Following the result of the UK election, with the Conservatives surprisingly gaining an overall majority, the continuing austerity driven economic recovery should be possible. However should the excessive debt and borrowing figures not be eliminated, a failure from the Government’s first term in office, then the voters in 2020 will react accordingly. Other factors surrounding welfare spending, housing and net immigration will also be measured by the electorate.
Businesses have been wavering over the first few months of 2015, with the uncertainties of the election outcome, in putting into place their strategies and implementation activities. Now there is a clear result, and assuming the March budget announcements are implemented, there are significant opportunities for companies to consolidate their recovery and grow their businesses both organically and by acquisition. Outstanding matters on business rate reviews, borrowing and the impact of a potential vote on Europe will provide food for thought over the near to mid-term, but leveraging the strength and potential of SME’s is essential in the improvement of the economy.
Immediate senior management resource issues could play a part in SME’s not being to exploit their growth strategies and a solution is the use of a commercially focused independent executive on an interim basis.
MW Interim Finance can assist you in compiling or reviewing your business / risk plan in key commercial areas of your business, in addition to providing an independent CFO/FD resource on an interim basis. For further information or a confidential discussion about your specific requirements, please contact Martin Walby FCMA CGMA on + 44 (0) 7876 566875 or email firstname.lastname@example.org
Unemployment in the UK increased by 35,000 in the three months to October to 2.5 million, the Office for National Statistics (ONS) has said. It is the first time that the jobless measure has risen for six months however 33,000 of the increase was in the public sector, raising the overall unemployment rate up to 7.9%. It has been assumed that the private sector will mitigate many, if not all, of all current and future losses now resulting from the full impact of public sector cuts………..but with UK retailers suffering, VAT rising in January and businesses holding on to cash rather than investing there is a fragility to the economic recovery.
Millions of families are struggling to pay their bills — and the number is likely to increase in the new year, according to analysis from the Bank of England. The report published this week shows that two fifths of households have difficulty from time to time or constantly in meeting their monthly bills, compared with a third last year, and more than half regard their overdrafts or credit cards as a burden.
More than three years after the start of the credit crunch, the Bank of England warns today that a lack of available credit “continues to be one of the main factors holding back the economic recovery” and repeat warnings about the size and concentration of Britain’s banking sector.
The Bank of England is forcing high street lenders to repay £185 bn of emergency loans in an attempt to avert a new market meltdown next year. Bank officials have recently held meetings with four major banking groups and the biggest building societies demanding that the loans, which were handed out at the peak of the financial crisis, be paid back sooner than planned. Analysts warn that the tough line could stop banks lending to small businesses and slow down Britain’s economic recovery.
The messages therefore for a UK economic recovery are not looking good for 2011.
The Bank of England kept interest rates at a record low of 0.5% for the 12th consecutive month on Thursday, a decision widely expected as any rise in the cost of borrowing could damage the UK’s fragile economic recovery. The bank has not pumped any more money into the economy under its quantitative easing (QE) but may have to restart its asset-buying programme, (QE), if the economic outlook deteriorates, but many analysts are predicting monetary tightening later this year. It appears that the “tensions that underlay the build-up of large world imbalances have not been resolved” and the UK’s largest export market, the euro zone economy, has stalled.
Despite the upward revision to GDP in the fourth quarter of last year, to 0.3% from an estimate of 0.1%, the economy remains weak. Businesses are still under serious pressure and the threat of a double-dip recession is more serious in the near future than risks of higher inflation.
The pound took a pounding last week and suffered its biggest one-day fall for more than a year amid the prospect of a hung Parliament, after the election mooted to be in early May this year. There are fears that this will prevent swift and decisive action being taken over Britain’s public finances. Sterling fell to under $1.50 for the first time in ten months and today closed at $1.51. Against the Euro it is only €1.11 and has remained at this level for some time, despite debt issues in Greece and Portugal putting pressure on the Euro.