Banking & Finance

Manufacturing output rises 0.3%

editor — Wed, 08 Sep 2010 11:39:43 +0100

UK manufacturing output increased by 0.3% in July from the previous month, according to figures released from the Office for National Statistics. The rise means that the year so far has seen an increase of 4.9% - the best annual gain since 1994 Industrial output rose 0.3% in July, recovering from a 0.5% in June, and taking the annual rate to 1.9%. "It's encouraging and we think the outlook for manufacturing remains on the positive side, not just on general recovery grounds but possibly also on reasonable export prospects," said Philip Shaw, an analyst at Investec.

Retail sales increase

editor — Tue, 07 Sep 2010 10:24:41 +0100

Retail sales increased in August compared with the same month a year ago, according to figures released by the British Retail Consortium (BRC). Like-for-like sales rose by 1% and on a total sales basis, sales rose by 2.8% compared with a year ago. Strong sales of school uniforms as children return to schools following the summer break has been attributed to the rise which has also been helped by last year’s weak figures. The BRC warned that consumers are still wary of purchasing expensive items due to uncertainty over government cutbacks. "Back-to-to school wear and the onset of autumn helped clothing and shoes produce a small overall improvement in non-food sales," said Stephen Robertson, director general of the BRC. “But with the government about to detail its cuts and a VAT rise in prospect, retailers will be hoping consumer confidence doesn't slip over the next few months."

Consumer confidence rises

editor — Tue, 31 Aug 2010 10:32:14 +0100

Consumer confidence in the UK economy improved in August for the first time in five months, according to the GfK NOP Consumer Confidence Index. Consumer confidence increased by four points in August - the first time since February that confidence has risen. August saw increases for confidence in consumers personal financial situation over the last 12 months and confidence in the general economy in the next 12 months. "Overall consumer confidence has been in constant decline for the last five months and a further fall would have made a double-dip recession seem a very real prospect. The government will undoubtedly read these figures with a great deal of relief," said Nick Moon, MD of GfK NOP Social Research. "The single biggest improvement has been in confidence in the economy over the next 12 months and this looks particularly encouraging on first sight. However, this gain merely reverses a similarly large drop in July and in reality confidence in the economy's future prospects remains below its June level and similar to May 2009 when we were still in the grips of a recession."

Small firms hit by late payments

editor — Tue, 24 Aug 2010 15:08:46 +0100

Small and medium-sized businesses are more likely to accept excuses from late paying customers now than before the recession, according to data collated by positivecollections.co.uk. The data reveals that 74% of small firms are accepting late payment excuses and 10% of companies avoid chasing debts in the first place as they are worried about losing future business or simply feel too uncomfortable about broaching the subject. Just under 20% of respondents stated that they believe that chasing debts would be too expensive due to legal fees. "Interestingly there seems to be a clear trend towards delayed payments which has been made more prevalent since the recession took hold. The fact that so many businesses in the UK have become accepting of this ‘late payment culture' is certainly a cause for concern as this has implications on the whole business community and economy," said David Green, CEO of positivecollections.co.uk.

Business confidence falters

editor — Tue, 24 Aug 2010 13:09:40 +0100

Business confidence has declined in the third quarter of this year, according to the latest ICAEW/Grant Thornton UK Business Confidence Monitor (BCM). The BCM has declined from the second quarter of this year 2010, falling from +25.5 to +21.5, a drop of four points. Nearly a fifth of companies are now less confident about the coming year - up from 14% that stated this in the first three months of 2010. However, the monitor also revealed that turnover and profit growth returned to positive territory for the first time since the start of 2009. Businesses expect to increase prices by only 0.9% in the next twelve months which points to limited inflationary pressures and no need for interest rate rises for some time. "UK businesses that came through the recession are now facing the challenge of surviving the recovery. They still don't know what the future holds and are uncertain about how the mood of fiscal austerity will impact the economic recovery," said Michael Izza, CEO of ICAEW. "The government needs to deliver on its commitment to ensure Britain is open for business while taking the tough decisions required to tackle the deficit."

Think tank: inflation could hit 8%

editor — Mon, 23 Aug 2010 11:56:10 +0100

Interest rates may have to rise to 8% to combat rampant inflation, according to an influential think tank. The Policy Exchange believe that a double-dip recession is likely. This would be followed by an economic boom, which the government would need to respond to by printing mote money. This, coupled with the planned deep government spending cuts, would lead to the fastest economic growth rate since the late 1980s. "Once the economy gets growing sustainably, there will be a huge expansion in the money supply, which will lead to inflation. Once inflation rises, interest rates will rise rapidly as well. Since interest rate rises will raise mortgage rates, the initial effect will be even more inflation," said Doctor Lilico of the Policy Exchange. Inflation has been at a historic low of 0.5% for the past 16 months and at the last meeting of the Bank of England's Monetary Policy Committee only one member suggested a rise in rates to 0.75%.

Cost of bank lending rises again

editor — Mon, 23 Aug 2010 11:15:24 +0100

Many small firms are unable to borrow from banks due to their restrictive lending criteria

Trust in businesses ‘deteriorating’

editor — Mon, 23 Aug 2010 09:48:42 +0100

The level of trust between business managers and staff has been seriously damaged by the difficult economic climate, according to research by Ceridian. The survey of over a 1,000 employees revealed that a quarter of respondents felt that the level of trust they have in their manager has deteriorated and 20% are less engaged in their job than previously. "As a key factor in employee motivation and engagement, trust between employees and their managers is crucial. If employees' trust in their managers continues to deteriorate, businesses could become weaker because of the knock on effect to productivity and engagement," said Steve Joyce, head of marketing at Ceridian.

Public sector borrowing falls

editor — Thu, 19 Aug 2010 14:55:42 +0100

Public sector borrowing declined in July to £3.8bn, according to the Office for National Statistics (ONS). This figure is a vast improvement on the £6.1bn borrowed in July last year and brings the total so far this financial year to £44.9bn, below last year's £47.5bn. The forecast for borrowing for 2010-11 is £149bn, down from the £155bn borrowed in 2009-10. "While these figures show an improvement compared to a year ago, they also highlight the UK's massive deficit and the major challenge in restoring stability to the public finances," said David Kern, chief economist at the British Chambers of Commerce. "British businesses understand that painful measures will be needed to reduce the country's unsustainable deficit and support the government's focus on spending cuts rather than tax rises. But, the task of reducing the deficit will only be successful if the austerity measures are supplemented by a positive programme aimed at ensuring businesses can grow, invest and create jobs."

Retail sales rise 1.1%

editor — Thu, 19 Aug 2010 12:05:03 +0100

Retail sales rose by 1.1% in July compared with June, according to Office for National Statistics (ONS). This is the highest month-on-month increase since February and significantly better than had been expected, with analysts only forecasting a rise of 0.4%. "The figures provide an early indication that economic growth will remain in positive territory during the third quarter of the year," said David Kern, chief economist at the BCC. "However, there is no room for complacency. The full impact of the emergency Budget's austerity measures is yet to take effect."