Business turnover reaches two year high

Small business turnover

reached a 29-month high in march 2010, according to the latest Business Factors index from Bibby Financial Services. despite a challenging start

to the year, the index for the first quarter of 2010 ended on a high of 108.1 - a level not seen since october 2007. However, despite posi-

tive gdP figures, talk of recovery and other signs of green shoots, almost two thirds (62%) of businesses sur- veyed do not anticipate real economic improvement for at least a year. a change in government

(25%) and the loosening of lending criteria (25%) are cited as the two biggest factors that businesses think could stimu- late a faster recovery, states the report. the index analysed quar-

terly movements in small business turnover together with qualitative opinion from small business owners. it also revealed:  a quarter (27%) of business owners feel hopeful for the future, with an additional 10% doing well, having actually benefited from the recession.  almost a third feel the uK economy will have fully recov- ered by the end of 2010.  However, while sentiment from almost half (47%) of business owners implies that conditions are beginning to stabilise, a quarter (26%) feel trading conditions have wors- ened. the index findings were supported by views from the cBi and the British chamber of commerce, both of which have forecast growth of just 1% by the end of 2010, indi- cating that, while things may

have taken a turn for the bet- ter, the economy is likely to re- main sluggish throughout the course of the year. edward rimmer, uK chief

executive at Bibby Financial Services, said: “January’s tor-

rid weather conditions had a negative impact on the output of many uK businesses, and this slowed recovery in the proceeding months. While the latest index reading matches levels not seen for more than

two years, it actually only gained an average of 0.5 points over the first quarter of this year. “that said, march’s rise has

bought about a sense of re- newed optimism.”

Waiting for political resolve

as new borrowing rates al-

by

Robert Sinclair

director AMI

the last month has been over-shadowed by what will have been darling’s last budget and the eventual ar- rival of the general elec- tion campaign. the phoney war however continued as all parties played out a cam- paign pretending that our fiscal and structural deficits were “manageable”. no pain needed. For me this lack of honesty and the general failure to address the genu- ine concerns of electors and their legitimate questions has left me frustrated by all parties. the big economic indica-

tors are relatively benign – despite an unexpected climb in inflation due to higher prices at the pumps – and unemployment continues to come in well within plan. the public sector continues to deliver jobs but this is sim- ply not sustainable. all par- ties are committed to keep- ing interest rates low and this should protect the mortgage market for a little longer as remortgage demand remains depressed.

ready reflect the real cost of money, i am less concerned about future costs, but am still wary of there being false markets. Whilst out of recession, we

are yet to establish the econ- omy in recovery. it will be some time until we will see the kind of growth we need to get us out of the woods on government borrowing. We need to be mindful that the target is only to halve the amount we are borrow- ing each year within the next four years, not to begin to ad- dress the ever growing total overdaft. the announcement by the

department of Business, innovation and Skills that they wish to further promote the Post office as a home for mortgages is a further intervention by the state into financial ser- vices. the world of pensions is already being addressed and we should see this interven- tion as a warning shot that we need to perform more responsibly. With the FSa promoting advice and adver- tising the benefits of its price comparison website, we are encountering real challenges to prove we are worthy of our customers’ trust.

the fines and bans meted

out to the former directors of northern rock were eye- watering when considered as coming at a personal level. Knowing what is “material”

and being transparent with reporting data has assumed new focus. the need to ensure that data is complete, accurate and errors notified promptly to markets and regulators assumes a new significance the FSa has proposed

swingeing increases in fees for mortgage intermediary firms. these increases are not being levied on lenders and given their involvement in creating our financial cri- sis and the subsequent need for a much larger FSa, it is blatantly unfair and we have challenged the FSa most vigorously. Finally, many people will be contacted in coming months by oxera, on behalf of the FSa to assess the costs to the industry of the mortgage market review proposals. it is important that all in- termediary firms asked to do this work do this with some diligence. We must ensure that the cost of change are fully reflected, so if asked please take the time to com- plete the questionnaire dili- gently.

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