UK economic contraction 'less than thought' for 2012 

Tuesday, December 04, 2012 12:58:00 PM Categories: Economy

The British Chambers of Commerce (BCC) has increased its forecast for UK growth for 2012, but still expects the economy to shrink. The UK will shrink by 0.1% this year, less than the 0.4% contraction it had predicted previously, the BCC said. That is "entirely due to the stronger-than-expected" growth in the last quarter, helped by the Olympic Games.

But it now sees growth of 1% for the whole of 2013, down from the 1.2% it had forecast in September.

"As we wait in anticipation for the chancellor to deliver his Autumn Statement tomorrow, our new forecast highlights the challenges still facing the UK economy over the months and years ahead," said John Longworth, director-general of the BCC.

A few points of interest 

Tuesday, November 27, 2012 10:32:00 AM Categories: Economy Europe

A brief roundup of key events over the last few days:

  • Mark Carney has been named as the new governor of the Bank of England by Chancellor George Osborne. Mr Carney, the governor of the Canadian central bank, will serve for five years and will hold new regulatory powers over banks. He was a surprise choice for the head of the UK's central bank and had previously ruled himself out.
  • The UK economy grew by 1% between July and September, official figures have confirmed. The Olympic Games helped to boost growth over the summer. Compared with a year earlier, as opposed to the previous quarter, the economy contracted by 0.1%, whereas the previous estimate had shown flat growth.
  • Eurozone finance ministers and the IMF have reached a deal on an urgently needed bailout for debt-laden Greece. They have agreed to cut debts by 40bn euros ($51bn; £32bn) and have paved the way for releasing the next tranche of bailout loans - some 44bn euros.

Mixed messages about UK businesses 

Tuesday, November 20, 2012 12:37:00 PM Categories: Economy

With the ongoing struggles for UK businesses receiving much press coverage, there have been mixed messages about their future prospects, depending on whether your rose-tinted spectacles are on or not.

According to Business Secretary Vince Cable, there are "reassuring" signs the economy is continuing to recover and there is a "more upbeat mood" among the business community. "In the UK we have had a difficult time, but there are some reassuring figures on job creation, falling unemployment and business start-ups," Mr Cable said.

However, more than one in 10 shops is empty, according to the British Retail Consortium (BRC), the highest since it began collecting data on occupancy levels of High Street premises. The BRC said the town centre vacancy rate of 11.3% was the worst figure since its nationwide survey began in July 2011.

Clearly there are reasons to be optimistic but there may well be more pain for our high streets and businesses before we can be sure things are on the up.

UK inflation back on the up 

Tuesday, November 13, 2012 10:28:00 AM Categories: Economy

The UK's inflation rate as measured by the Consumer Prices Index (CPI) jumped to 2.7% in October, up from 2.2% the month before. The Office for National Statistics (ONS) said the increase was fuelled by education costs, largely because of a sharp rise in university tuition fees. Food prices also rose over the month, with price rises seen in some fresh food, including grapes and bananas.

The Retail Prices Index (RPI) measure of inflation rose to 3.2% from 2.6%.

The Bank of England is charged with keeping inflation close to 2%, something it has struggled to do in recent years as the standard way of suppressing prices is to raise interest rates, which it does not want to risk through this period of weak economic activity.

Alan Clarke, economist at Scotia Bank, said that target remained elusive: "Where do we go from here? Onwards and upwards. Utility bill increases are on their way. We've also got the effect of the US drought and increased food prices to factor in."

A key week for the world's economies 

Monday, November 05, 2012 3:13:00 PM Categories: Economy Europe

According to some analysts, this week is "the most important week of the rest of 2012". A pretty bold statement but with issues in so many countries around the world it's not hard to see why.

Firstly, America has to decide who will be its president for the next four years; then you have the Chinese starting the formal handover to its new leaders; and then you have the central banks of the eurozone and the UK deciding whether they need to do more to support their fragile economies.

In other words, this week will help to determine the long-term economic direction of countries accounting for just over a quarter of global output.

And, as if that wasn't enough, the Greek parliament will also be voting on further budget cuts that will determine whether it can get the next tranche of the European-IMF rescue package.

All in all, quite a busy few days ahead......

UK economy showing optimistic signs 

Monday, October 29, 2012 5:00:00 PM Categories: Economy

There is "reason for some optimism" for the UK economy, the Bank of England's deputy governor Charlie Bean has said. He cautioned against "getting over-excited" after new GDP data showed the recession was over - pointing out the Olympics had given a one-off boost. But Mr Bean said there were "signs of progress" from the eurozone and banking crises and inflation should be lower.

Last week's official gross domestic product figures, which measure the value of everything produced in the country, showed the economy grew by 1.0% in the three months from July to September.

It had been in recession for the previous nine months and has still not recovered the levels of output seen before the financial crisis in 2008.

The end of gender based pricing 

Friday, October 26, 2012 10:13:00 AM Categories: Regulations

The European Court of Justice ruled in March 2011 that insurers cannot price products based on gender following a test case brought by Belgian consumer group Test-Achats which said differential pricing could be interepreted as a form of gender discrimination.

The new rules come into effect on 21 December, when an opt-out clause under the EU gender directive which previously allowed insurers to offer different pricing to men and women will cease.

This change will affect everything from life cover to annuities to car insurance and, if you are considering taking out any of these products now is the time to act.

If you would like further information please get in touch.

UK economy to return to growth? 

Tuesday, October 16, 2012 9:27:00 AM Categories: Economy

The UK's economy will rebound in the second half of the year, the Ernst and Young Item Club's latest report says. However, its quarterly forecast, which is produced using the same model as the UK Treasury, still predicts that the economy will contract by 0.2% over the year as a whole.

The forecast is more optimistic than the International Monetary Fund's assessment released last week, which predicted that the UK economy would shrink by 0.4% this year.

The Item Club says economic growth will be 1.2% next year and 2.4% in 2014 and 2015, fuelled by higher consumer spending as a result of falling inflation and a better jobs market.

It says these improvements will be boosted by a recovery in the mortgage and housing markets next spring.

Capital Allowances - Have you heard the news? 

Monday, October 08, 2012 11:22:00 AM Categories: Tax

According to our research, more and more commercial property owners have become aware of the tax advantages of making a capital allowances claim. However there are still tens of thousands who have not made a claim because they have never been made aware that they can.

We have looked at Capital Allowaces before but to refresh your memories, they are a form of tax relief available to anyone incurring capital expenditure buying, building or making adjustments to commercial property. While accountants will claim on more obvious items such as shutters and curtains, fire extinguishers and carpets, generally they will not drill down to the items where the far more significant costs to a business lie. These might include air conditioning or heating systems, lighting and security systems, plant and machinery items.

Our partner in this area can provide a free consultation to check if you could benefit. We have already used this for our own property and have received back a rebate so we know it works!

For more information you ca look at the following article or give us a call!

Auto-enrolment arrives! 

Monday, October 01, 2012 4:40:00 PM Categories: Auto-enrolment

Automatic enrolment into a workplace pension, which starts for some today, will affect millions of people. The aim is to ensure that low and middle earners are provided with an addition to the state pension. However, the Institute for Fiscal Studies says some who might have saved more may stick to the minimum level.

For many workers, this will be the first time their employer has contributed to their pension savings. The pension employees derive from automatic enrolment is designed to complement both the state pension and any private pension saving.

Pensions Minister Steve Webb said: "The huge gap that we are trying to fill is [in] long-term pension saving. We have got half the workforce building up no pension beyond the state pension, and that is why this system is such a positive thing. You don't have all the hassle and complexity of choosing a pension. The firm chooses it for you, they put money in, you put money in, and then the only hassle is if you want to opt out," he told the BBC.

If you have any questions or would like to discuss how this affects you please get in touch.

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