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The latest Bank of England Inflation Report  has altered Bank of England Governor Mark Carney’s Interest Rate Policy since the first Report (August 2013).

Now, reflecting the falling unemployment and economic recovery, policy will be determined by a wider range of indicators other than the previous indicator of unemployment falling to 7% or below. The report says the ‘Bank Rate may need to remain at low levels for some time to come’ and considers ‘economic slack’ being ‘substantially reduced’, in taking a gradual approach to rate increases.  ‘When Bank Rate does begin to rise, the appropriate path so as to eliminate slack over the next two to three years and keep inflation close to the target is expected to be gradual’.  Sterling rose to an almost 3 year high  following the central banks forward guidance.

Although, with the ONS (Office of National Statistics) using some B of E Data, it will be interesting to see how they interpret the effects of the recent floods in their measurements: moving from Cornwall into the Thames Valley, M4 and M3 corridor. Mark Carney has said  although the floods would influence the short-term outlook, there was unlikely to be any effect on overall growth – currently forecast at 3.4 per cent this year.

Will the UK still be seen as being in a bad but improving place?

Image and Article credit: SUF Copyright 2014 ©

The Gatekeepers of Your Business (Part One)

Any sized business can make a big promise happen by delivering the value proposition, specific to that business, when its committed to and supported by the right gatekeepers – from an answerphone holding the fort, to a line of line managers sitting in waiting.

With stiff competition for products (and services) big promises consequently bring big asks from customers. More than ever before, consumers have control over what they’re willing to spend. Additionally, loss aversion has them buying accordingly which means that providing a value proposition needs to be about more than price.Lego

Giant corporations are big on value proposition rhetoric: L’Oreal changed ‘Because I’m worth it’  to  ‘you’re worth it’, and currently its ‘we’re worth it’;  their team of marketers (probably sat at Lego-laden tables dotted with bowls of jelly beans) worked until inspiration struck, they recognised the brand’s value was as important to the customer as valuing their customers. Providing they’ve followed through with appropriate gatekeepers – they’ve cracked it.

On more familiar territory:  Lloyds Banking Group’s ‘You First’ changed to ‘For the Journey’. Presumably etiquette illustrated the customer being placed first, although with no clear objectives, identifying ‘first’, ‘for’ and ‘the journey’ made it hazy so, serving the people and businesses of Britain they’ve re-branded and re-focused their value proposition to ‘For the Moments that Matter’ – (a big claim considering their recent IT system failure).

As I understand it, ‘marketers’ general advice about value propositions is to stay away from money propositions (biggest savings, cut prices etc.), however, although RBS make no mention of money with their customer value proposition:  ‘Here for You’, imagining it next to the Restructuring and Recovery Division doors this is a value proposition with sufficient menacing tone it doesn’t need a gatekeeper, just re-name the department: Mission Impossible?  And with Barclays’ ‘Fluent in Finance – It’s our Business to Know Your Business’ – Scary… in a KGB way?  Santander: ‘Bank for Your Ideas’ – hazy or just vague?  Maybe re-thinking the money thing and firming up some ideas isn’t such a bad idea?

A value proposition is usually only put to the test when something goes wrong and when it goes wrong, if the gatekeepers’ aren’t managed…. who’s really bothered?

Re-arranging doesn’t change the formula – eleven plus two: when you rearrange the numbers is twelve plus one.

Next time: Part Two – The Gamekeepers of Your Business : When things went wrong…..

Image credit: Joshin Yamada, Phil Whitehouse  Article credit: Copyright SUF 2014 ©

New Rules
Home Mortgages
April sees the MMR  (Mortgage Market Review) come into force including waves of change around affordability rules. Those lenders who haven’t already implemented increased affordability checks will do so, as part of applicant stress testing and scrutiny.
Commercial Transactions
Claims made for tax relief on plant and fixtures within property using capital gains, will alter after 1 April 2014 where allowances have been included in a Fixed Value Requirement or Disposal Value Statement.
Finance Bill 2014
From draft legislation there will be changes to the taxation of partnerships and pension tax relief additionally, (not yet published) capital gains tax on the disposal of certain properties by non-residents.
Building Standards
NHBC Standards are changing rules relating to ventilation and heat recovery, fireplaces and chimneys, with design life of timber retaining walls being part of clarifying technical requirements.
London
LFB (London Fire Brigade) is to charge businesses £290 for call-outs if they attend more than 10 false alarms in a 12 month period in response to a vast amount of wasted time spent attending triggered automatic fire alarm systems.
(No connection to business or finance whatsoever) Simply Interesting for some
F1  will see V6 Turbo engines instead of the 2.4 litre V8s – engine recovery is going to the rear wheels where there will be harder compound tyres of lower nosed, heavier, single exhaust cars .

Image and Article credit: Copyright SUF 2014 ©

The Bank with a tagline: The Moments That Matter  experienced a technology ‘glitch’ (a description adopted for anything that has a wire attached, but doesn’t work) when a part of Lloyds Banking Group’s technology managed to disable some of their hundreds of thousands of customers from using debit cards and cash points over the weekend.

Apparently, two out of seven servers went down for TSB, Lloyds and Halifax customers who had cards declined in shops, and cash declined by the hole-in-the-wall.  The impact from underpinning technology problems goes beyond the Bank’s customers being let down (I’ve been there and it IS very disconcerting).

The effects ripple out into business,  with losses of sales and necessity of negotiating payment of ‘consumed’ products (i.e. petrol/meal out, etc) … out into the realms of confidence in the Bank … out, for some, even into the realms of  (for moments that matter) Customer Relationship Management .

Image and Article credit: Copyright SUF 2014 ©

With inflation falling to the Bank of England’s 2% target for the first time in four years and numbers from Bank of England Credit Conditions Survey (2013 Q4)  continuing an upward trend, the notion of  ‘positive’ outlook has (for some) been reinforced.

Could it be that Default Rates on lending to small businesses  being reported as ‘fallen significantly in Q4’,  with  medium-sized companies unchanged and large PNFC’s falling over the quarter,  was due to re-structuring of existing facilities being part of the reclassification for 2012?  Alongside a statement which shows spreads on corporate lending falling in Q4, with  ‘significant reductions’ for medium-sized companies and large PNFCs, and a slight reduction for small businesses’ it’s worthy to  question an attribution to re-structures into the figures behind the numbers.

Depending on the questions asked and the answers given some results are ‘not directly comparable’ therefore perhaps some statements are too narrow?  Maybe an insightful survey is one that focuses on the survey participants’ business attitude, their plans and strategy in achieving that objective. Would that offer a stronger perspective and wider field of vision into the UK economy or would it  tell us what’s happening in business rather than what’s happened?

Image credit: Pilot Theatre  Article credit: Copyright SUF 2014 ©

Pollex’s Up! Time Thief

Where is the human Pollex situated?

First day away from the office and, blessed crackers, I was exposed as a lazy thinker… I’d have to Google that one… I had no idea

Thinking takes practice  –  When it comes to cramming certain facts, I’ve never managed to hold the map of routes that circumnavigate burning midnight oil. Although even if I’d realised that higher intelligence (and by that I’m not referring to myself) isn’t insurance against the necessity of putting in practice, I’d still have skipped school in favour of seeing Bowie live. By the time I was a parent I hadn’t even given a thought to parenting needing practice so, as a naive parent, ‘kinaesthetic learner’  was welcomed as enthusiastically as child given a puppy for Christmas  and now, thanks to the Great God that is Google  we’re  all one click away from information overload …. and exposure to more lazy thinking.

Why bother problem solving by exploring ideas when there’s so much ‘knowledge’ readily available?  –  In business I’m sometimes as guilty as the next in giving out (accompanied by involuntarily inside mouth biting) ‘well… it depends’. The reason is (usually) simple: something is beyond my control; I have to surrender to an, in effect, legion of androgynous troopers, who waiting on the doorstep – ‘outside forces’.  For as frustrating as it can be (for all parties), I can’t always give a definitive black and white determination. But, just as I’ve experienced sufficient to realise that time is of the essence in business, I’ve also come to recognise, you’re going to have a hard time if a job isn’t done properly. Hence, I have a more frustrating time when a person emits (often with side of the mouth chew to infer they’re giving thought), ‘well… it depends’ as their camouflage for sitting on the fence – time wasting.

Ground control to Major Tom…   Can you hear me Major Tom?

Sometimes it does depend.

Without balanced thinking, pros and cons are useless  –  Take marketing  for example.  As each trend, strategy, plan, and measurement, expands, increases, decreases, the general shift  becomes, as with each element of a business’s evolution, more complex; especially when (like you and me) the customer factored in to the ROI is increasingly savvier in using online search for information, solutions and comparison. Then take what is now an elemental marketing platform, the website. Every business owner will have their own opinion about the notion that a business without a website is said to be non-existent. A website for some is easy entry into marketing, for others it can be too difficult to even consider, different perspectives, both derived from a ‘thinking’ process relevant to itself. However, the value judgement of ‘thinking’ resides in the overview, which is measured by considering the positive points of having a website and the negative points, or lesser positive. When something hasn’t been tried before, or experience tells of mistakes, messy experience, or similar, the ‘thinking’ balanced viewpoint might go along the lines of ‘it might be worthy of more information for further consideration’.Thumb

When thinking isn’t practiced surely it goes the way of any unpractised skill, meaning it can’t be put into operation from experience. Using the analogy of the well-practiced acrobat with an ability to rotate many hula hoops, all at once, quickly enough to make the hoops look as one – that’s what a Venn diagram of the scope of my service business’s crossovers would look like (elements overlapping one another, plus elements overlapping with other service businesses) –  just as other business owners’ Venns will have overlaps for how and what they operate. I don’t know about you, but for me it’s difficult to want to only direct my attention to the interesting bits of my business. The way I try to manage this tendency (and maintain direction) is to think about the decisions I have to make …. and make those decisions. And, as I don’t like to limit my thinking, the information I need mustn’t be limited or biased….

Thumb2 The point is, it’s not only the information that’s important. We all want a derivative black and white determination AND at the same time choice, alternatives to consider. The route of least resistance means that we don’t get distracted, decisions can be made quickly, time won’t run away further than it already has. Searching amongst constraints to find hidden, unobvious, possibility and informed decision making takes thinking about (time) which (as the inside of my cheek will attest), on the occasions of forces being beyond my control, can be frustrating – But as, in my experience, confident responses aren’t guarantee of certainty. Saying ‘well…. it depends’ can, depending on where you sit, be fence-sitting or thinking beyond the most likely.

 “You ask yourself not if this or that is expedient, but if it is right”  – Alan Paton

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Image credits: Celestine ChuaKevin KMarc DalmulderJin.

Article credit: Copyright SUF  2014©

The month of predictions is here… so while we get down to business…. here’s a roundup of what’s being said…

Image and Article credit: Copyright SUF 2014 ©

The Banking Reform Act, ring fencing retail and investment banking, and implementing recommendations of the Parliamentary Commission on Banking standard (including criminal offences for senior bankers misconduct), has become law.

As is said, this is just the beginning.

Although, ring-fenced banks will not be able to hold or own the capital of other non ring-fenced banks etc., it won’t be fully in force for another four years during which a new authorisation process for staff will be introduced and effectiveness reviewed.

And, a banking union plan has been agreed for managing Eurozone banks (UK plus 10 other countries are not part of the plan). The ECB (European Central Bank) has been put in charge of European Union regulation rules for banks in the Eurozone

Image credit: WetWebWork  Article credit: Copyright SUF © 2013


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