Inflation Drops in October
The rate of Consumer Prices Index (CPI) inflation in the UK fell slightly to 5% last month, dropping from of 5.2% in September.
Falls in the price of fuel, food and air transport all contributed in driving the inflation rate lower.
Despite the drop, the rate still remains well above the Bank of England's target of 2%.
Retail Prices Index (RPI) inflation, which includes mortgage interest payments, made a similar drop from 5.6% to 5.4%.
Despite the fall, the government said it recognised that inflation remained high.
A Treasury spokesperson said, "These are difficult times for households as prices continue to be affected by conditions in the global oil and gas markets."
Food prices were driven down by heavy supermarket discounting and good harvests, according to the Office for National Statistics.
Air fares, which are historically very changeable, fell by 6% compared to the previous month.
Petrol also fell by 0.5p a litre, reflecting falls in the price of crude oil due to the weakening global economy.
Upward pressure on prices came from increases in the cost of clothing, electricity and gas.
Price rises from all the major energy suppliers have increased domestic fuel bills and are also expected to push up November's inflation figures.
The prolonged period of high inflation has made it difficult for savers to keep up with rising prices.
According to the Moneyfacts financial information service, there is no standard savings account currently available which would allow people to ensure their savings keep up with inflation, after tax is taken into account.
"Over the last year, the number of savings accounts that beat inflation for basic-rate taxpayers has dropped successively from 91 to absolutely none, which leaves savers in an impossible position," said Sylvia Waycot from Moneyfacts.
Posted at 04:07PM Nov 15, 2011 by Marc Stenton in The Economy | Comments[0]
Company Confidence Dropping
Business confidence has plummeted by a record amount as fears persist the economy is set to contract in the final quarter this year.
The BCM Confidence Index collapsed from +8.1 in the third quarter to -9.7, according to the latest figures.
The index is now at its lowest level since the 2009 recession, fuelling concerns the economy will shrink by some 0.2% in the final quarter.
This would mean that the growth for 2011 would end up at 0.9%, far short of the 1.7% predicted early in the year.
The index revealed confidence across all business sectors has fallen, with just energy, water and mining remaining in positive territory at +2.3.
The property sector is in the weakest position with confidence tumbling to -18.7, followed by banking, finance and insurance with -14.6.
Michael Izza, Chief Executive of ICAEW, said, "In the first nine months of the year, businesses have played their part in supporting economic growth.
"Many are proud of their success against a backdrop of a very slow and protracted recovery. Yet they are becoming increasingly worried about the immediate outlook and the risk of a double dip recession.
"They are looking to the Government which now needs to take urgent steps to restore business confidence and to show that it understands the need to rapidly change the mood that the business community clearly feels."
Turnover and profit growth expectations have now declined for two successive quarters, which has been compounded by a steep drop in capital investment growth expectations.
In total, more than 60% of UK companies are operating below capacity with the number of new employees expected to increase by just 0.9% as companies refrain from taking on new staff.
Grant Thornton CEO, Scott Barnes said, "The extent of negative sentiment in underlying business performance indicators, with confidence dropping across the UK's regions and sectors, is worrying.
"Where they can, businesses need to make the most of opportunities in growing Asian and BRIC economies to maintain demand and safeguard future growth while keeping a close eye on cost and efficiency."
Posted at 03:37PM Nov 10, 2011 by Marc Stenton in The Economy | Comments[0]
Personal Insolvencies Drop
Bankruptcies have hit their lowest levels since 2004 as fewer people were declared insolvent in the third quarter of this year.
But analysts warned that the figures did not give the full picture of those with severe debts.
The Insolvency Service said individual insolvencies overall in England and Wales decreased to 30,219 in the third quarter, down from 30,513 in the three months to June.
The latest figure represents a 1% drop on the previous quarter and an 11% fall on the same period last year. Of this figure, the number of bankruptcies has tailed off to 9,567, a sharp fall of almost a third (31.2%) on the same period last year.
The last time there were so few bankruptcies was in 2004, when there were 8,999 in the last three months of that year.
Meanwhile, the number of debt relief orders stands at 7,604, a 7.6% rise on the same time last year and individual voluntary arrangements (IVAs) are up 0.7% on last year, with 13,048 people entering into an IVA between July and September.
The previous personal insolvency figures had represented a rise on the first quarter of this year, when insolvencies stood at 30,145.
Before the previous quarter's figures, personal insolvencies had been falling, despite the tough economic background which has seen stagnating house prices, job uncertainty and rising living costs.
Posted at 04:44PM Nov 08, 2011 by Marc Stenton in Personal Finance | Comments[0]
Plymouth Come Out of Administration
Football club Plymouth Argyle can finally look forward to a better future after a takeover deal by local businessman James Brent was given the green light to finally bring the stricken club out of Administration.
The board of the Football League have agreed to transfer Plymouth's league share to Brent's Green Pilgrim Limited company and bring to an end the sorry chapter in the club's history.
But Football League chief Greg Clarke warned the deal 'required a significant leap of faith by the board' and promised to keep an eye on the Pilgrims' finances in future.
He said, "I would like to welcome James Brent to the Football League and thank him for the efforts he has made to help save Plymouth Argyle Football Club.
"It is important to place on record that his takeover proposals have required a significant leap of faith by the board, which it has agreed to take in order to preserve the future of professional football in Plymouth.
"In seasons ahead, the League will closely scrutinise the financial affairs of the club to ensure that the promises made to the board are kept.
"For many months staff have worked without pay and without any certainty that they would receive money owed to them or even have a job in future.
"Without their collective resilience there would not be a professional football club in Plymouth on Monday.
"I would also like to thank Plymouth City Council. By agreeing to purchase Home Park they have ensured that the Pilgrims can continue making an important contribution to people living in the local community.
"Finally, I would like to thank Plymouth supporters for their patience and continued support of their club. Hopefully, this will be the start of a better future for Plymouth Argyle."
Plymouth currently prop up the entire football league, sitting bottom of it’s fourth tier, two divisions lower than when their financial difficulties began.
Posted at 04:36PM Nov 02, 2011 by Marc Stenton in Sport Finance | Comments[0]
JJB Still Struggling
Struggled sports retailer JJB Sports has warned that it is about to face some critical trading periods as it bids to get back onto steadier ground after announcing yet more big losses.
JJB have confirmed pre-tax losses of £66.5m for the six months to the end of July, up a staggering 177% compared with the same period last year.
Like-for-like sales which measures sales in stores open for more than a year also fell by 17.7% with total sales tumbling a fifth to £142.4m.
The Wigan based company boasts 195 stores and 4,500 employees. Christmas, the January sales, the 2012 Games and the European football championships have been marked as key shopping periods, success in these periods will go a long way to helping them to continue.
In March of this year, the struggling retailer avoided administration for the second time after landlords and creditors threw their support behind an emergency rescue through a second CVA.
While the multi-million pound losses have almost tripled, chief executive officer Keith Jones remained optimistic.
He said, "Despite the consumer environment being extremely challenging and expected to remain so for the foreseeable future, our re-sized store portfolio and other cost-saving initiatives have allowed us to manage the business and maintain tight financial controls.
"Our focus on people and processes is yielding early wins and with the continued hard work from colleagues across the Group, I remain confident of JJB's return to profitability and growth.
"Our turnaround plan is now firmly established in the business and good progress has been made in a number of key areas, however there is much still to do."
Jones blamed the closure of unprofitable stores and the sell-out of old and obsolete stock as the main problems behind the balance sheet.
He added, "Despite the tough trading climate, the business is in better shape than of late and has the opportunity to develop the JJB proposition into a truly authentic sports retailer over the next few years."
Posted at 04:53PM Oct 31, 2011 by Marc Stenton in Insolvency | Comments[0]
Olympic Village Contractor to Enter Admin
A major contractor at the London 2012 Olympic Village is to enter administration, leaving 150 jobs hanging in the balance.
Parry Bowen, which had contracts fitting the curtain walling and glazing in the Stratford base, is expected to appoint Irwin & Company on Monday.
Directors of the Staffordshire company blamed the "dreadful state of the construction market over the last couple of years".
Despite boasting substantial cash reserves two years ago the current climate gradually ate into this capital.
A statement released by the company said, "It is with great sadness and heavy hearts that the directors of Parry Bowen Limited announce that after 20 years the business has ceased trading with a view to going into administration.
"Two years ago the company had substantial cash reserves which the directors believed would see it through these difficult times.
"The dreadful state of the construction market over the last couple of years has unfortunately seen these reserves disappear as reduced margins and customers’ reluctance to pay have taken their toll.
"The directors hoped that a proposed reduction in staff would have been sufficient to see the business survive, but recent industry forecasts suggesting that there will be no imminent improvement in the outlook for the construction industry made it clear that even this action would not have been enough."
"Throughout its life Parry Bowen maintained a focus on technical expertise. The business has been an important participant in numerous prestigious projects which is testament to the skill and dedication of its workforce.
"More optimistically, the company’s state-of-the art production facility has an excellent reputation and may be attractive to potential purchasers, a matter that will pursued by the directors in conjunction with the administrator in due course."
Doubts initially surfaced about the company’s health after it sent staff home last Friday. The offices of the building cladding specialist are based at the Burntwood Business Park in Chasetown.
Posted at 03:38PM Oct 26, 2011 by Marc Stenton in Insolvency | Comments[0]
Retail Sales Better Than Expected
UK retail sales rose by 0.6% in September, according to the latest figures from the Office for National Statistics (ONS).
That was stronger than analysts had forecast and more than reversed a 0.4% fall in volumes in August.
The ONS also reported that sales were 0.6% higher than September last year.
A rise in laptop and computer game sales helped to boost the numbers. The ONS also said sales made over the internet continued to climb.
Non-store retailing, including online purchases, rose by 15.5% over the year as a whole.
The ONS estimates that internet sales accounted for 9.6% of all retail spending in September, excluding petrol.
Meanwhile, textile, clothing and footwear sales volumes were 2.1% lower than in the previous year, the sector's biggest annual fall since April 2008.
"That's quite bad for what they would expect that month," said ONS statistician Aileen Simkins.
"Maybe that was just the effect of the warm weather towards the end of the month, and people weren't really wanting to go out and start shopping for winter outfits yet."
Posted at 03:42PM Oct 21, 2011 by Marc Stenton in The Economy | Comments[0]
UK Inflation Increases
The rate of Consumer Prices Index (CPI) inflation in the UK matched its record high in September, rising to 5.2% from 4.5% the month before.
An increase in energy costs was behind a large proportion of the rise.
The 5.2% rate is the highest CPI measure since September 2008, this puts it at its highest level since the CPI measure was introduced in 1997.
The Retail Prices Index (RPI) rose from 5.2% up to 5.6%.
The latest RPI measure is the highest annual rate since June 1991.
The Office for National Statistics, which released the data, said in a statement, "By far the largest upward pressure to the change in CPI came from increases in gas and electricity charges.
"There were also large upward pressures from air transport and communication services.
"Gas and electricity costs have risen 9.9% in the past month"
Bills for gas and are up a massive 18.3% on the year.
Transport has risen 12.8% on the year, and food was 6% higher than 12 months ago.
September's CPI measure is way ahead of the Bank of England's target rate of 2%. However, Bank governor Mervyn King still expects inflation to begin falling next year, once factors such as January's VAT rise drop out of the equation.
Posted at 03:45PM Oct 18, 2011 by Marc Stenton in The Economy | Comments[0]
Personal Insolvencies Expected to Jump Up
Personal insolvencies are set to rise still further as unemployment hit 2.57m, an increase of 114,000 between June and August 2011 taking it to it’s highest level in 17 years.
One charity predicted 70,000 new cases of extreme financial hardship among the 16-24 year old bracket and that 185,000 Britons are now struggling with significant debt.
According to official figures from the Office of National Statistics, the unemployment rate hit 8.1% according to this month’s figures, marginally higher than the highest total declared in 1994.
Joanna Elson OBE, chief executive of the Money Advice Trust, said becoming unemployed is the trigger for debt problems all too often.
She explained, “Increasing levels of unemployment will undoubtedly bring greater financial hardship to homes across the UK.
“The figures show that in the three months running up to August, 114,000 people became unemployed, that’s 114,000 people for whom paying a bill has suddenly become a desperate challenge.”
Elson has called on the industry to encourage those in financial difficulty to make contact with a specialist as soon as possible.
She said, “Evidence shows that the earlier people seek advice and get started on an action plan, the better their outcome will be.”
The latest figures show that there are now 205,000 16 and 17 year olds out of work, marking a small increase of 1.5% during the period.
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Posted at 03:56PM Oct 13, 2011 by Marc Stenton in Personal Finance | Comments[0]
OFT Targets Debt Management Companies
Enforcement officers at the Office of Fair Trading (OFT) have taken action against three businesses today as part of its ongoing action in the debt management sector.
In two separate cases, the OFT revoked the licence of Prime Legal & Financial Services of Mile End, London for failing to adequately demonstrate the knowledge, experience or necessary skills required to hold a consumer credit licence.
Meanwhile, London based Money Advice Direct has been told it can no longer trade under the name ‘The UK Insolvency Helpline’ or use domains that include the word ‘helpline’ in the name because the commercial nature of the business is not clear.
North of the border, Deric Hamilton Oliver of Midlothian, Scotland, has had his application for a licence rejected after lying on this OFT application.
David Fisher, director of consumer credit at the OFT, said he expects debt management businesses to meet the standards set out in its published guidance.
He explained, “If they do not, we will take action as we have demonstrated here.
“Revised debt management guidance, which is due to be published before the end of the year, will give even greater clarity as to the standards that the OFT expects of businesses that it licenses in this sector.”
Since the OFT's compliance review a year ago, 61 businesses have had their licence revoked, or have surrendered their licence, or had an application refused.
Posted at 03:48PM Oct 10, 2011 by Marc Stenton in Insolvency | Comments[0]
Fuel Consumption Cut By A Staggering 1.7Bn Litres
It has been revealed that drivers in the UK are now consuming a whopping 1.7bn less in fuel than three years ago when the credit crunch began.
The AA have calculated that over 15% less fuel was bought during the opening six months of the year compared with the same period in 2008 as prices have continued to rise.
To put the drop into perspective, the AA said that 40,000 full petrol tankers would be needed to hold the extra fuel being bought in 2008. The decrease has also deprived the treasury of around £1bn in fuel duty in the first half of this year alone.
Drivers are being left with no option but to use less fuel as rising living costs generally means many are struggling to make ends meet as it is. It is also noted that business are being hit hard as well, also using far less fuel than pre-recession.
The average cost for 1 litre of petrol today is 134.9 pence compared with 106.4 pence in October 2008, a 27% increase.
One positive from the results were that emissions of exhaust fumes are now at a lower level than previously.
Tesco have reported that they believe the high fuel prices have impacted on people’s spending power this year.
Posted at 03:36PM Oct 05, 2011 by Marc Stenton in The Economy | Comments[0]
£22.5 Million Written Off Every Day
New research released today by debt charity Credit Action have showed some worrying results as banks are currently writing off an average of £22.5m a say.
Other statistcis from the research show that the Citizens Advice Bureau now deals with a staggering 8910 new debt problems every single day and that nearly 100 properties per day are currently being reposed, working out at one every 14.6 minutes.
Liz Dunscombe, director of project and partnership development at the charity says the annual growth rate in consumer lending nudged up to 2.3%, making it the highest it’s been since May 2009. Dunscombe believes could indicate borrowing to meet existing commitments.
She also added, “Given that daily write offs of loans by banks and building societies increased in Q2 2011 to £22.54m, a worrying picture begins to emerge.
“Additional pressure has been placed on some on family budgets due to recent increases in redundancies and long-term unemployment.
"The number of daily redundancies rose to 1775 in the three months to the end of July, whilst the total number of people who have been out of work for over a year also increased to 849000, up 2.5% on the previous quarter and 6.4% over the past year.”
Also noted in the survey is that the average UK adult debt now sits at £29,546 (including mortgages).
Posted at 03:48PM Sep 30, 2011 by Marc Stenton in The Economy | Comments[0]
Tough Year Ahead for Retailers
There could be a turbulent 12 months ahead for retailers according R3’s latest research with 10% of companies in the sector expecting to enter Administration within the next year.
According to figures published from R3’s Business Distress Index, which measures the views of over 500 businesses, a quarter of retailers are experiencing some kind of cash flow difficulty while six in ten have confirmed a decrease in profitability.
The news comes ahead of tomorrow’s much-hyped ‘Quarterly Rent Day’ which is widely anticipated to push dozens of businesses into administration.
According to R3, it was the last Quarterly Rent Day which triggered administration proceedings at Habitat, Homeform and Jane Norman.
Frances Coulson, president of the trade body, said last time round, the rent day identified many retail businesses that had survived the recession, but did not have the funds to meet their rental obligations.
She added, “They had depleted their reserves to stay afloat and had no contingency plan for additional costs, unexpected outgoings or a fall in sales.
“Over the preceding three months we have seen little improvement in retail sales, economic growth or consumers increasing their expenditure. For that reason we are likely to see further retail casualties.”
Coulson explained two key reasons as to why the pressure is mounting on retailers.
She added, “As consumers have less money to spend, stores are discounting their prices to get people through their doors; this is at a time when inflation and rising commodity prices have increased costs.
“Given the nature of the retail business, it is extremely worrying that one in four is experiencing cash flow difficulties. This suggests that many are holding a large amount of stock or have slow moving stock.”
Posted at 03:47PM Sep 28, 2011 by Marc Stenton in Insolvency | Comments[0]
Fatboy Slim's Record Label Fighting Winding Up Order
Southern Fried Records, the record label majority owned by Norman Cook, the real name of renown DJ Fatboy slim, says it is confident it will settle outstanding tax debts with HMRC today ahead of a court appearance on Monday.
The label, also home to international artists such as Armand Van Helden and Mondo Grosso, is scheduled to appear at the Royal Courts of Justice on Monday after a winding up petition, but directors at the label claim HMRC wrongly calculated the group’s liability.
Stephen Flannery manager of the company's finance and business affairs, said a payment would be made on 23 September.
He said, “It’s VAT really, but between what they (HMRC) are looking for and what we estimate, there is a big difference. They came down ages ago, probably two years ago and had written a kind of assessment. They kept chasing that up every now and again and there have been payments to them ongoing.
“Whereas I was writing to them thinking it was getting dealt with, they have suddenly called in the attack dogs and we are in a position where we are going to have to deal with this and pay what they are looking for.
“We are reluctant to keep paying that because they don’t seem to want to agree with what we’ve paid.”
Flannery said the company now intends to file a retrospective claim for what it believes to be the right amount set against what they company has actually paid.
Fatboy Slim founded Southern Fried Records in 1994 to publish material that major labels refused.
Posted at 03:49PM Sep 26, 2011 by Marc Stenton in Insolvency | Comments[0]
Public Borrowing In August Higher Than Expected
Public Sector Net Borrowing (PSNB) reached its highest total on record for the month of August in the UK, the higher than expected figure of £15.9bn marked a rise of £1.9bn or 13.6% on the same period a year ago.
It means a third of the way into the fiscal year, cumulative borrowing at £52bn is only 7% less than a year ago.
However, last year's total borrowing estimate was cut by £5.9bn, mainly thanks to changes in local government data.
The year to date borrowing has also been revised down falling by £4.6bn.
Despite these changes, the government net debt still stands at 61.4% of annual economic output, comfortably more than 55.3% a year earlier.
"At face value, the latest month isn't very good, but last month was revised much lower and the previous fiscal year revised much lower," said analyst Alan Clarke of Scotia Capital.
The August figure, announced by the Office for National Statistics, was well above the £13.2bn total expected on average by City analysts and reverses the surprisingly low PSNB seen in July.
In a worrying indicator for the health of the economy, Receipts from income and wealth taxes fell some 5% versus a year earlier.
July's figure, first reported as a £20m deficit having now been revised to a £2.4bn surplus, had led some analysts to suggest the government might be on course to hit its target of eliminating the deficit by 2015, although the monthly data is known to be quite volatile.
The data excludes the effect of the government's interventions to support the banks.
Posted at 01:07PM Sep 21, 2011 by Marc Stenton in The Economy | Comments[0]
