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  • Writer's pictureEdgar Rayo

Finanze Business Daily Digest - 16/11/2022

The Brief: PM Rishi Sunak has asked UK businesses to think twice about excessive pay rewards to executives as restraint ensures they keep in mind the future of their workforce. Chancellor of the Exchequer Jeremy Hunt also supported the idea as this could curb inflation.

Why It Matters: Almost 2,000 company insolvencies were recorded last month in England and Wales, up by +38% year-on-year, according to the Insolvency Service. Although many of the insolvencies were made up of voluntary liquidations, compulsory liquidations multiplied 4x over last year.

Finanze Business Foresights: Boris Johnson drew flak back in June for resisting any hike in public pay to avoid further inflation. Earlier in the year, the Bank of England governor Andrew Bailey also called for restraint on 'wage-bargaining' processes, which was furiously opposed by unions. Today’s call for easing executive renumeration sets a different tone compared to Johnson’s letter to Sunak to relax restrictions on executive pay to make London more appealing post-Brexit. While we await the government’s decision on whether to impose more taxes on the wealthy, the Government must ensure that its redistributive economic policies do not deter executives from performing. Likewise, those who fail to do so could be barred from taking any bonuses to keep enterprises from becoming insolvent.


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