23 08 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…?
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12 08 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.
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09 08 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.
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24 07 2013
“From next year businesses will be able to see exactly where the major banks are lending — Up to within a few streets of their premises,” was part of a statement in the announcement that major UK banks are to reveal their lending data (voluntarily) across 10,000 postcode areas.
Claiming ‘a major step forward in terms of transparency’ which ‘should encourage competition by helping smaller lenders to identify gaps in the market and allowing businesses to hold their local bank to account where they aren’t lending.”
We look forward, at Step-Up Finance, to seeing what those numbers are, how they are ‘made up’ and what effects they reveal in altering restrictions to lending.
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The sun had hardly set on an announcement that RBS, the bank with kinetic pull from politicians, could see itself and Lloyds Banking Group going out to ‘public’ ownership when RBS’s CEO, with a mixed public image, built around a £45Bn public bailout to turn around a failing bank and added contentious bonuses, ( Stephen Hester ) announces his resignation.
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20 03 2013
Probably, down at No.11 after some gradual stretching exercises and a crack of the knuckles, Mr O’s spring in his step bounce downstairs turned to frantic running around; throwing things out of the cupboard under the stairs, and shouting “who’s moved the red bag again?” ……Because, as we’ve heard from pre-budget snippets, it’s a visit to Grimsville again – and the red bag could be the brightest thing on the day for the man whose made his first Tweet – on Budget Day – ‘Today I’ll present a Budget that tackles the economy’s problems head-on, helping those who want to work hard & get on’ – Clearly he’s got a lot to do.
Read more budget news:
The Treasury: http://www.hm-treasury.gov.uk/junebudget_news.htm
BBC : http://www.bbc.co.uk/news/uk-politics-21850011
The Guardian: http://www.guardian.co.uk/uk/2013/mar/19/george-osborne-2013-budget-britain
The Telegraph: http://www.telegraph.co.uk/finance/budget/9941889/Budget-2013-live.html
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04 12 2012
The Answer Is Out There – It’s The Question That Brought You Here: Financing Business Matrix
Little wonder the micro and small business owner can feel their brain turning as cavernous as an empty warehouse, when they hear the stable interview question: where do you see yourself in 3-5 years? An unsurprising response because looking at what-if moments is heavy going, with few in smaller business having the luxury of time or situation. It’s adversity that injects us with a drive to sit up and take notice.
What-if moments are unattended areas – some abandoned altogether – until, an event or circumstance occurs which has potentially damaging effect.
The shock of the situation’s potential consequences can be enough to triggers a reaction – usually played out with some matrix-type wall running and freeze frame time effects movements – forcing the situation to be considered relevant for attention. The impulse is to want to understand the consequences of the complicated that wasn’t on the taken easy route: Why? … and… How? … and How? … and Why?
For example, as a consequence of banks ‘reshuffling’ their capital the trend is for overdrafts to be called in (repayable on demand). Having defined their problem, the bank reclassifies the borrowings as part of their risk assessment to (sometimes) a bank loan, which for the borrower is usually a reclassification they don’t want – it doesn’t hold the same incentive of the overdraft i.e. the interest rate – it’s going to get complicated. Recognition of any complication, might be called in, had gone unnoticed in the first instance; overlooked for the less complicated preference. This took away an ability to speculate, hence, when ‘driven’ to an alternative financial product, opportunity can be missed again…. for as many times as ostracising behaviour is repeated.
And, the circumstances can also dictate the response that instigates a leaning towards uncomplicated. In the same example, inviting a view of being penalised for no wrongdoing, the annoying situation needs knee-jerk reaction, some stomping around, finished with some air hand-throwing and a resolved ‘what can I do?!’
Distinguishing between a problem and a challenge, the balanced approach, is discarded. There is no right or wrong question when defining a problem: the challenge is to use a combination of knowledge, experience and data as a ‘framework’ for considering what the basis of the problem is, in order to define the challenges: a problem is associated with conditions or situation whereas a challenge relates to the necessity of effort – problems are conflicts whilst challenges are the questions that break down a problem and can make a difference to the business numbers. Which, returning to the overdraft example, could mean a problem is considering what alternatives are available for the business’s circumstances, when a) that which could offer alternative has been prejudiced and side-stepped b) the preference for overdraft has become reliant upon, part of a routine and familiar. And, as most of us are creatures of habit, the challenge is altering a mindset to put the business owner back in control which can all appear too complicated without a translator, or when your mind-movie has you bent backwards dodging that slow-mo bullet.
In shock, judgement is unstable therefore it alludes to different question types, which consequently hold different answers which result in different courses of action. A reluctance to overcome innovation in the commercial financial arena has been further supported by ‘shocks’ it’s experienced, the resulting choices placed before its consumers are, in part, as result of the surrounding instability in this market driven area, which provides choices for its mechanisms benefit – not for customer benefit. Therefore, as a customer, to achieve any benefit, is dependent on understanding those choices available.
Actions can achieve objectives, however, because it’s only possible to predict to a certain extent, sometimes the best laid plans go askew. The positive/productive business practice is revisiting the business’ plan to revise areas that have become or considered becoming unstable. A shock holds implications. Any questions that follow are in context to those immediate affects; they will apply to the specific position or circumstances of that time and are, therefore, often of the knee-jerk reaction type. These have limited value compared to questions posed to prevent incident, made in preparation to avoid incident, or seek to limit damage of an incident.
Independence is perceived as a primary motivation for going into business. Fuelled by self-knowledge, understanding the processes of running the business smaller enterprise, owners and self-employed who are able to project where they’ll be in 3-5 years resonates an ability to project a partly abstract concept; without which a business becomes disadvantaged in a situation when resilience is essential.
Self assistance can be an investment for smaller businesses, however, when a route preference is made (in this case financial structure) which is dictated by blind consideration i.e. no safeguard advice has been taken, being in control is a misconception.
An approach which can, for some areas of business, be ambiguous and temporary because it underestimates the problems and challenges of the changing business and financial environment relative to the information matrix.
04 12 2012
Bank of England is to have a new Governor when Sir Mervyn King’s term ends (June 30). Mark Carney, currently Governor of the Bank of Canada, will be taking his post ‘at a crucial time in the Bank of England’s history’, as the first non-British national to lead the Bank.
The Autumn Statement may see forecasts of VAT being put up to 25%, further spending cuts, plus tax rises, as part of the brown/black announcements of the economy that run alongside the self-imposed targets for economic growth.
First time buyers’ priority is…. a garden, according to research carried out by Yorkshire Building Society. Regional differences applied to the priorities of the report which looked at living near family, transport, property maintenance, property size, potential first time buyers and actual first time buyers.
A wide ranging inquiry into the private rented sector is being reviewed by the Government and is to include the regulation of landlords and letting agents. Submissions looking into housing standards, rent control, fees, charges, tenancy agreements are to be made by January 2012.
BofE governor, Sir Mervyn King wants the proposals to be subject to a compulsory review after 5 years. `We are always being told that the Bank of England is far too powerful, this is another power I do not want to receive.’ RBS CEO Hester has claimed that High Street Banks ‘were less prone to collapse than investment banks’ and that ‘the biggest banking disasters have been simple banks’ therefore it would be ‘wrong to believe that it was dangerous to mix the cultures of investment banking and High Street or retail banking with the same institution’, whilst Lloyds’ CEO has compared retail banks to an army, due to their much hierarchical structure, and that ring-fence would make it easier for the government to deal with banks that went bust. Comments relative to the new banking ring-fence, designed to separate a bank’s core activities from its riskier investment banking, as recommended by the Independent Commission on Banking (Vickers) are expected to be implemented in 2019.
The City has congratulated itself on 20 years of UK corporate governance codes, which, since the Cadbury document (1992), 70 other countries having followed-on by adopting similar guidelines. That is 19 Best Practice principles for corporate governance; the role and structure of the board which are now called the UK Corporate Governance Code. The question is, has the code done its job?
A new study of male office workers claims that men who wear pink shirts earn an extra £1,000 than their counterparts, are better qualified, more confident and a greater number of compliments from their female colleagues, the green shirted are most likely to be late and white shirted are punctual. However, what the study didn’t tell us was….. how many mix their colours with their whites in the wash.
Image and Article credit: Copyright SUF 2012