Tuesday 30th September

Consumers ‘not feeling the recovery’

Two separate indicators of consumer confidence show that people are not feeling the full benefits of the UK’s economic recovery....

Two separate indicators of consumer confidence show that people are not feeling the full benefits of the UK’s economic recovery.

Accountancy group EY said real take-home pay would not return to pre-crisis levels until 2017 and that the ‘squeezed middle’ and the young were worst affected.

In a report the EY ITEM Club, a respected group of economists, said households were facing a “lost decade” of wage growth meaning consumer spending would stay below historic levels.

It also means consumer-facing businesses are facing a challenging trading environment, it said.

Martin Beck, senior economic advisor to the EY ITEM Club, said: “Total household incomes have strengthened because more people are in work but individuals do not have extra money in their pockets.

“Real wages are being held back by strong growth in the supply of workers and the fact that firms are facing increased non-wage costs, such as new pension schemes.”

Meanwhile a barometer of consumer confidence by GfK showed sentiment falling in September to a net score of minus one, from plus one in August.

Over the last 12 months confidence was still up eight points, however, despite concerns among respondents about their personal financial situation and the strength of the economy generally.

“Many people are not themselves feeling any better off despite the growth in GDP, and this may be tempering the impact of positive media coverage of the economy,” said Nick Moon at GfK.

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Q2 economic growth revised up

Economic growth in the second part of 2014 has been revised up by government statisticians to a racy 0.9 per cent, from 0.8 per cent in a previous estimate....

Economic growth in the second part of 2014 has been revised up by government statisticians to a racy 0.9 per cent, from 0.8 per cent in a previous estimate.

The increase solidifies the UK’s place as one of the fastest growing industrialised economies in the world. On an annual basis, the economy grew 3.2 per cent between April and June.

Figures from the Office of National Statistics (ONS) also showed that the economy returned to its pre-recession peak in the third quarter of 2013, earlier than previously thought.

The biggest contribution to the revised figures was construction, revised up from no-growth to 0.7 per cent growth in the second quarter.

Responding to the news, chancellor George Osborne tweeted: “Good economic news today. GDP in Q2 revised up to 0.9%; biz investment up 11%. More evidence that tackling our problems head on works.”

John Hawksworth, PwC’s chief economist, said: “There was some good news on the composition of recent growth, with business investment particularly strong in the latest quarter.

“At the sectoral level, services continue to lead the way, with particular strength in communications, technology and business services sectors. These are the new powerhouses of the UK economy.”

“Overall, the new data suggest that UK GDP followed a similar path to total EU GDP between early 2008 and mid-2012, but has since shown much stronger growth as the UK decoupled from the eurozone.”

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Businesses give Osborne warm reception

Businesses have given a generally positive reaction to chancellor George Osborne’s address to the Conference Party Conference yesterday....

Businesses have given a generally positive reaction to chancellor George Osborne’s address to the Conference Party Conference yesterday.

In his speech, Mr Osborne outlined £25 billion additional cuts to public sector spending, including a two-year freeze in welfare benefits.

But he promised to keep taxes low, tackle youth unemployment and continue acting to lessen the UK’s annual deficit.

In response, business groups said they wanted to see a “fair tax environment”, with more provision to combat youth unemployment and more effort to increase rates of house-building.

John Cridland, CBI director general, said: "The economic recovery is strengthening, but it's certainly not job done, so businesses will be buoyed to hear the chancellor commit to an economic plan for the long-term.

He added: “Investment in infrastructure, like runways, and in skills are the right choices to boost growth across the country.”

Terry Scuoler, CEO of the Engineering Employers Federation, said: “The Chancellor has made it clear that protecting and building the economy will remain his central focus through the election and beyond.

“We welcome this and industry will not be alone in applauding – eight in ten consumers polled by EEF support this too.”

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Friday 26th September

UK SMEs lead the EU pack on exports

UK small and medium businesses are boosting sales by exporting; more so than businesses in other major EU countries, a new survey has revealed....

UK small and medium businesses are boosting sales by exporting; more so than businesses in other major EU countries, a new survey has revealed.

Research involving 8,000 exporting firms from seven EU countries found that 43 per cent had increased turnover between 2010 and 2012 by selling overseas. For the UK alone the figure was 72 per cent, according to the data published today by UPS.

Other countries included in the research were Germany, Italy, the Netherlands, France, Poland, and Belgium.

By sector the biggest exporters were technology and industrial suppliers. Meanwhile, just over 30 per cent of UK businesses said they export outside the EU and the favoured destination for these businesses is the US.

But UPS said more businesses should be looking further afield for new customers. It said there was evidence that UK firms harboured an “island mentality” and had concerns about the reliability and security of far-flung export destinations.

“Our research shows that some ambitious SMEs are already taking the first steps toward expanding into international markets,” George Willis, managing director for the UK, Ireland and the Nordics at UPS.

The business rewards of exporting can include increased revenue and robust growth, and by working with the right logistics partners, the risks can be managed,” he said.

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SMEs lined up for Working Mums Awards

Some of the UK’s most employee-friendly small and medium businesses have been shortlisted for the Workingmums.co.uk Top Employer Awards....

Some of the UK’s most employee-friendly small and medium businesses have been shortlisted for the Workingmums.co.uk Top Employer Awards.

The businesses have been nominated across eight categories, from the smallest businesses employing one-to-25 staff, to larger SMEs with 250 employees.

The awards recognise progressive HR policies and will single out businesses for praise in the areas of family support, treatment of new fathers and innovation in flexible working.

Gillian Nissim, founder of Workingmums.co.uk, said: “The aim of these Awards and our Best Practice Report which features our winners is to spread the word about the innovative practices these businesses employ so that others can be inspired by them.

“These employers fully understand the business case for recruiting and retaining talented female staff and go out of their way to back that up with action.”

The awards are sponsored by a host of blue chip businesses from McDonalds to Royal Mail and will be judged by an expert panel featuring Dave Dunbar, head of BT Flexible Working Services and Clare Kelliher, professor of work and organisation at Cranfield School of Management.

Winners are to be announced at a ceremony at London’s Soho Hotel on 4 November.

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Crowdfunding 'top choice' for small biz funding

A third of small business owning looking for funding say crowdfunding will be their most likely route to investment, according to a report....

A third of entrepreneurs looking for investment say crowdfunding will be their most likely route, according to a report.

Law firm Irwin Mitchell conducted its research at the MADE Festival in Sheffield. Following a panel discussion on the topic of alternative finance, 75 entrepreneurs were asked to name their top choice.

The results showed that 32 per cent said they would turn to crowdfunding in the next 12 months, followed by 17 per cent considering person-to-person lending platforms and 13 per cent planning investment from business angels.

"What was clear from the discussion was that although many entrepreneurs have not yet used alternative forms of funding, it looks like many are happy to do so and will in the next year," said Andrea Cropley, corporate partner at Irwin Mitchell.

On the flipside of the discussion, 77 per cent of delegates said they would invest through a crowdfunding platform, compared with 63 per cent P2P and 69 per cent as an angel investor.

But 31 per cent said the crowdfunding industry needed better regulation and investors were at risk in some cases.

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Department store sales surge in Sept

UK shop sales grew strongly in September with department stores, footwear and furniture retailers leading the way, according to new data from the CBI....

UK shop sales grew strongly in September with department stores, footwear and furniture retailers leading the way, according to new data from the CBI.

On the CBI index, which quizzes 123 of the UK’s biggest retailers, sales are rising “solidly” on the whole, although the pace of growth has slowed slightly compared with August.

Sales were well above the seasonal average and orders placed by retailers with their suppliers were also growing steadily, it said.

A cloud to the silver lining was a significant slowdown in grocery shopping, which is the retail industry’s biggest sub-sector, while chemists also had an unexpectedly bad month as well.

Rain Newton-Smith, CBI director of economics, said: “Solid growth continues on the high street, with most sectors doing decent business and department stores performing particularly well.

“However, the pace of growth in the grocery sector tailed off significantly compared with the previous survey. Retailers are expecting sales to grow again next month, but at a steadier pace.”

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Thursday 25th September

Medium-sized business ‘ignored by gov’

The UK’s medium-sized businesses are being overlooked by policy makers who focus on start-ups and multinationals, according accountants BDO....

The UK’s medium-sized businesses are being overlooked by policy makers who focus on start-ups and multinationals, according accountants BDO.

In a report out today, BDO refers to a “policy and profile black hole” into which many promising businesses have fallen. They are too big to enjoy benefits afforded to small businesses but too small to enjoy the limelight of bigger corporates.

Yet businesses in this bracket create more than 25 per cent of all private sector jobs, despite accounting for less than one per cent of the total business stock.

BDO researched thousands of British firms with turnovers between £10 million and £300 million. It found these contributed £1 trillion to the British economy, a third of total private sector turnover, and employed around 6.2 million people.

Simon Michaels, managing partner at BDO, said: "Compared to other European nations, Britain's middle-market is undervalued and overlooked. Despite already contributing a remarkable amount to UK GDP and jobs, these businesses have the potential to deliver even more.

"The UK government has done a good job at promoting the general needs of business but more can be done to help Britain's mid-market specifically.

“As we begin the run-in to a general election, this is a good opportunity to reflect on the needs of this section of our economy, as all political parties consider what they can do to drive economic growth."

BDO has released a 'Mid-Market Manifesto' outlining ways to boost businesses. It includes recommendations for cutting taxes for exporters, awarding government contracts on employment and training benefits, not just cost, and allowing the Regional Growth Fund to lend to smaller businesses.

Mr Michaels added: "Straightforward changes even to policy around procurement could make a material difference - current collaborative initiatives like HS2, that favour only smaller enterprises, could be broadened to include the mid-market, benefitting both those businesses and the wider economy.

"Our policy recommendations are rooted in reality and quantify just how beneficial to businesses, job creation, and the wider economy they could be. There is now a unique opportunity to tilt the balance in the direction of growth for the mid-market to ensure we drive value for UK PLC."

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‘Micropreneurs’ changing the business landscape

The number of UK micro firms has leapt 1.4 million since 2000, making them the fastest growing category operating across the country....

The number of UK micro firms has leapt 1.4 million since 2000, making them the fastest growing category operating across the country.

Figures by the Centre for Economics and Business Research (CEBR) show the stock of micro firms went up 43 per cent since 2000, but that numbers of firms categorised as ‘high-growth’ has fallen significantly.

In the CEBR study, high-growth firms are defined as growing headcount by 20 per cent or more for three consecutive years. The proportion of these businesses has fallen by a fifth since 2005, it said.

David Swigciski, SME trading director at RSA, said: “The recent recession has had a significant impact on the business economy, with companies becoming smaller in size. Unfortunately, continuing along this road isn’t an option if we want a sustained recovery from the economic downturn.

“Getting back on track and strengthening the economic recovery is a case of redressing the balance between start-ups and growth. This can be done by encouraging investment in growth and helping – as well as ensuring – SMEs reach their full growth potential.”

CEBR said the high-growth business sector was expected to recover, but that government support was required to help it develop.

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Stelios takes £1.42m Crowdcube investment for ‘easyProperty’

Sir Stelios Haji-Ioannou and property entrepreneur Robert Ellice have bagged a £1.42 million cash injection from nearly 400 investors on the crowdfunding website Crowdcube....

Sir Stelios Haji-Ioannou and property entrepreneur Robert Ellice have bagged a £1.42 million cash injection from nearly 400 investors on the crowdfunding website Crowdcube.

The money will go towards creating easyProperty, a new venture from easyGroup, which allows customers to book services on a pay-as-you-go basis when buying and selling properties with no admin charges or commission.

The founders have estimated that this virtual estate agency concept could save people around £7,000 on the average London property, compared with standard estate agency rates.

easyProperty CEO, Rob Ellice, said: “The ‘easy’ philosophy is simple – disrupting the status quo and offering people significant savings on what they would normally pay. Now it’s time to shake up an out-dated property industry.

“By offering a stake in the company, easyProperty is giving landlords, property vendors and private investors a unique opportunity to be part of a market revolution.”

easyProperty had its official launch last week and its creators will use the money to prop up its lettings service before focusing on property sales in the new year. Plans exist to grow across Europe and to enter the commercial property market also.

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