Banking Shake-up May Be Costly for Small Businesses

Ring-fencing the UK’s retail banking system could increase the costs of lending for small firms, business groups have warned. A report (PDF) by the Independent Commission on Banking (ICB), headed by Sir John Vickers, has set out a series of key recommendations including ring-fencing the banks’ high street operations ― such as loans and overdrafts for small firms — in order to protect them from riskier investment banking divisions. Banks would also be required to set aside more cash to cushion them from future losses. In addition, the report proposed increasing the competition between banks by making it easier for customers to switch providers. The protective measures are designed to “make it easier and less costly to resolve banks that get into trouble” ... »

Economic Slowdown Doesn’t Mean Another Recession, says BCC

Sluggish consumer spending and high inflation mean economic growth will be slower than expected over the next two years, but another recession is unlikely, the British Chambers of Commerce (BCC) has said. The BCC’s latest quarterly economic forecast predicted UK economic growth would be 1.3 per cent this year and 2.2% in 2012, down from its forecast in March of 1.4% and 2.3%.  Despite its pessimistic outlook, the BCC said it supported the Government’s tough fiscal approach to tackling the UK’s deficit and that a further recession was “unlikely”. “The Government has more to do if the private sector is to create new jobs, invest and export, and contribute to a lasting economic recovery in the UK.” said BCC director general, David Frost. “New regulatory burdens, business tax... »

BCC: Interest Rates Must Not be Raised in April

Revised government figures which revealed the UK economy is doing slightly better than expected are not a signal to raise interest rates, the British Chambers of Commerce (BCC) has warned. According to updated  Office of National Statistics (ONS) figures, the UK economy contracted by 0.5 per cent in the last quarter of 2010, not 0.6 per cent as previously published. The revision means that GDP in the fourth quarter of 2010 is now 1.5 per cent higher than over the same period in 2009. British Chamber of Commerce chief economist, David Kern, said it was reassuring to know the underlying position wasn’t as bad as feared, but that the Bank of England should remain firm on interest rates so as not to destabilise the economy. “We can be reasonably confident that the recovery will con... »

BCC: Negative Growth not Sign of a Double Dip

The UK economy’s first contraction in more than a year doesn’t mean we are heading for a double-dip recession, the British Chambers of Commerce (BCC) has said. As reported on Tuesday (UK Economy Takes a Hit in Q4) recent Office for National Statistics (ONS) figures revealed that the UK economy shrank by 0.5 per cent in the three months to December 2010, after four successive quarters of growth. The ONS said that the snowy weather conditions at the end of 2010 were a key cause of the slump. However, BCC economic adviser, Steve Hughes, said that even without the effect of the weather, economic growth would have been disappointing. “It would still have been a flat growth rate well below expectation. And that is before we factor in the challenges facing businesses in 2011, including the ... »

Economic Growth will Continue Next Year, says BCC

The UK has weathered the worst of the recession and the economy will continue to grow in 2011, the British Chambers of Commerce (BCC) has said. The business group made the comments following the release of the latest figures from the Office for National Statistics (ONS) on economic growth. The research in Gross Domestic Product preliminary estimate 3rd Quarter 2010 found that the UK economy grew by 0.8% in the third quarter of 2010 – double the rate expected – but lower than the 1.2% growth in the second quarter. “The results were better than expected in the third quarter driven by the strong manufacturing sector – particularly in construction,” said BCC spokesman, Steve Hughes. “Manufacturers have responded well to the weakness in the value of sterling and seem to be exp... »

BCC Comments on the Coalition’s first 90 days

The British Chambers of Commerce (BCC) has commented this morning on the Coalition Government’s first 90 days in power, reviewing the Government’s actions against points in the BCC’s own Delivering for Britain: A Ninety Day Plan for Business Growth (PDF). The BCC states that whilst there are positive and encouraging decisions being made by the Coalition Government there a still a number of areas where urgent action needs to be taken before the end of the year. The "ninety day plan", drafted before the May General Election, set 12 clear policy challenges for the Government in order to return the economy to good health: Public Finances Publish a credible plan to reduce the budget deficit and restore confidence Freeze public sector wage bill and reform public pensi... »

Revised Economic Growth Forecasts “more realistic”

Business groups have cautiously welcomed the Office for Budget Responsibility’s (OBR) move to downgrade the UK economic growth forecast for 2011, calling the figures “more realistic” than previous predictions. The new independent fiscal watchdog, created by HM Chancellor George Osborne to monitor public finances, calculated that the economy will expand by 2.6 per cent next year, down from the 3.25% previously estimated by HM Treasury in Labour’s last Budget.   Uncertainty over bank lending, an unstable euro and a fragile labour market were all cited as reasons for the downward growth forecast by the OBR’s chairman, Sir Alan Budd.  According to Confederation of British Industry (CBI) director-general, Richard Lambert, the OBR’s report brought a ... »

Small Firms Called on to Consult on Red Tape

Small businesses have been called on to give their views on local government’s regulatory enforcement priorities, in an initiative aimed at reducing the red tape they face. The call comes from Local Better Regulation Office (LBRO), the organisation responsible for improving how local authorities enforce regulation in areas that affect local businesses ― such as environmental health, trading standards and licensing. LBRO is also tasked with reducing burdens on businesses that comply with the law, while targeting those who flout it. The aim of the consultation is to determine exactly which regulatory areas, or priorities, should be focused on by local councils. By giving businesses the opportunity to influence the regulation framework, the idea is that any unnecessary administrat... »

Excessive Minimum Wage Rise Stops Firms Recruiting, warns BCC

Excessive Minimum Wage Rise Stops Firms Recruiting, warns BCC

Raising the national minimum wage by almost double last year’s increase will deter small firms from taking on new recruits, the British Chambers of Commerce (BCC) has warned. A minimum wage increase of 2.2% from 1 October 2010 for low paid workers aged over 21 was announced in this year’s Budget. This will bring their hourly pay up from £5.80 to £5.93. Last year the national minimum wage increased by just seven pence from £5.73 to £5.80. Low paid workers aged between 18 and 20 will also see a rise, to £4.92 per hour, while 16 to 17 year-olds will be paid £3.64 per hour. The BCC’s director of policy and external affairs, Dr Adam Marshall, said the wage increase took some of the shine off a Budget that had small firms at its heart. &ldquo... »

Business Groups Welcome Chancellor’s Tax Relief for SMEs

Business Groups Welcome Chancellor’s Tax Relief for SMEs

Business groups have welcomed tax relief schemes announced in the Budget to help small firms, saying that the Chancellor has finally recognised the need to put small business at the heart of economic policy. However, they expressed continuing concerns about the UK’s Budget deficit and its impact on business activity. “After two years of economic downturn, the Chancellor has clearly recognised the need to place business at the heart of the Budget,” said British Chambers of Commerce (BCC) director general, David Frost. “Doubling the annual investment allowance, help with business rates, and allowing entrepreneurs to keep more of their gains will prove especially popular.” “However, the Chancellor could have done more to set out a clear plan for the reducti... »

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