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SMES lose out battling big brands online
by Rosie Beasley | 22 Jun 2009
SMEs trading online are consistently forced to bump up their prices by pressure from big brands, according to a new report. The survey, carried out by eBay, found that 45 per cent of SMEs trading online had been told by bigger brands that they must sell goods at a set price. Perhaps more worryingly, 49 per cent had faced pressure from brands to stop selling their goods altogether. Speaking to the Telegraph, one online retailer said: "One company dictates a price...and if we sell lower, then supply has been restricted." Surveys are also being carried out across Europe to ascertain whether what eBay calls "brand bullying" is taking place elsewhere. The group hopes that the results of the survey will help pressure brands into relaxing their 'selective distribution' policies, and help SMEs realise the importance of good legal advice.
Darling and King argue over bank reform
by Rosie Beasley | 22 Jun 2009
Bank of England governor Mervyn King and Chancellor Alastair Darling have given contradictory statements regarding the future of the British banking industry, and steps that will be taken to avoid a repeat of the current financial crisis. Both men addressed a gathering of City luminairies at Mansion House, and both gave very different recommendations to the meeting. Mervyn King insisted that increased power should be given to the Bank of England to enable it to prevent risky activity by private banks. But Mr Darling suggested that no fundamental changes would be made to the British financial regulatory system. Financial oversight is currently the joint responsibility of the Bank of England, Financial Services Authority and the Treasury, under Gordon Brown's 'tripartite' system. But the Bank cannot currently dictate how any individual banking institution should act, even if it observes dangerous behaviour. Mr Darling, meanwhile, told the gathering that a "change of culture" would help prevent further crises, with an increased emphasis on long-term rewards rather than short-term gains for staff.
ECB Chief in stark debt warning
by Rosie Beasley | 22 Jun 2009
European governments with heavy public sector borrowing must not increase their liabilities any further, according to European Central Bank president Jean-Claude Trichet. Speaking to French radio, Mr Trichet suggested that European governments have reached the point at which they "cannot spend more and accumulate more debts." His comments are in line with the sentiments of many European leaders, with some heads of government stating that they will not put any more money into government stimulus packages. Bank of England governor Mervyn King recently said that the British government could not safely accumulate more debt, but that quantitative easing measures should not be withdrawn prematurely. Meanwhile, Mr Trichet said he expects the world economy to stabilise in 2009, with growth beginning in early 2010.
IMF warns worst of recession yet to come
by Rosie Beasley | 18 Jun 2009
The head of the International Monetary Fund (IMF) has said he believes the worst of the global downturn is yet to come, sparking a flurry of concern on world markets. Dominique Straus-Kahn, managing director of the IMF, told reporters that "the large part of the worst is not behind us yet." His comments led to a precipitous fall on world markets, with the FTSE sustaining heavy losses. Strauss-Kahn also cautioned against early optimism, suggesting that finance ministers' sightings of "green shoots" may have been premature. Some UK analysts have suggested that the recession may be technically over, or will be by the end of the next quarter. But this view is controversial, with many business groups maintaining that they see no signs of a recovery.
Supply chain worries hit small business profits
by Rosie Beasley | 18 Jun 2009
The number of businesses blaming supply chain instability for lower profits has doubled in the last five years, according to new figures. The latest Risk Insight, from Zurich Financial Group, suggests that an increasing number of businesses are finding that their profits are 'depressed' as a result of company failures further up the supply chain. This problem has been exacerbated as a result of the current economic downturn. The Group also suggests that strategies like 'just-in-time' delivery, previously lauded for their efficiency, are actually adding to the problems endured by many businesses. One weak link in a supply chain can lead to defaults and company failures further down the chain. Zurich has suggested that businesses in the UK must pay "closer and closer attention to the solvency of companies in their supply chain" in order to maintain stability.
by Rosie Beasley | 18 Jun 2009
The cost of living for the average British family has plummeted by over 10 per cent during the last 12 months, according to new figures released yesterday. The results of a survey, conducted for the Telegraph, have been used to compile a 'Real Cost of Living Index' (RCLI), which the paper says should be read alongside RPI and CPI, the conventional measures of inflation. According to the RCLI, 'real' inflation is now at -10.3 per cent. The vast majority of the reduction is accounted for by mortgage payments, which the paper says are down by an average of 23 per cent from last year. Transport costs have apparently fallen by 16 per cent, while 'household expenditure' such as council tax, utilities and insurance, are down by 17 per cent. But many of these reductions were offset by spiralling food prices. An average 'essentials' grocery trip now costs £35.20, up £2.94 from last year.
Interest rates to rise, warns business group
by Rosie Beasley | 15 Jun 2009
The Confederation of British Industry (CBI) has released new forecasts suggesting that the Bank of England may raise interest rates before the end of the year. The forecasts are in contrast to other analysts' predictions, the majority of which suggest that rates will not increase until some time in 2010. But CBI chief economic adviser Ian McAfferty suggested that the Bank would increase rates by around 0.5 per cent before the year end. The CBI's report also suggests that the economy will begin to grow in the first quarter of 2010, having stabilised in the fourth quarter of this year. This is roughly in line with recent predictions from economic think tank the National Institute of Economic and Social Research, which suggested that the recession is technically over. But other analysts have warned against early optimism. Tim Congdon of International Monetary Research told the Telegraph that quantiative easing measures must continue, and that it was far too early to call the bottom of the downturn. "The data coming from the eurozone is dreadful," he warned. "It is very premature to celebrate."
Oil prices fall, despite OPEC optimism
by Rosie Beasley | 15 Jun 2009
Oil losses widened today, as prices continued their fall from last week's eight-month highs. Crude oil was trading at $71.07, down from last Thursday's highs of $72.68. This is good news for drivers and tradesmen who will likely see reductions in pump prices, but less positive as an indicator of global financial recovery. OPEC has recently announced that they have no immediate plans to restrict production, as they are confident that demand will increase as a recovery continues. But energy traders are clearly unconvinced by this argument, as oil futures contracts have also dropped in price. Recent events in Iran would normally have pushed prices up amidst regional uncertainty. But this hasn't happened, leading some traders to believe that this fall is likely to be more sustained.
Dollar up on reserve statement
by Rosie Beasley | 15 Jun 2009
The dollar rose yesterday on assertions that it would remain as the world's reserve currency. The Russian President and governor of the Chinese central bank both suggested this week that it was time to find a replacement for the dollar as the major reserve currency. Most international debt is delineated in dollars, as it has previously been the most stable currency. Recent events, combined with the rapid rise of emerging economies like China's, have led some to question whether the time is right to move to a new world reserve. But comments from the Russian finance minister suggesting that it is "too early" to think about replacements, led to a sharp rise in the dollar on the currency markets. After the statement the dollar was trading at £0.6119, up 0.38 pence and meaning that one pound buys $1.63438.
Green shots in sight as industrial output increases
by Rosie Beasley | 11 Jun 2009
April saw a surprise increase in UK industrial output, according to official figures. This represents the first such increase since February 2008.
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