WEEKLY COMMENT 23-05-2013

WEEKLY COMMENT 23-05-2013

By Barry Edwards

There is definitely a more confident air amongst small and medium sized enterprises (SME’s) which is beginning to show through in two recent surveys taken in the last month and one more comprehensive EU wide report carried out last September.

The three surveys are shown above this comment in full and are archived in the right hand column under ‘SME surveys and reports’. They are:-

Quarterly Survey Results; Jan-March 2013, by The Manufacturing Advice Service (MAS) is funded by the Business, Innovations and Skills dept). “This information was taken from the Manufacturing Advisory Service National Barometer.” read more

WEEKLY COMMENT 16-05-2013

WEEKLY COMMENT 16-05-2013

By Barry Edwards

The Governor of the Bank of England, Sir Mervyn King, has given his final quarterly inflation report before he hands over to Mark Carney in July. He stated that the Monetary Policy Committee (MPC) were of the view that the UK economy has moved into a growth phase based on the positive news from the business sector although inflation will remain above the 2% target until mid-2015. They expect the UK economy to accelerate to a growth rate of 2% and hover around that level until the Euro zone recovers providing there are no further external shocks. read more

WEEKLY COMMENT 9-05-2013

WEEKLY COMMENT 9-05-2013

By Barry Edwards

Last Tuesday Nigel Lawson, the former Tory chancellor, released a statement saying that he believes it is time for the UK to quit the EU. He argues that the UK would be economically better off outside the EU and although there would be some cost to leaving the EU, it would be outweighed by not having to pay for the ‘bureaucratic monstrosity’ of the 27 nation bloc.

He said the UK pays both directly in an annual contribution of £8 billion and indirectly through the price of obeying complex regulations. He believes leaving the EU would encourage British business to look beyond the single market to the emerging economies, particularly in Asia. read more

WEEKLY COMMENT 2-05-2013

WEEKLY COMMENT 2-05-2013

By Barry Edwards

This week has been dominated by the European Central Bank (ECB) reducing interest rates by 0.25 to 0.5% and George Osborne, The Chancellor of the Exchequer, asking the Bank of England to stimulate growth in the economy in any way it can having extended the remit for the Monetary Policy Committee (MPC).

Mario Draghi, the President of the ECB and George Osborne both stressed that all effort should be made to help small and medium sized businesses (SME’s) wherever possible. The president of the ECB announced that they would like to see the market in Asset Backed Securities (ABS) revived to specifically help SME’s in southern Europe and have been talking with the European Commission (EC) and the European Investment Bank (EIB) about various ways to make that happen. read more

WEEKLY COMMENT 25-04-2013

WEEKLY COMMENT 25-04-2013

By Barry Edwards

The Chancellor of the Exchequer, George Osborne announced yesterday the extension of the ‘Funding for lending Scheme’ which is administered by the Bank of England. You can read the full statement in the link below.

http://www.hm-treasury.gov.uk/press_43_13.htm

If you are not familiar with this scheme, it is designed to encourage banks to lend to businesses, especially the small and medium sized enterprises (SME’s) and to households. Yesterday’s announcement was to improve the incentive to lend to SME’s and non-banks that provide factoring, invoice discounting and leasing. It also specifically included the buy-to-let market which has struggled to access finance in these troubled times. read more

WEEKLY COMMENT 18-04-2013

WEEKLY COMMENT 18-04-2013

By Barry Edwards

The gold price has been moving about a lot in the last week, mostly downwards. Since the high on the 4th of October 2012 of $1794.8 a troy ounce it has fallen to $1323 on the 16th of April, last Monday. It is currently $1388 and seems to be settling around this price for the moment.

At today’s price that is a fall of 22.8%; gold is different from other commodities because it is also used as money by many people who have no faith in currencies as a means of wealth. The price also moves because of people’s perception of the global economy. Consequently, since the financial crisis the price has risen to its high in October last year falling to today’s level as the world is slowly recovering from the recession. read more

WEEKLY COMMENT 11-04-2013

WEEKLY COMMENT 11-04-2013

By Barry Edwards

The demise of Margaret Thatcher has dominated the media this week attracting a wide range of comment some of which is not justified. My own view is that she helped to heal a very sick country and allowed its entrepreneurial flair to flourish once again.

The remedies she carried through parliament were very necessary and have been copied worldwide. If she had not imposed the cure another government would have been forced to do what she achieved because the economy would have collapsed under the weight of trade union revolt and government ownership of major industries and utilities. read more

WEEKLY COMMENT 4-04-2013

WEEKLY COMMENT 4-04-2013

By Barry Edwards

There isn’t any specific event this week that has been the centre of attention and therefore I would like to comment on the aftermath of the Cyprus bail-out. Like all these financial disasters, it always appears to be far more serious than the actual outcome when the impact has had a chance to be reflected upon and absorbed.

The consequences that were predicted by some commentators a week ago have not materialised and the markets are recovering from the event without any dramatic sell off. Even the withdrawal of deposits elsewhere in The EU has not yet happened which was a big concern for the politicians. In fact, the upward trend of the major stock markets has hardly been affected and most participants are looking back on the Cyprus story as a blip which will be the seed of change for the better in Europe, even though many do not think it was handled very well by the Eurogroup. read more

WEEKLY COMMENT 28-03-2013

WEEKLY COMMENT 28-03-2013

By Barry Edwards

The continuing resolution to the Cyprus problem has dominated the headlines. The final proposal was accepted by the government on Monday which was an improvement on the original plan. The Eurogroup is the EU organisation doing the negotiating in conjunction with the IMF, if you haven’t seen the statement they issued you can read it by right clicking on the link below and clicking on ‘open hyperlink’. It is a page and a half long.

http://www.eurozone.europa.eu/newsroom/news/2013/03/eg-statement-cyprus-25-03-13/ read more

WEEKLY COMMENT 21-03-2013

WEEKLY COMMENT 21-03-2013

By Barry Edwards

There are two major events this week; the UK budget announcement and Cyprus.

The budget was very low key in new content since most of the policy changes have been announced previously. The main points that will help business in the official statement that I could find are:-

  • Help to Buy: mortgage guarantee – The Government will create the Help to Buy mortgage guarantee to increase the availability of mortgages for those with small deposits across the UK.
  • Help to Buy: equity loan – From 1 April 2013 Help to Buy: equity loan will be opened up to all those who aspire to own a new build home. The Government will: provide an equity loan worth up to 20 per cent of the value of a new build home, repayable once the home is sold; significantly widen the eligibility criteria for shared equity to ensure as many people as possible are able to benefit. The maximum home value will be £600,000 and there will be no income cap constraint; and ensure that the scheme is open not only to first time buyers but also to all those looking to move up the housing ladder.
  • Corporation tax: main rate – The Government will reduce the main rate of corporation tax to 21 per cent from April 2014, as announced at Autumn Statement 2012. (Finance Bill 2013) Budget 2013 announces an additional 1 percentage point reduction to 20 per cent from April 2015. (Finance Bill 2013) (a) (26).
  • National Insurance: £2,000 Employment Allowance – The Government will introduce an allowance of £2,000 per year for all businesses and charities to be offset against their employer NICs bill from April 2014. (25).
  • Business Bank – The Government will publish the Business Bank’s first business strategy on 22 March 2013. This will set out an accelerated timetable for how the Business Bank will deploy £1 billion of new capital to improve existing access to small and medium-sized enterprise (SME) support schemes and develop a lasting new institution by the end of 2014 that will expand and diversify UK finance markets so that they serve the needs of SMEs.

There are a lot of small changes to many already announced policies either increasing the amount of money available or changing the eligibility. You can see the official statement by right clicking on the link below and clicking on ‘open hyperlink’ or follow the instructions you see:- read more

WEEKLY COMMENT 14-03-2013

WEEKLY COMMENT 14-03-2013

By Barry Edwards

There have recently been two reports concerning manufacturing in the UK and the USA as well as another one about research in the UK which I thought worth commenting upon since it is a subject that is often discussed by business colleagues with whom I associate. Unfortunately, there does not seem to be much interest from the media outside the financial press which is why I am making it the feature of this week’s comment.

The three reports are:- read more

WEEKLY COMMENT 7-03-2013

WEEKLY COMMENT 7-03-2013

By Barry Edwards

You will probably have seen a lot of mention about the USA budget control referred to as ‘The Sequester’ in the last week. This actually came into effect on the 1st of March without much comment from the general media in the UK. Amazingly, the only reaction has been that the American Dow Jones index and the British FT 100 index reached new record highs on Tuesday.

Before I comment any further, it is best to explain what it is all about and the following was taken from ‘Wikipedia’ since it gives all the basic facts without going on too much. If you know what it is all about skip the next four paragraphs in italics. read more