It’s no news to describe the current UK economy as ‘abnormal’ therefore, following the OBR’s latest economic forecasts for growth, the Chancellor’s autumn statement wasn’t too surprising. With plenty of commentary around (both winners and losers) we were able to enjoy a ‘lighter’ viewpoint via The Daily Mash. Apparently the future of a cutting-edge economy will be all about ‘widening things’, starting with the infrastructure that will become our ‘great national project’; ‘114 lanes’ being added to the M6.
The objective of credit-easing for small and medium sized businesses is to be met with the taking back, from the Bank of England, a majority of debt guarantees by the Treasury and deploying the amount for small business. The National Loan Guarantee Scheme will, in effect, underwrite bank’s borrowings which are to be passed on to small businesses. With a cut off point of 50 employees, the devil-in-the-details and likely pages of bureaucracy, we’ll let someone else explain how this attempt to increase competition and compete with banks in the market for business loans works.
There is potential uncertainty for some 41% of mortgage holders who don’t have life insurance, according to a recent survey. With findings suggesting 7 million people having a collective outstanding balance of £245 billion; with exposure of an average £36,000 debt for dependents.
The mid-line is being focused on by the Treasury as the ‘real engine of growth’ with some 10,000 mid-sized companies being either cherry picked as the best, or identified to ‘professionalise’, by The Business Department in support of those who are neither too large or too small and have been ‘neglected’. Family owned /managed companies are in particular of concern as underperforming, with the expectation that a wider use of non-executive directors to be encouraged.
With an EU summit this month, decisive action is being called for as market pressures increase. The FSA has told Britain’s banks to draw up contingency plans for any ‘disorderly break-up’ of the euro zone or exit of some countries. Averting growth suppressors are key for companies and managing distress by an ‘assume the worst’ approach is becoming the norm.
With health care, energy and consumer goods among the most exposed industries to the Euro, pharmaceuticals are a sector with limited wiggle room due to ‘ethical obligation to supply life saving medicines, even when payment is uncertain’. Companies who sell in the Euro Zone, such as Novo Nordisk, the world’s biggest insulin for diabetes maker, put pricing strategy on their radar for discussion. Although, as way of perspective, a CEO of one of Europe’s largest manufacturing companies has said ‘We would not die without the Euro’.
(Image and Article credit: Copyright SUF)