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Market Update

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 ©

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 ©

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 ©

Knowing enough to know, that we don’t sufficiently know enough to know how the Funding for Lending  is working, is sufficient to know we know enough to feel reassured, after listening and watching an increased floundering from a variant of lender managers, working with the scheme, as a  gurgled excuse (not reasoned response) is the suggestive qualifying factor -  There’s a new order within their employment arena.

It might be there is a threat of being taken out to the dog’s home hanging over them because Andrex-puppy enthusiasm is in short supply. A metaphoric ball we recently rolled the way of a lender, whose bright eyes and wet nose indicated a healthy ability (that too was a metaphor – not the symptoms of hay fever), after pawing (metaphor again) it around a while, the killer response was ‘not willing to support it’ – which we read as ‘can’t be bothered’, ‘not worth the effort’.

FFL ‘should allow banks to increase the availability of credit’  but, from the figures given out (August to December 2012), the imbalance between the  BofE suggested £14bn withdrawn from FFL, and the lending figures for the same period, it didn’t happen. Now, BofE  has finalised plans to extend FFL:  2015 not January 2014, additionally, during 2013 every £1 lent out offers access to £10 drawdown. But is this a clue as to why excuse and not reason was given from the business manager who takes his orders from above (another manager – not to be misconstrued with God)?

Or is it that to unravel the new order of supply and demand it’s enough to know that nobody knows enough? 

Image credit: den99   Article credit: Copyright SUF 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:
The Guardian:
The Telegraph:

Image credit: stevendepolo  Article credit: Copyright SUF 2013

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.

Image credits: SUFMC Quinn,   Global Adaptation.      Article credit: Copyright SUF 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

Rising Froth: Assigning Value Discipline

Just as the economists are said to be puzzled by ONS statistics showing a rise in employment during recession, I’m hearing some business owners being equally puzzled as to why, with an increasing roll-call of practicing solicitors, it’s difficult to find one they’re comfortable with.

As essential facilitator as part of the buying /selling of businesses and property process, the proactive and efficient Solicitor seems to be as hit-and-miss experience as the intermediary who works with client best-interest at the forefront; or as my dear old Grandpapa would say they’re all froth, no beer. From the most recent comments, it would seem that some business Service markets (just to be clear, finance included) have elements in their sectors who are achieving disproportionate reward for the work they are perceived as undertaking. Nice work if you can get it? … Not from what I’m hearing, which makes it galling to have given out advice  to a business owner to seek out the right people to handle the job, those who add value before their business gains the value, and to hear of them being let down and ultimately ever more cautious. The good old days of the friendly Solicitor haven’t gone but, just as any business has to adjust, if the friendly Solicitor can’t be friendly as well as efficient, I’ll no doubt continue hearing of a disinclination by business owners to approach them as part of the business process.

Without going into the minutia of data, exploring whether a downturn in the economy has increase or decrease effect on a professions numbers, any business service sectors’ paying clients expect full market applicable knowledge to be offered: along with guidance, advice and information; whilst efficiently having as much of any pain of a sometimes painful process taken away – no matter what the economy. In a downturn the necessity of offering value for money is ever more prevalent.

Like the three bears’ porridge, there are those who’ve always striven in reacting their resources and experience to be just right – neither too hot nor too cold with their offerings -  unlike the hot temperamental ones who won’t move until fees are paid upfront, or would rather bicker with the other party’s solicitors (I’m considerably smarter than yow!), or the too cold who are so uncommunicative they may as well be in a freezer.

The notion of excellence widely varies: think about the last place someone told you to get a bite to eat – was it the same experience for you, as them?  Now think about following through a recommendation made for your business to use….. I once needed personal photo verification; I enquired with a Solicitor’s office and was told it wasn’t a problem if I was willing to wait around to nip-in a space between appointments. It was a painless couple of minutes; I was acknowledged, and signature assigned as such. I also left £20 lighter with no receipt and a sense of being ‘fleeced’, yet had I been told beforehand about the charge, and proffered a service receipt, I’d likely be admiring the efficiency.

A frequent request made to me is that of recommending a solicitor, to which I’m happy to oblige and put into the pot those who’ve worked well with my clients. With some clients/customers never having been through a process they’re about to embark on, not fully understanding that process is understandable. How a business Service, such as the Solicitor, can surpass their understanding; un-confuse its often alien language, inform of the relevance of qualification or regulation and explain the efficiency of implementing technology, should be considerations to go alongside any recommendations.

Working with a proactive team means benefits for all the businesses involved and ultimately all-around client/customer service level  – however, Customer Service is a value discipline to which only the customer can assign worth.

Image credit: mrrakt   Article credit: Copyright SUF 2012

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