Tag Archives: consumer confidence

What goes around comes around…..

The UK appears to be showing the signs of a possible second recessionary phase with a retail malaise and consumer confidence shaky at best. Consistently high fuel price rises, increases in utility costs around the corner and food inflation forcing households to review their weekly spend. Interest rates’ remaining static has become the “norm” over the last year or so but this will not continue. Is the “double dip” going to become a reality?

 The prognosis on growth has been reduced by both the Government and the IMF and with companies regularly going into administration, and continued cut-backs by businesses, it would appear that the Japanese stagflation model may be mirrored in the UK over the next few years.

It is not all doom and gloom with a number of businesses becoming more focused and streamlined with even some growth opportunities being exploited. Many businesses who have survived through the prolonged downturn are now looking ahead to the future.

Utilising an independent business resource is one way of stimulating a business to review, plan and invest for an economic upturn and to maximise potential opportunities. MW Interim Finance provides independent professional finance support to assist is implementing achieve your strategic and operational objectives.  Visit www.mwinterimfinance.co.uk for further details.

UK base rates, inflation and unemployment – same old story but with worsening figures

Interest rates remain at 0.5% in the UK, but for how much longer as record monthly leaps in food and transport costs raised the consumer prices index (CPI) to 3.7% in December 2010, (up from 3.3% in November), according to the Office for National Statistics. Continued high level rises in food and fuel prices could send the inflation rate to 5% by the autumn, economists warned.

There is some suggestion that interest rates will have to rise to mitigate inflationary pressures however, pushing up interest rates may be a welcome relief for net savers but it is likely to have a greater adverse impact on those with mortgages and other borrowings.

The housing market is already falling back from the small gains during the last twelve months and, with an increasing level of job losses in 2011 possible, (currently at just under 2.5 million or 7.9%), any consumer confidence could be wiped out and the UK could slip into another economic downturn or consistent low growth period for the foreseeable future.