There appear to be differing opinions if leaks and statements from the IMF and Bank of England are to be believed.
What appears obvious is that economic activity is stuttering and any growth is at best feeble if not anaemic. Economists are looking for clear signs of improvement where there are none and so are hence clutching at straws.
For all of its talk of austerity the UK government has failed to make any significant cuts to spending in real terms and because of falling tax revenues those it has achieved have failed to have any impact upon the deficit.
In common with most of the developed world the UK economy is over-borrowed and continuing to run a deficit. Any hopes that an increase in economic activity would stem the tide are looking increasingly unlikely.
Austerity timetables need to be lengthened yet again to allow conditions to improve. In reality this will probably mean years of minimal benefit increases and little likelihood of governmental economic stimulation.
What will kick-start economic growth? Answers on postcards please!
There appear to be differing opinions if leaks and statements from the IMF and Bank of England are to be believed.
The economy needs lubricating
Look down many high streets in the country and what do you see, gloom, dreariness, rundown shops and a lack of real customers.
The reason for this is partly due to the recession but also to a change in the shopping habits of people. Everybody now wants the cheapest product on the market, irrespective of whether it is any good or of the quality, purchasing is now down to price.
This has been brought on by the throw away age that we now live in. I can remember when my mother’s vacuum cleaner stopped working (a Hoover); the screams and wails at the cost of a replacement being at least 2 weeks of my father’s take home pay, hence we had it repaired. Now if an appliance stops working it is left on the drive to be collected by a modern day Steptoe in a white van while we go down to the local trading estate to view a replacement which we then purchase on line because it costs less. (more…)
To succeed companies must grow their business – tell the accountants!
Looking at the recent results announcements it is clear that companies are still focused on cutting costs in order to maintain profits rather than making any effort to grow the business.
With the accountants in charge the emphasis will always be on costs as these are measurable real figures but there will never be any consideration of the impact of say a lack of investment or failure to grow the business.
Without growth any business is a dead duck, you cannot expect to keep earning as you will either lose market share to your competitors or lose customers through natural wastage so all this focus on costs is rather self-defeating. (more…)
The buck stops here
It seems we live in a society where everyone wishes to pass the buck on to someone else for anything that goes wrong, so that no one takes the blame or is responsible for their actions; yet if by some mischance it goes right then the same potential buck passers love to sit back and accept the adulation and fame for their actions.
My local sports club (Virgin Active) have recently employed an outside company to maintain their car park; new signs have sprung up like bracket fungus informing people where to park and the penalties for parking incorrectly. Something that I have to say has been made necessary due to inconsiderate motorists parking on the central islands blocking the exit routes, parking in mother and child bays and disabled bays when not disabled and leaving their car there all day while they go to work.
Have the signs or the parking company made a difference? NO. The same inconsiderate people still carry on regardless. When I queried this the response was “we have hired an outside company to manage the car park now” in other words the buck has passed, the problem is still there, the company is paying the outside company to do work that is not being done; but the management can say “we have done what we could by hiring professionals”.
We see the same in many other industries where there is a difficult or controversial decision to be made the management decide to hire outside consultants to carry out the work, normally starting at a low cost that gradually increases until it reaches a barely sustainable level; but by then the expertise within the company has left or been lost thus ensuring the continued use of outside consultants.
The problem in using outside consultants is that when they tender for the business the top person or expert visits you, but the consultant assigned to the actual job tends to be a junior who has read up on your business and possibly has a degree in your business, but rarely has any hands on practical experience of actually working in your business. Yet management are happy with this. Why? Because they can blame someone else if it all goes wrong, they can pass the buck with a clear conscience.
If we compare this attitude regarding internal versus external experience between the UK, Europe and the US it appears to be handled very differently. Enter any office in the US or Europe and you will see employees of every age group all contributing their experiences and knowledge to the wellbeing of the company; however in the UK (especially in finance) the employees are considerably younger, creating an operational risk in how to handle a disaster thus leaving the company very vulnerable.
Some smaller banks in the UK value age and experience and tend to employ career bankers to carry out the daily duties and risk management, because they know that when something does go wrong is when real experience counts to save the day, thus leaving the bank less exposed and giving the directors a sense of genuine security knowing their bank is in good hands and that the experienced staff will stop the buck from travelling too far.
We have a good number of very experienced professional bankers who are all willing to pass on their knowledge and experience to bank employees of all levels, experience that you can never get from reading a book or talking to outside consultants.
Want to know more and see if we can help then call us.
Social networking & Networking
A lot of people do not realise that there is a huge difference between social networking and networking; by not understanding these differences you may be storing up trouble for your future career prospects.
Social networking is exactly what it says; you are using it to communicate between friends and family or even to try and make a “splash” out there in cyber land; nothing wrong with doing this as long as you are not doing it under your own name or using your work email address. Take a look on Facebook or Twitter to see how many people are using a works email address, you will be surprised.
Should you feel inclined to let off steam about a news item with a comment that could be taken the wrong way then have the common sense to make sure you are anonymous. If you are using a social networking site then be careful what you post and the type of pictures that you put up. Potential employers do look at Facebook and Twitter to check up on you, so a photo of you in a naked drunken pose is not going to enhance your career prospects. (more…)
The world appears to be awash with acronyms, every company and department seems to be adopting them and sowing seeds of confusion. I wonder how many mistakes arise from misunderstandings and mistypes?
To the uninitiated, those who may be new or unaware there is a dilemma. Admit you have no idea what they are talking about and show your ignorance or stay tight-lipped and hope you can begin to understand as the conversation continues. It must be hell when you join a new company!
The problem is that the brain has difficulty in keeping up when it needs to compute the translation of the acronym and continue to make sense of the meaning of a conversation (or is that just a male problem?)
Personally I quickly lose the will to live when acronyms start to be banded about and I wonder what damage might be done to established trade names when they choose to be known by acronym rather than their full name. The potential confusion can result in customers being lost.
Type almost any acronym into a search engine and see what a vast array of similar sequences of letters there are. To the uninitiated it is a potential minefield but there is a very real risk in becoming too fixated.
So next time you are tempted to adopt and converse in acronyms perhaps it would be wise to ensure that the other party understands otherwise you have no more chance of making yourself understood than a geek talking technobabble to a layman.
More pertinently remember to be careful when using acronyms in a CV, the reader might have no idea what they mean and you may be passed over for interview through ignorance.
“une nation de boutiquiers“
A phrase ascribed to Napoleon about the British, for those of you who have forgotten your French “a nation of shopkeepers”. The phrase was not disparaging but said to describe how Britain had built up its empire and wealth; so maybe not the best title for this article.
There is no doubt that the traditional UK High Street is in decline, with some towns suffering more than others. We have heard politicians of all parties together with various consultants and gurus spouting on about how we can improve the local shopping area; yet listening to them I am convinced that none of them have done any shopping in a High Street for years, if ever.
Ed Miliband has proposed that Town Halls should be allowed to block unwanted businesses from opening up in the High Street and that local people should have a say in what type of shops should be permitted to trade. In a perfect world this sounds really good, but if you scrape of the veneer of political one-upmanship you can see that the idea is unworkable. (more…)
We keep being told that we might be entering a triple-dip recession, the economy is flat-lining, output is down or bad weather is to blame. Economists seem obsessed with how bad it might get.
The truth is that the economy is stumbling along since 2008 affected by a multitude of factors depending upon the industry and their particular customer base. All sorts of reasons are given but I think most will agree that what we are experiencing is a sort of hangover from the excesses of the decade before 2008 when a combination of easy money and reducing prices succoured consumers into an unaffordable luxury lifestyle.
It is really no surprise that consumers have reined in their spending and are concentrating on paying down their debts, re-mortgaging to pay for holidays and other luxuries was never going to be sustainable.
Those reliant upon benefits are affected too with the new caps being imposed and minimal increases in real terms. It may come as a nasty shock to those who have had incomes way above what they might have received from work alone.
Retailers will bemoan the lack of cash in customers’ pockets but they should have made some contingency for poor trading conditions. Most that have gone bust have been broken by diminished demand combined with disproportionate rents and debt servicing costs, and that is at a time of historic low interest rates!
The one thing that is clearly lacking is confidence. A few optimists may be bucking the trend but most companies are taking a “wait and see” attitude, investment is curtailed and opportunities that do present themselves may be spurned. We risk getting left behind other economies who take a more optimistic view.
It is acknowledged that the UK manufacturing industry has long been neglected and our over reliance on financial services has proven to be costly to the treasury. We do need to encourage manufacture and export of real goods, not just services but the cost of doing business in the UK is just too high for us to be competitive.
The economy can only really be brought back to health through a cutting of taxes on both individuals and companies. Individuals will have more disposable income and companies will have a less disproportionate fixed cost burden. The difficulty is where to find the money.
Last month Government figures gave the number of people in work as 29.73 million, the highest ever level, but is this figure really representative?
I ask because it transpires that the number of workers on so called “zero hours” contracts increased by nearly 100,000 last year, a fourfold increase since 2005.
If these people are included in the employment figures but have no regular hours or pay, then there must be an element of double counting going on. That is without taking into account the fact that more people than ever before have more than one job because they cannot find a full-time role and have to make ends meet.
The jobs market in the UK has changed with the permanent full-time job becoming a thing of the past, 90% of advertised roles are now for other than permanent roles. As a result employees have little security of tenure and reward this with minimal loyalty to the company and a lack of willingness.
The double counting might be why economists are so confused by the resilience of the UK labour market.
Send the kids out to work
It appears that children who take on part time jobs, like paper rounds, have better money sense and awareness than those that rely on bank of mum and dad.
Surely this is obvious to anyone that did a paper round or other job when they were at school; like many adults I did a paper round from the age of 11 (I know I should have been 13 but the shop keeper didn’t care) until 16, I helped the local milk man during the school holidays and from 14 I worked in Woolworths on a Saturday; nothing unusual for any of the kids at the time. (more…)