turnaround

Vodafone plans to cut 11,000 jobs worldwide over the next three years as part of a turnaround plan. The announcement came as new CEO Margherita Della Valle lambasted the company’s performance as simply “not been good enough” and said there would now be a focus on simplifying the organisation and cutting out complexity. Vodafone employs over 100,000 people globally but did not say how many of its 12,000 UK workers would be affected by the cuts. In recent years the telecoms giant has struggled with higher energy bills which are driving up costs and impacting profitability. It has also seen weaker sales in Germany, its biggest market, as well as Italy and Spain where it has struggled to keep pace with rivals. The lacklustre performance has seen the share price slump to their lowest level since 1997.


Crackdown on the horizon: Netflix has warned UK telecoms companies to brace for a backlash from customers as the streaming service prepares to crackdown on password sharing.

Rental shake up: More than 10m renters will no longer face the threat of 'no fault' evictions or a blanket ban on pet ownership under new government proposals.

Out of fashion: Boohoo posted a £91m loss as its annual sales fell and it faced higher levels of returned products as shoppers returned to the high street.

Saying sorry: The Bank of England's top economist has expressed regret for saying people need to accept being poorer.

Opening up: Greggs said it had reached a deal with Westminster City Council over the range of products it can sell in the early hours of the morning in central London.

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