Posts Tagged ‘Vince Cable’

FPS’ Friday Fiver

Hello All! A little late this week, and we apologise for that, but as it’s now officially the end of summer that means it’s the start of the business season and we’ve all been a little flat out here at H&K Towers. Still, we wouldn’t want to miss out on reporting another busy week in the world of financial and professional services. And what a week it’s been. Thanks to our contributors this week: Ed, Ross, Clare and Rachel.

Turn that frown upside down…At the end of a pretty crazy August, there have been some fairly gut-wrenching figures this week from the Markit/CIPS Purchasing Managers Index (one of our clients). Declines in manufacturing output prompted fresh talk of double-dip recession, construction continued to be weighed down by weak confidence in the housing market, and all eyes are now on the all-important Services PMI which comes out on Monday.

Happy faces are hard to come by in the UK at the moment. But are we talking ourselves down too much?

Worrying indeed, but could it be that the UK economy is going through stage four of what could be termed ‘post financial crisis bereavement’ (PFCB)? According to one description, this involves ‘a feeling of listlessness and tiredness’ and possibly ‘wandering around in a daze.’

Well it certainly does feel like that sometimes but if the theory holds at least this is the final stage before acceptance sets in and the economy ‘regains its energy and goals for the future.’  It may just be the time for a bit of Vince Cable style positive thinking.

Breaking News – Football clubs spend less…The last minute wheeler-dealing of transfer deadline day was interesting for many reasons. But it’s the debate it has started about financial fair play which poses the biggest question for the future of the beautiful game. We’ve commented before on the ownership of football clubs, particularly in the immediate future. The onset of the Financial Fair Play from UEFA, requiring elite clubs to record a maximum debt of £39.5m over a three year period, may also have implications. Read the rest of this entry »

FPS’ Friday Fiver

We’re back, providing another round-up of some of the big stories from the world of financial services, the economy and Westminster this week. Contributors this week include Clare, Linzi, Jo and Ed, who bring us an overview of banking, pensions, retailers, and our new feature – Good Week/Bad Week.

Banking – fundamental flaws and failed customers…On Tuesday, Vince Cable held court at the Which? Banking Reform – An Agenda for Competition and Growth discussion at the Commonwealth Club, where he re-iterated his opinion that “banking is a structurally flawed industry that has fundamentally failed customers”.

Vince Cable - on the attack on banking once again (Image: Which.co.uk)

That the current system of banking is flawed is a no-brainer, but the harder question to answer is where exactly do the flaws lie? The conversation on Tuesday spanned the topics of increased competition, universal banking, ring-fencing, culture and behaviour along with new entrants into the banking market, but it seems that, nearly three years since the start of the global financial crisis, more questions continue to be posed than answered.

Is universal banking really the root of all banking evil? Do customers really feel their banks have failed them given so few of us have switched? With the array of initiatives, commissions, inquiries, and comite des sages taking place at the national, European and international levels, one has to hope that between them they will be able to identify and remedy the flaws that exist. However, there is the potential for all of these to come up with different flaws and different answers which complicate and confuse structures and customers alike!

Paying more for retirement…The spotlight returned to public sector pensions this week as figures leaked to The Daily Telegraph revealed exactly how much workers in the public sector will pay extra each month for their pensions.

Danny Alexander was asked how much more he personally would have to pay towards his pension this week (Image: Thesun.co.uk)

As expected, higher earners will take the brunt of the increases and the lowest paid workers, earning less than £15,000, will escape any increases at all.

Here are some of the figures from the proposals:

  • Those earning over £100,000 will pay £284 a month (£3,400 a year) more
  • Public sector workers in the £50,000 bracket will pay between £684 – £768  more
  • Those on a £35,000 salary face paying an extra £516 a year more

Despite the backlash, which was always going to happen, you can’t escape the welcome news that low paid public sector workers, some 750,000 people, will be exempt from any increase in contributions and those earning £21,000 will be out of pocket £108 a year, or just £9 a month. The fact remains that even with these increases, public sector pensions are still a valuable benefit.

We still aren’t buying much on the high street…Another worrying week for retailers as figures on Thursday showed that sales fell at their fastest pace for a year as consumers become increasingly reluctant to spend. This is brutal news for the already struggling retailers and may be a sign of further deterioration and shop closures to come.

Only one in three retailers claimed their sales volumes were up on a year ago, with food retailers being particularly hard hit – either we’ve all been hit by the rise in food costs and are watching the pennies like hawks or the nation is on a collective pre-holiday diet.

However, one retailer that isn’t afraid of the UK high street (or shall we say Oxford Street) is cut-price U.S. brand Forever 21, which opened its doors for us on Wednesday. Some critics state that we are not ready for ‘cheap, fast, American’ fashion’ but with the way things are going on the high street we may not have a choice.

George Soros - the latest financial veteran to retire

Good week/Bad week – George Soros & George Osborne…A tale of two George’s this week. For the first (the man who ‘broke the Bank of England’), the effective end of a remarkable 40 year investment career. While the manner of his retirement was a little sour, blaming US regulations, you can’t argue with his success over the years. He will likely be missed.

On the flip side, it was a less than stellar week for the younger George, who, as yet more vanilla growth figures rolled in, suddenly found himself the victim of attacks from several fronts. How he must be wishing for the summer break to roll around quickly.

FPS’ Friday Fiver

Hello All, and apologies for a slightly late Financial & Professional Services Friday Fiver this week, but we’ve all been a little hectic. To round out the week we bring you banking, more banking, an Archbishop and Blackpool football club. Happy weekend all!

The Big Four Banks feel the heat….The big four revealed deep divisions on restructuring at Wednesday’s treasury select committee appearance as their CEOs jockeyed for position with the powers that be. Stark divisions were revealed on the Independent Banking Commission proposed scope for ring fencing core retail banking functions. RBS’ Stephen Hester alluded to the “moral hazard” problem if government effectively insulated the market, which could perversely encourage excessive risk taking, a view supported by Barclays.

In contrast, HSBC and Lloyds support a broader separation and more diverse mix to encourage the much needed supply of credit to the market – note the Q1 figures which reveal banks failed to stay on track with “Project Merlin” pledges.

Vince Cable - back on the banker bashing trail this week (image from Telegraph.co.uk)

Finally, Vince Cable rattled the sabre again, unveiling a not so “veiled threat” to link bank bonuses to SME lending! Will this create the required traction on this fragile detente between the City and the Government? Watch this space, but maybe don’t hold your breath.

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