Blog Archive

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Phase Two of Help-To-Buy (HTB), in which taxpayers guarantee up to 15% of a new mortgage, means that Applications will now be allowed from early October. However, lenders will not be able to buy guarantees for the mortgages they offer until January 1, 2014.  Lenders will be able to start writing loans but it’s still unclear when they can advertise their deals, how much it will cost them to take up the mortgage guarantee or if they will be 80% mortgages – crucial factors in cost for the borrower.

The UK economy is currently growing at the fastest pace since the financial crisis and is set to be maintained in Q4; Q3 GDP figures are due out in October.

Despite Interest Rates staying the same, thousands of landlords are facing a rise on their Tracker mortgages with the West Bromwich Building Society’s former specialist arm,  West Bromwich Mortgage Company.  The rise in December is similar to that of the Bank of Ireland (BOI) whose customers face a further rate rise in October, from 1.35% (o.5% base, plus 0.85% margin) to 3.99%.

Finally, October will see Royal Mail privatised, with orders for far more than the entire number of shares being offered already made well before  the 8 October deadline. The float (11 October) is being handled by City firms and banks including UBS, Goldman Sachs, Barclays, Merrill Lynch, Investec, Nomura, RBS Europe.

Image and Article credit: Copyright SUF 2013 ©


Just like children, businesses need stimulation.

They can’t run themselves or improve themselves but, with the right encouragement, businesses, the same as a child, will respond and with the right type of attention, they’ll produce results.

In the Government report Growing Your Business  - A Guide For Small Firms, Lord Young talking about micro firms’ potential, notes “in the last recession in the early nineties, small firms were in debt for over four years”.   Now, five years since the banking crisis,  a time during which, some small firms have had  ‘money in the bank’  and  ‘large corporates are sitting on over £720 billion’,  confidence in some area sectors of business remains elusive.

A link between unstable or chaotic environments and the effect of disruption is increasingly being explored as an effect on children, and showing as a negative impact. And, there is a necessity for children to have an opportunity to learn through play, say some education ‘experts’;  they shouldn’t start school until ‘age six or seven’,  allowing time before adding, in effect, ‘chaos’ to natural development.

Chaos breeds uncertainty; it’s consistency that tames chaos and calms things down.

Image credit:   Randy Heinitz   Article credit: Copyright SUF 2013 ©

Business As Normal…

Small firms are on the whole still feeling austerity chomping at their heels from which many are facing heavy additional burdens. Consequently, doing the bare minimum to get the job done means ‘right’ or ‘wrong’ decisions aren’t always considered, and we’re seeing a distinctive two-camp pattern of  those who acknowledge that changes continually happen, therefore they have or are prepared to adapt….. and, those who prefer to put their head in the sand.

Notice any parallels with the endless financial headlines?

For example,  LIBOR (London Interbank Offered Rate), the wholesale market interest rate for lending between lenders (banks), once perceived as a reliable benchmark, was recently subject to claims of manipulation.  Did it  adapt or put its head in the sand?  Whichever, it’s now being forced to look at change.

Base Rate has current ‘forward guidance’  giving that, providing unemployment remains above 7%, interest rates will not go above the four year static 0.5%. When the MPC (Monetary Policy Committee) make their decisions for setting the Base Rate (BoEBR) to meet inflation rate targets, the  objective, based on variables, is to maintain price stability whilst supporting the Chancellor’s objective – In essence  to strike a  balance between keeping inflation down, yet not pushing up interest rates higher than would be healthy for  inflationary pressure. Theoretically, interest rates could stay at the norm 0.5% for the next few years. Dependent on how they are interpreted, dependant on which numbers are used, the shift around could be viewed as ignoring the facts or being ‘forced’ into change.

This Interest rate, for short term money lending by the Bank of England to commercial financial institutions, (who in turn set their own interest rates for their borrowers and savers), was changed between 1997 and 2005 on 30 occasions  -  26 came in the form of quarter-point changes in either direction, and the rest were half-point changes -  from 1971 to 2013, the average rate of interest was 8.19%…. and, with a potential forced change for mortgage lenders, (consequence of EU rulings); which could have mortgage lenders  having to tell borrowers ‘the maximum interest rate they have charged during the past two decades’, this APR could arguably contribute to already confusing information, with both lenders and borrowers wanting to bury their heads as preferable option to advertised loans and their Klingonesque small print : ‘Interest rate of a maximum of a charged during past two decades’.  Arrows2

What could curb all this confusion?  What could possibly give those in business an opening to consider the ramifications of not considering?   ….got me to thinking about the derogatory term: Normal for Norfolk.

For any not familiar with this reference to a county, it’s used when describing an action (or less sensitively an individual) which is seen as so ridiculous it could only have been born as a result of inbreeding; the implication being it’s a stupid action. Scratch away at the letters (distraction technique for mounting paperwork) and it takes only the removal of a few consonants before a couple of useful phrases alight.

The new normal (following 2007-2008) for business could utilise these phrases as clarity from many a powerful body: this is ‘Normal for No Folk’ or this is ‘Normal for Folk’‘They’ (those who issue the statements) should be able to see clearly each time, by the response they get, that we (those the statements apply to) understand what it is we’re being told.  The phrases could help us to understand whether something is a long or short term expectation, or acceptable or unacceptable situation - We’d be able to clarify whether they do or don’t know what they’re doing. They could go about their business realising what they perceive as ‘Normal for Folk’  is anything but normal…. and we could go about ours, understanding ‘Normal for No Folk’ is anything but normal.


Image credits:  Alden Jewell  FutUndBeidl   Terry Shuck   Article credit: Copyright SUF 2013 ©


HSBC is to increase its charges for 700,000 small business customers with many losing their free banking service as part of an overhaul of accounts. HSBC’s move is towards a more ‘transparent’ system of charges.

Current account holders will be able to switch banks this month after the Payments Council confirmed a new switching service (account portability) will start on 16 September. Banks are currently offering incentives as part of a much quicker and hassle free process which might see movement away from the ‘Big Four’ (Lloyds Banking Group, RBS, Barclays, HSBC) to smaller alternatives. Payments Council switch service  has details.

When TSB Bank launches, personal finance customers of Lloyds Banking Group will be unable to access their accounts overnight. TSB bank is launching September 9  when Lloyds offloads 631 branches and 5 million customers and the bank deconstructs.

At the end of August the Pound was set for its biggest monthly advance in a year against the Euro as reports showed consumer confidence and house prices rising, along with mortgage approvals for July.

According to a poll, parents spent over £1000 on each primary school aged child during the summer holidays, and according to the Post Office Annual Summer Spend Report, the figure is over £400  – Either way, they’re back to school soon….

Image and Article credit: Copyright SUF 2013 ©

I was reminded this week about the needless risks that some business owners take.

How the person looking to start a second business had come about their first business wasn’t fully clear to me but, with a few years experience behind them, business number two, along with a partner, was being embarked upon.

Ghost crutches (shareholders and directors) had supported that first business through turbulence; giving sufficient funding for it to remain relatively stable for a couple of years, the ‘ghosts’ were not of the mindset to take on another startup with one of their own.  As unmoving was deemed an adequate position for business number one, business number two became a broken leg with no crutches to support it.

Firstly, there was an equal commitment from the partners missing, additionally, it was being undercoated with delusion and all the time, the seesaw of business funding had left money-raising firmly on the ground for money-spending to soar ever skywards, to make money raising ‘heavier’ and ‘heavier’. How it could be sustained with unreliable methods was unfathomable – this was no way to start the business, definitely no way to keep it going and absolutely no way to run a business.

Without finance there is no funding, and because I had a solution that was reliable, it was even more uncomfortable watching these people on their crash course as they cut off their oxygen supply. They would lose their potentially good business before it had even got out of the starting gates.

Image credit: Bryan Mills  Article credit: Copyright SUF 2013 ©

Currently ‘forward guidance’  has been given that, providing unemployment remains above 7%, interest rates will not go above the four year static 0.5%, which theoretically could mean interest rates staying at 0.5% for yet another couple of years, which has been a ‘norm’ for the past few years. Although low rates haven’t proven to assist stagnation in many areas of the economy, would the alternative of raising interest rates encourage growth any quicker…?

Image credit: West Virginia Blue  Article credit: Copyright SUF 2013 ©

The Governor of The Bank of England recently said, of the banking industry, “The cultural issue is fundamentally important. There has to be a change in the culture of these institutions“.

Generally little-understood, retail banking institutions, with business-principled kernels, have sometimes amused the public with their comforting marketing campaign strategies that carry messages of a having a culture that works in their customers’ best interests -  rarely is it heard of many actually doing things the way their customers like.

With vertical management structures, theirs are bureaucratic systems, therefore having a slow-moving culture. Add to that, regulations that make some quicker elements relegated to additional slow processing, the quickest changes seen might be trust becoming increasingly eroded, prudent attitudes being viewed suspiciously and, when reasonable negotiation is unworkable, antagonism compounding the complexity of necessary changes.

Yes Mr Governor - culture is fundamentally important to an institution, comes from the top and, unfortunately, is usually slow to change.

Image credit: Barnaby Kerr Photography  Article credit: Copyright SUF 2013 ©

Mark Carney, the new Governor of the Bank of England, has announced there will be no rise in the Bank of England’s base rate until unemployment is below 7 %;  part of an intermediate target in his ‘forward guidance’ and translated as, we’re unlikely to see a rate rise for about 36 months… or more….

The ONS recently announced that the UK economy has grown by 0.6% (Q2), with surveys and reports simultaneously offering up positive numbers  for some areas of business and house buying but…..  there’s usually a but…..  Yes, any rise following a fall is good to hear (I get knocked down but I get up again) …..but these numbers are pitched against previous falls. Of course it’s welcome news ….but (here we go again) the underlying issue is how far is it to get us standing again?  How far did we fall?  Do the numbers compare to 3 months ago, 6 months ago, or 3 years ago?  Are there any regional differentiations?

When life gets you down, you know whatcha gotta do?  Just keep swimming, just keep swimming, just keep swimming swimming swimming  - Dory

As an Independent and sole trader, Step-Up Finance listens and talks with other business owners and I’ve noticed that a primary common characteristic recurring amongst us is that we adapt our businesses to changes, by taking ‘forward guidance’ as an opportunity, we’re able  to keep moving forwards.

MC’s announcement might sound as though its from the Dory school of philosophy in ‘forward guidance’ but I’m wondering if the ‘guidance’ bit has been tied-off and left to drag behind instead of a contribution to resilience.

Image credit: Melody Campbell    Article credit: Copyright SUF 2013 ©







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