Sterling challenge for UK shops
Sales in a typical Next store, so called like-for-like sales, have fallen 7%.
To put it another way, the UK's second biggest fashion retailer is selling one in twenty fewer skirts and shirts in shops unaffected by new openings.
This sounds disastrous.
But investors in its shares may actually breathe a small sigh of relief that its performance in the last five months of 2008 wasn't even worse, given the gloom that's engulfed the High Street.
Also there's comfort to be had from Next's announcement that it's on course to make profits in line with City forecasts of more than £415m before tax.
At Debenhams too the theme is that it could all have been a lot worse, as the leading department store chain reported like-for-like sales down 3.5% in the 18 weeks to the beginning of January.
Although Debenhams is widely viewed as having too much debt, barring an unexpected calamity both it and Next will still be standing after the downturn in consumer spending which has exterminated weaker rivals.
What will particularly impress Debenhams' creditors is that the gross value of its transactions and profits have risen, the business is generating cash, and net debt has fallen
But it won't be easy.
Next warns that the coming headache will be a massive increase in costs caused by the sharp devaluation of sterling.
In Next's case this doesn't bite until the autumn and winter of this year, because it has hedged its currency exposure until then. For most big retailers, including Marks & Spencer, the big impact of the weakened pound will come in the middle of the year.
There will be a horrible choice for Next, M&S, Primark and the rest, who buy most of their stock outside the UK.
Should they absorb an estimated 20% currency-related increase in the cost of clothing and other goods manufactured for them in China, India, Hungary and so on?
That, of course, would mean that their profits - which are already on a crash diet - would be squeezed further.
Or, in a period of feeble consumer demand, is there any chance they'll be able to pass on the cost increases to cash-strapped consumers?
Their ability to pass on the costs to us will depend on the intensity of competition at the time.
Right now, with Tesco announcing yet another round of price cuts, there's no sign of an easing up in the competitive assault.
In fact, one of the reasons that the sales of Debs and Next weren't even worse was the significant discounting that took place in the Christmas fortnight.
Anyone who made the mistake - as I did - of venturing to a mall or shopping centre in late December will know that we haven't been wholly weaned off our spend-spend-spend habits.
There was a mob, frantically looking for bargains.
But we're all back at work now, the last Woolworths have shut their doors forever, and a chill wind is blowing through the economy.
Those who run our biggest stores tell me they're braced for the worst of winters.
Update 1243: The Times is, of course, correct that M&S is poised to announce around 1,000 job cuts. Details will be announced tomorrow in its trading update and the statutory consultation period will commence. But this shouldn't be seen as a savage and massive redundancy programme. M&S is the largest fashion retailer in the UK and employs more than 70,000. These job reductions represent less than 2% of the workforce.
Also, I didn't mean to imply, as some have suggested, that Next's figures include the post-Christmas sale (its trading update relates to the period up to and including Christmas Eve). What I thought I was saying was that it and Debs (and lots of other big store groups) benefited from a shopping surge in the holiday season (which is in Debs' announced figures, but not Next's).
I'm 
© MMIX~RS~q~RS~~RS~z~RS~42~RS~)
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Its unemployment that will stop the spend culture - that is the real looming problem. That or lowering of annual wages which is happening all over the economy. You keep talking about investors being happy with these results and the outlook hence the shares rallying - is that real you do not seem to discuss trading volumes which I understand are so low that there prices are hard to gauge as real or not in shares (much like houses!).
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invest in kiddie clothes + good food (to grow more) (kids)
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AlexCURZON
I watch OUT for your inspired
COMMENTS
daily in fact you are the OTHER
reason I read this BLOG
Keep telling it HOW it is and
don't EVER change.
Best of LUCK in RUSSIA.
keep a hat ON.
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Maybe they can start rebuilding the clothing manufacturing base in the UK as the costs abroad make it more viable now
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"In fact, one of the reasons that the sales of Debs and Next weren't even worse was the significant discounting that took place in the Christmas fortnight."
Get your facts straight Robert. Next have said they managed to resist discounting before Christmas as they always do.
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"Anyone who made the mistake - as I did - of venturing to a mall or shopping centre in late December will know that we haven't been wholly weaned off our spend-spend-spend habits.
There was a mob, frantically looking for bargains.
"
That Mob was market traders restocking thier stalls, unless you belive that a 50 year old man requires one jumper in 10 sizes 24 times
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Robert have you really talked to these retaillers or are you regurgitating what someone else has reported.
Retaillers are planning to raise prices and not discount and make more profit on less volume this year. you really need to get into some shaerholder meetings and listen
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Wow, it's black-ice out there, Bob, that was a nasty skid yesterday!
I was talking to some people who are fairly front-line in picking up on people dropping into the social security net in the West Midlands over Christmas, and they haven't seen anything too unusual.
As at this point, therefore, we've got the banks in intensive care, front-line retail in isolation with a nasty dose of economic ebola (haemorhaging at all the pores and nobody wanting to touch it with an economic bargepole) and the motor industry on the skids. However, much local industry seems to have diversified and is surviving, particularly with the export-friendly exchange rate.
If we invert this, the banks are causing troubles to otherwise healthy chunks of the economy. HMG wants to keep playing the bankers game, therefore they too are part of the virus and not part of the cure.
We can probably do with less retail to cut the net propensity to spend, and boost the governments green targets with fewer cars and less milage.
Which still leaves the nasty hangover of government borrowing, which has promptly cast us back into the dark ages of the City controlling the Government, the Ponzi scheme just sucked in the Treasury. The question remains, why should the City both be bailed out and retain the whip hand?
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nice attempt at nutmegging us today Robert: start off with the 'it could have been a lot worse and the stock market is rallying' statement but then neatly switch to the doom and gloom in the 2nd half of your post about retail prospects
I wouldn't take much notice of the current stock market moves though; the markets are complicated and largely counter-intuitive so you shouldn't be trying to talk it up or give tips. But I think most people are smarter than to believe the positive messages at the moment - for instance Chrysler sales in the US dropped an amazing 53% in December (most other carmakers had falls of 35% or so) because the potential buyer has already worked out that Chrysler are quite likely to be the first to go into bankruptcy and no-one wants a car with a warranty from a bankrupt company
words butter no parsnips
no matter how fine,
buyers and suppliers
beware in '09
I posted this link on the earlier blog but recommend it again, especially for all you people who are persecuting alexandercurzon; lighten up and have a smile:
http://www.theglobeandmail.com/servlet/story/RTGAM.20081223.wvbunny/VideoStory/VideoLineup/Life
the little video starts after the annoying Blackberry advert and you'll need to turn on the sound
it's an animated explanation for children of how credit works and why the financial crisis matters; though aimed at primary school kids it could be useful for explaining a few things to:
all politicians (except Vince Cable)
the bankers (as if they didn't know already ha ha)
the regulators definitely
everybody in Iceland (the country, not the shop where we're all going to have to buy our groceries soon, instead of at Waitrose)
Mr Peston if he continues too much with his positive reassurances
but not Mssrs Madoff or Murdle, who already understand how to take carrots away from rabbits, or alexander curzon whoever or wherever he might be!
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#7 PotKettle
Go watch the check-ins at Eurostar. If its market traders, they're selling on the quais de Paris, not down East Street.
I'd bet it's the same in Turkey, not to mention whether the Japanese have turned their suitcases into tesseracts with infinite storage capacity, which is probably why they never lift the things.
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I really wonder what this comment is about, almost verging on vacuous
Surely if these companies are on track for their forecasts then it isn't "news". Scare stories of worse to come must surely be backed up with facts although Crash has always managed to fudge those
The bigger questions need to be around when companies like Debenhams and Travelodge need to re-finance their debt
Then where they are likely to find the funding, if at all.
These companies make nothing, except maybe fostering low wage economies
The retailers are only a part of the economy, collecting the VAT, employing others who occasionally work sufficient hours to pay National Insurance (never mind Income Tax), and maybe paying Corporation Tax if they don't have "one off" costs.
News must be pretty thin on the ground,
Maybe you should take the opportunity to ask Mandy about his yacht appointment, might while away the time whilst you attempt to get an answer.
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I agree with #5. We have seen British manufacturing offshored to the extent it is no longer sensible.
Wages are rising in the far east, sterling is falling and oil will still run out (even if the price is down for a little while).
It will not make sense to ship shirts and jumpers halfway round the world, when they could just as easily be made here.
By 2040, almost everything we all buy will be "Made in Great Britain" again, simply beacuse the alternative will be prohibitively expensive (actually, it might just say "Made in England" by then, but that's another story!!)
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All retail outlets will put the squeeze on the staff levels and salaries. For example, one high st name who sells books and papers and stationary is already on that path by doing away with morning and afternoon paid breaks by informing staff that they are no longer paid breaks.
This petty behaviour will continue throughout the industry, counting on fear to impliment these type of daconian measures, inspired I must say by there own fear.
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#10
Alexander Curzon is what he says he is, I met him many moons ago and he hasn't changed much. For that matter, CEH seems to have disappeared again - he isn't what he says he is, he's a much smaller player and it's the second time he's overplayed his hand in the last few years.
That does not mean to say both don't spin the odd line to suit their own books on occasion.
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#2 - totally agree - Currently people are actually benefitting from more available funding (mortgage reductions etc) and due to Christmas the irresponsible high street spending has continued - once the credit card bills start arriving (ie now onwards) will be the first hit and then the redundancies will just continue reducing the spending down and down.
If costs for retailers are going up then I hope my spouse (and everybody else) have bought well in the sales because these may well be the clothes they will be wearing for years to come!
Business spending on the other hand stopped back in September in my experience and in many ways is ahead of the high street in the cycle.
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Next' problems run deeper than the current UK economic climate. Their clothing for men is always the same, they simply change the colour and shape of the print, nothing new encouraging me to buy the latest fashion, because they are out of fashion ...
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Why is anyone interested in the schoolboy economics of this Robert Peston, his unintelligent economic dribble usually adds nothing to any serious debate. The only reason the BBC use his is because when he speakes he gives a good Margaret Rutherford impersonation withjout any intelligent content. Dump him
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Retailers are planning to raise the sell price, reduce staff, lower stock and reduce lines.
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#9 Pot_Kettle wrote...
"Retaillers are planning to raise prices and not discount and make more profit on less volume this year. you really need to get into some shaerholder meetings and listen"
Well that's what they (and you, as a shareholder) would hope for. But will they be able to do it?
The long Christmas break with time to think, the cold weather and a downbeat return to work has chastened the spend-spend-spend thinking in some of the people I know. They've only just cottoned on to the fact that there really is a recession, rather than a story you see on TV about the US car business and, heck, they are in it.
I've noticed something else this time too. Just how long it takes to re-engineer the normal family economy for harder times. Is that just a result of debt, or the fact that we have been stuck in a rut for so long and vegetated? Whatever.
The retailers have had it easy so far - I don't think price hikes will stick in the game we're entering now.
The good news is that our thinking is ahead of the good people of the Eurozone. They are 2 months behind. Use the low pound to sell them what you can before they catch up.
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#13
There is a further corollary: HMG should offer exceptional tax breaks for retooling, I would suggest accelerated depreciation scales as a perfect way of achieving it - it has the odd effect of suppressing profits while in a depression, but then again, itùs a good time to hide bad news. Nanjing Automobile were incapable of building a modern production line, they had to buy one in, but it wasn't new even then and they don't have the nouse to do it again. We've now got the opportunity to start with new kit, if the government will only allow it, and that can give us a critical whip hand on the way back.
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2009 will be a severe test for the 70% of people in the UK, who surprisingly continue to believe that sterling is a better option than the euro.
At the moment the inflationary effect of the 30% drop in the exchange value of the pound, is masked by retail price cutting and the fall in world commodity prices such as oil.
But unless the MPC can reverse this fall in exchange value by a timely increase in bank rate, or the government can summon up the courage to go for Eurozone entry, serious, probably double figure inflation, will return in the coming months.
This will slow recovery from the recession and the UK will be back in the stagflation of the 1970's, and this time there will not be the prospect of new North Sea oil production to pull us out.
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@13
"made in Britain" raises other issues then like where do we get the raw materials. China have been stock piling, we used most of our raw materials decades ago.
So Cow hide clothes and sandles and wooden clubs for us. I'm off to buy a herd of fresians
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How much debt is "too much" in the case of Debenhams?
Is it >GBP1bn?
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Sal 196
"By 2040, almost everything we all buy will be "Made in Great Britain" again, simply because the alternative will be prohibitively expensive (actually, it might just say "Made in England" by then, but that's another story!!)"
Are you suggesting that by then England will be a third world country? On the basis of the rapid descent under Gordon Brown away from the private sector and the growth of the public sector I think you're spot on.
We could also be riding around on bycles because we can't afford a car.
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@14
"doing away with morning and afternoon paid breaks by informing staff that they are no longer paid breaks."
Surely that is illegal in health and safety law?
Of course if the employer wants to go down that line you could always work through the break and leave earlier leaving them with no staff when you have all completed your contracted hours early.
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Bert
have a think about it for godssake
how many businesses would be delighted with a 7% drop in turnover - plenty
these type of retailers are not even a good economic indicator and no doubt if they go wrong they'll pre pack, bin the lot and keep the good trading units
you also missed the sterling bounce - what next?
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Not bothered updating the blog from the original news report!
Still of the opinion that a 7% fall represents 1 in 20 less sales?
Surely 1 in 14!
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Has anyone seen the way the Guardian has reported the same story? The facts are, of couse the same but the tenor and insight are so very different. Does the bbc actually enjoy reveling in negativity and disaster? It certainly feels like it. Shame on you and Mr Preston alike for lowering youselves to tabloid standards of journalism...
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In 1992 Gordon Brown said : 'A weak currency results from a weak economy, which in turn arises from weak Government' It is ironic that in 2008, Brown's first full year as PM the Pound lost more value than any year since the Gold standard was dropped in 1931. By Brown's own logic, his is the weakest Government for 77 years.
If devaluing currency was good for an economy then Zimbabwe would be the richest country in the world. It isn't.
As Anne Robinson might say: 'Gordon - you are the weakest link - Goodbye.'
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I popped out to our local Super-mall (Cribbs Causeway in Bristol) over the break. Although it was busy, people didn't seem to be going mad.
Add to the fact there was a lot of hype about the mad sales and prices being slashed (which didn't seem hugely to be the case)
I think for a lot of people it was a case of 'lets buy stuff we need and want now', but then stop for new year and watch the pennies.
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Being allowed enough finance for growth by a bank manager will be the singular objective of all business alrge or small .
The scenario of customers madly giving profits away and having to restock at inflated import prices is simply not a good proposition as far as a lender is concerned
David Cameron has focussed on lending guarantees which will help but bad business remains bad business and should be allowed to wither .
Unfortunately the good ones are caught up in the melee and will also suffer so the upswing will be delayed longer than necessary.
It might help if retailers were to try to sell us something in a well trained and cheerful manner.
Those of us with money to spend want service and a simple human response that we are important to the seller.
Stores need to adapt to be a hybrid of sales and internet pick-up point.There are simply not enough white vans available to deliver the potential groth from this area .
Britain is a bright ,lively innovative country deserving of better than the drones who run business and government at present
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The only thing that surprised me with the Next results is the fact that sales have only fallen 7%. When I was in there recently, I thought the clothes they had (menswear, at least) were dull, dated and overpriced for what they are.
In my opinion, there is much better value/choice to be had elsewhere.
At 36 years of age, I think I'm still just about in the age range that they're targeting but their clothes just AREN'T that appealing any more. Why anyone would want to queue up at 5am for the opening of the sale, two days after Christmas, is beyond me.
I think there's a very real threat that they will find themselves in the same position that M&S's clothing was in a few years back before they introduced new lines and got rid of some of the non-visually-enticing clothes they had on display.
With things in general set to get tougher for Joe Public for the foreseeable future, I think the likes of Next are going to find it hard to hang on to it's existing customer base as consumer spending falls dramatically over the coming months - especially when cheaper alternatives can be found elsewhere.
Off topic (going back to yesterday's Bull in China Shop post), it occurred to me that Waterford Wedgewood was the second commonly abbreviated WW story (after WoolWorths) - I wonder where/when WW3 will happen?
Didn't World War Two signal the end of the last 'severe' economic downturn???
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#12, You seem to be the only one, so far, who has hit the nail on the head. The real story of 2009 is NOT how the retail sector managed to survive Christmas. The MAJOR story for retail and manufacturing will be how their debts will be re-funded.
If their is any comfort in the coming debacle it is that we will finally see the perilous state of non-government sectors of the economies of our European neighbours. We may have led the way but Europe will soon be seen as feeling the pain as well.
Please don't take too much notice of the Stock Market. For all their much vaunted professionalism they are acting in their habitual way - a gang of headless chickens reacting to everything that comes into their focus.
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#25
By suggesting that by 2040 "Made in Britain" will be back I wasn't trying to suggest Britain will be a "third world country" in the manner that we have them today i.e. some countries very poor relative to others.
Rather I expect to see wealth more evenly spread. US/UK will see standards of living fall, China/India will see theirs rise.
Chinese and Indian people aren't inherently better at manufacturing things than British people. It's just that currently they are currently willing to do so for less money, and thanks to cheap oil we can ship the stuff over here and it's still cheaper than making it in the UK.
By 2040 our wages (in real terms) will fall, theirs will rise, and transport will be so expensive that no-one would consider making goods like everyday clothes so far away.
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An interesting ob from the "other side" of the exchange rate is that here in Dublin there is only weak evidence of passthrough from lower sterling.
This is despite a slowdown in consumer spending and major competition from Northern Ireland.
This is consistent with lower exchange rate passthrough worldwide and suggests that it will need a really jolting shock to change retailer behaviour.
Maybe we will get it. But for now the model of exchange rates being felt in profit margins rather than prices looks surpriisingly resilient.
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Rahere & Curson... never in the same room together!
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I am concerned about all the overly negative comments about the economy and Robert is particularly good at this. It is slightly daily mail type of journalism.
when I read papers abroad the press do give a more balanced and try to be upbeat where possible.
the affect of the banking crisis and recession will be worse and self forfilling if the following measures are not taken
1. The banks are acting like children hording their moneytaking money in and not lending in order to build up their balances and pay of debts too fast. People and good businesses still need to borrow money and if this is withdrawn tthen the loans the banks already have will turn sour as even good businesses go to the wall and their creditors then have problems and so the bad debts and recession becomes self propagating and the banks will loose even more money
The Pathetic banks and their managers need to be forced to loosen the strings and be reasonable to businesses.
2. It is without doubt house prices were growing too fast fuelled by the stupid lending policies of the banks. The lending does not now have to stop but be sensible.
By closing down the money sources people cannot buy houses so the prices continue to fall and more peole go into negative equity and the banks lose more money and the recession in the housing market will be self perpetuating
The Pathetic banks need to be reasonable in their morgage lending if they do not want to depress the market further and lose even more money in the long term. Once the market stabilises the overall sentiment of people and the markets will change after all there is a shortage of houses in the UK
people are just waiting to step back on.
3.The sentiment of the population is affected by many elements not leased what is given out day by day by the media. you cannot tell me that all of a sudden people no money compared to last year, it is just they are worried about spending and who wouldn't be after listening to the news. If people stop spending inevitably goods are not bought and manufacturig goes ever more into decline that gets reported so is self perpetuating. If we all carried on spending then the recession would be short lived.
It is therefore vital that the media reporters to report the news in a balanced and factual way with less throw away comments such as 'ITS going to get much worse' at the end of the report. Every effort must be made to be positive in outlook to boost confidence and turn this situation around. Does Robert want to be responsible for making a bad situation worse? Please try to smile and be positive and use your influence in a positive way by putting the spotlight on the banks until they change.
All the best and have a great new year everyone!
3.
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The idea that we can simply start making things and avoid the problems of a weak pound is not well thought through.
What about the cotton or other raw materials to make the clothes. We would still need to buy much of it from overseas. And even with the fall in our currency our labour costs are still far beyond those in China.
Even where raw materials do exist we would then have to look at our energy costs which are heavily influenced by our currency. Oil and gas are related to $US.
In any event who is likely to invest in new manufacturing capacity when surplus ready capacity is falling idle even in China.
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25. At 12:21pm on 06 Jan 2009, skynine wrote:
By 2040 ...."We could also be riding around on bicycles because we can't afford a car."
Oh yes please! That would save the few thousand deaths and serious injuries each year that we as a society deem is a price well worth paying for our selfish, fully-mobile lifestyles.
I never bothered to learn to drive, cars are old technology powered by a finite resource. My bike is powered by me, whether I am fuelled by beer, bananas, mars, kebabs, cheese and pickle sandwiches or a plate of pasta. Just need to regularly service the legs and eyes.
Now I admit you need the plant, materials and technology to manufacture a bicycle, but its sure using up less of each than it does to make a ton or so of metal and plastic. Though when dumped on waste ground at the end of its useful life, a car certainly makes a very good home for bats...
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Well, this is a good time to buy british - not just for us, but the world.
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The sensible retailers used Christmas to dump surplus inventory at high discounts in order to release cash into the business. They will reorganise, cut headcount, cut stocks, close the weaker stores, reduce costs and manage their supply chains very tightly.
The foolish retailers will run about banging their chests like insane gorillas until they go bust.
This will be the pattern for all business, including banks, for the next few years. Cliches about men, boys, sheep and goats apply.
I leave it to the shareholders to select the winners and losers.
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rahere post15
St Helens Bishopsgate I GUESS?
Or Lloyds of London pre 1985?
Re Sterling Crisis
We marked up product costs 9 months
ago for 2009 production.
Gordy: Inflation i see no INFLATION??
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There will undoubtedly be more stories in the next few months of manufacturers and retailers cutting cost through wage freezes and reduncancies. What I have yet to see is any evidence that the public sector (except at the MoD) or the banks are prepared to cut costs. We all know how much fat and wastage there is in public services, but there must be an equally spendthrift culture in the banks, after so many years of huge profits. After all, those mega bonuses and lavish entertaining are just symptoms of a cavalier disregard of costs. Of course, politicians have no stomach to reign back the client state, but the sad fact is that the lavish bank bailouts have removed much of the incentive that should have been there for the banks to reign in their costs.
Noone wants to see other folk lose their jobs, but if the economy is to be rebalanced then some of those clever people currently inventing new types of mortgate securitization should be reemployed in the real economy, creating real wealth.
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17. At 12:14pm on 06 Jan 2009, jamesthehoof wrote:
"Next' problems run deeper than the current UK economic climate. Their clothing for men is always the same, they simply change the colour and shape of the print, nothing new encouraging me to buy the latest fashion, because they are out of fashion ..."
That sums up men's fashion full stop! Men aren't very adventurous and the market suits that premise, T-shirts made by Bench have the Logo 'Bench' blazoned on the front this season, next season the same but maybe a slightly different colour, season after that the font will be reduced 5% in size... Jeans will be blue with thin legs, next season, bigger pockets and the stitching will be more visible!
In fact fashion is dead and has been for years, just regurgitating the same ol' same 'ol - the last decade with any truly new styles was the eighties (and most of that decade was still filled up with hark backs to the 30's and 50's).
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#10 Happy New Year me old hearty!!
Very good link! I agree with your other points too. Disagree each other's opinions folks - that's how we all learn, but leave out the persecutions.
I find it interesting that some people who have a go at Alexander Curzon themselves hide behind pseudonyms.
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I went to M&S in the post-Christmas sales to buy a new suit. They had closed their fitting rooms and put a sign outside saying that they were closed "in order to serve you better".
If they think that not letting me try clothes on is better service, then frankly they deserve to go out of business.
I hope that one positive aspect of the current recession is that the incompetent companies will go out of business and natural selection will ensure that the businesses that come out the other end of the recession will be the ones we want to buy things from.
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I presume Steve W was censored for being off topic, but it was a VERY interesting article - WELL worth a look folks. Google "Harry Markopolos" plus fraud and you'll get there quicker.
- I've only skimmed it so far, but it is frightening. It confirms Galbraith's view that "Speculation buys up .... the intelligence of those involved."
It also shows that the SEC did not have the expertise to investigate a detailed complaint.
Back to the sterling decline - another of Galbraith's views, based on the 1930s, but still true today: "The British Economy is inherently more difficult to manage than than, say, the French, because of its dependence upon imports.
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@40 Thornton
Come on I've already spoken with you about this. Its only in urban conabations where a bycycle or public transport is viable.
That rules out most of the country.
And in true blogger tradition I am going back way back to discover the route cause of public transport woes and put the blame firmly at the door of Beeching.
His study into line utilisation was ill timed and took no account of how mainlines were fed there traffic.
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re philthetooth
"The Pathetic banks and their managers need to be forced to loosen the strings and be reasonable to businesses."
Forced by whom? The goverment? Banks are there to make profit, simple as that. They have lent money out recklessly, supported by interest rates that have been too low - thanks to government policy (CPI). Now banks are able to pick up assets cheaply as borrowers default. A nice trick if you can get away with it.
Government should never be involved in private businesses. There should have been no bail out. Banks have no morals, they are not designed to have any, and we should not expect them to have. They should have been allowed to fail and the bad debt liquidated.
As for reporting, this should be as the reporter sees, or is paid to see, the situation as. Just asking for a positive spin all the time is naive - like AAA ratings for companies on the verge of bankruptcy.
Stop looking to the government to sort out all your issues, they are the problem not the solution. Try freedom - you might like it.
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#12
While both may have refinancing problems, I think the trading prospects for Travelodge are somewhat better than for Debenhams. Debenhams sells overpriced, discretionary spend type products, whereas Travelodge sells a very good product that people who are travelling actually need at a budget price. I stayed in one down south this last weekend which had been refurbished. It was comfortable and cheap, with a very good quality bed - better than before - all for £9 a night.
#17 and #33
As to Next, I couldn't agree more. What a load of outdated, boring, stock. If they survive the recession, it will be a miracle. I am surprised anyone still shops there.
Having just been down south to the Bluewater shopping centre in Kent, I think the English are getting a really raw deal on the retail front. With the exception of Madhouse, who were selling their products at the same price as up here in Scotland, the rest of the retailers had "sales" prices that matched our Scottish non sale prices. For instance, Waterstones were selling annuals, on "sale" for 25% more than the exact same item, also on sale, up here.
While Bluewater had plenty of people wandering around, checking out the post Christmas sales, I wouldn't describe those who were there as a "mob, frantically looking for bargains". Quite the opposite. People seemed to be keeping their hands firmly in their pockets. New Look, for instance, surely better placed than Next to survive the recession, had all of five customers in the ten minutes we were in there. Hardly a buying frenzy, is it!
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I'm fed up with all this negativity - there are loads of positive things happening all over the UK if you bother to look....but that doesn't attract an audience. We know that there will be loads of job losses in the next few months (sorry for all those who lose a job) but how much of it is the herd instinct and the opportunity to get rid of the poor performers? If we end up with 15% unemployment (heaven forbid) there will still be 85% people employed and if you don't NEED to move house the change in value won't make the slightest bit of difference. Most of us have got more £'s in our pockets now as a result of interest rate changes etc so let's crack on and make the best of what our political and banking masters serve up for us. A lot of what we get is down to us!
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It strikes me that the length of time that is being taken to moderate posts that there is a requirement for more moderators???????
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Dear Robert
Whilst I would agree that there are going to be tough times for certain sectors of our economy, I would really like to have a more detailed overview of what is going on out there. All we hear about is how a handful of companies are doing (usually badly) from disparate industries and when put together how this means doom and gloom for us all.
Even good news seems to come across as near disaster - or is it me?
What has happened with Next is what we can expect for a lot of companies in 2009 - sales down, but profits up, largely because of cuts to the work force.
One thing I learned about Keynes was that people can talk themselves into a recession. I just wonder to what extent we are doing just that...
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Robert
Do you think that everyone
a) works?
b) has a mortgage?
c) has their own home?
Huge numbers of people
a) have company or final salary pensions from government jobs
b) own their home outright
c) live with mum and dad
d) inherited money from family when houses were sold in estate sales
e) didn't borrow more than they could afford
f) don't move very often
If these people are squeezed its because of substantial increases in taxes including council tax over the last few years and a government that uses the word investment when actually it is spending.
If they aren't squeezed and they aren't spending its because there isn't anything they want to buy at a price they are prepared to pay.
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OK, the pound is weak at the moment, but remember those foreign manufacturing operations still need to shift product and acquire hard currency. This means downward pressure on factory gate prices, and meanwhile it is likely sterling will bounce somewhat as other economies own up to the truth. Meanwhile, doesn't it show the folly of successive governments (but let's not excuse this one) undervaluing and insufficiently supporting domestic manufacturing. Remember when M & S made a point of souricng its products in this country, and the lament when they announced they no longer could afford to? In timehte tide must shift, as costs rise abroad, so why not grasp the nettle and start investing in our industries? That seems more likely to promise a sturdy future economy than monkeying around with banks.
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post 10 somali pirate
Enjoyed the link Send it TO GORDY??
HE MIGHT LEARN HOW BANKS ETC
WORK...........................?
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My wife runs a single outlet independant retail business in a secondary position in a small city. Sales in the six months to the end of December were 2.5% up on the same months last year and thanks to careful pruning of the ranges stocked margins are better.
However, with most of the products sourced from within the euro zone because we do not make very much in UK anymore there is a real headache facing the business as input prices rise. I think they will be passed on to customers who will accept that if they want these high quality products they will have to pay more.
Keeping on top of all the factors in play at present requires intense vigilance.
We look at the figures issued by all the large businesses going into administration and wonder what their managers do all day
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Retailing is not all about the square footage on the high street any more just like news isn't just about the print on paper and recruitment isn't about the high street either.
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evergrowingbrain post 4
Thanks for the CHIRPER.
TRYINg not to USE too MANY caps.
I usually get GOT at FOR thaT?
Go to the Somali pirate post 10:
GOOD link there.
HEY THERE GORDY SEE IT HEAR IT:
STERLING TRASHE! thanks?
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#48 sashaclarkson .... I think it got pulled because it links to a downloadable file, which breaks house rules. You can link to just about any web page you want, but PDF's are a big no-no.
It can't be for being 'off topic' - the major discussion going on at the moment on 'Preston's Picks" is whether A.C. is real or not and was he really in Moscow yesterday, and it doesn't get more of topic than that !
What astounded me about the article was that Markopolos states that he is one of the few in the world who understand all the maths involved, and then uses the literary and mathematical talent of a sixth former throughout the article. He is obviously knowledgable, but brainy - I have my doubts. And if he is at the top of the pile of the financial services industry and the only one capable of spotting Madoff's fraud, then God help us when the whole mess starts to unravel.
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Want some good news? Well come on in the waters fine. Or at least it could be if we take action now.
For the last 25 years the economy has been directed towards maximising consumer spending. Now is the time to re-focus the drivers of our economy. It's too late for us not to feel the pain in 2009/10 - including the lauded (well on here!) Mr Curzon. There will be blood all over the carpet. Therefore we will need government to take the lead by investing in strategically important firms and sectors.
We need to change the whole emphasis from the bean counters who have destroyed British business towards individuals who can build Value in their enterprises. So, if you want support you have to sign up for a guaranteed R&D spend. Somebody above suggested a re-tooling tax holiday - well that's a start.
Let's be honest, we are energy poor. So let's build nuclear stations - but we need to build into the contracts demands for measures that lead to us regaining the technological edge that we once enjoyed in the sector. We still sit on a huge resource of coal (Oh no I hear the tree huggers squeal!)
Well let's use it - it makes strategic sense. BUT we also invest heavily in the increase in the effectiveness of scrubbers. let's invest in wind and tidal energy BUT demand increases in effectiveness. let's invest in a British motor manufacturer BUT demand development in electric or fuel cell cars. Wherever we invest the State must demand a tangible increase in effectiveness and therefore true value - not just short term profitability.
Sorry boys but that means putting the accountants back in the supportive role that should always have been their place. It means a whole new set of thinking from the City and the Government. It also needs a whole new approach to how we manage our enterprises.
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61, 48 and all the other 'doubters'. I can assure you that Alexander Curzon is very much real. Wether he's as rich as he makes out I wouldn't know but I very much suspect that he's probably richer and uses good accountants to mask it from the tax.
Alex? Did you ever go to the 'Exiles Club' in Richmond? Is it still in business even?
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#55 MrsBloggs
Superb. why does the beeb think it is speaking for everyone in this case?
The reason is because if you work for the BBC you are very likely to be in all 3 of the categories.
I've said it before - as someone with a mortgage (which I can afford) and no need to get any more debt, i'm selfishly enjoying the current climate.
I won't be saying that when I lose my job, (and i very much feel for all those who will).
Or when interest rates shoot up, because someone might eventually notice that cheap borrowing is no solution to a problem caused by cheap borrowing.
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Re the transport debate. I think a husky/skateboard combo is probably more ecologically sound than a bicycle option. If things get desperate, the husky could also be considered an fmcg, literally.
On a slightly more serious note...
Irrespective of the recent sterling bounce. Most currency commentators seem to be predicting a steady rise in sterling v the euro this year. There are expectations that euro base rates will drop further, and irrespective of that, whilst we are all confident that our economy is ready for cremation... it seems that our continental friends are all performing the last rites on theirs too.
Phew. Speaking as a lemming, I find it reassuring that others are jumping off the cliff with me.
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#52 is fed-up with negativity...
I applaud your desire to be cheerful. But the whole point of recessions is that we ALL have to be thoroughly miserable for a while.
Then one morning we ALL wake up, the sun shines and we ALL think "I'm bored with being miserable - I want to be happy". And that morning everything starts to get better.
Economics is, after all, only the combined study of psychology and money/trade.
Sorry if this sounds silly, but having been here before, it seems to me to be nearer the truth than any amount of economic analysis.
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I too was surprised that sales were ONLY down 7%.
NEXT is a had been. Its now outdated, and lets be honest here... massively overpriced. Not just a little.. but massively.
M&S undercuts NEXT these days on price, and shops like Burtons/Top Shop/Top Man/Primark make NEXT prices look like Gucci.
I know its a simple example but a bunch of socks in NEXT is £10. In Primark its £2, and they are identical.
NEXT deserves a slap for ripping us off so much.
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#46 and 48 sashaclarkson
aaarh and a happy new year to you too
more to the point, the SEC clearly didn't WANT to investigate a detailed complaint; I
wonder if the failure to regulate would be as bad here in a similar case; we might just find out this year: an ebbing tide exposes all the rocks and wrecks not just some of them
quoting Galbraith again, on the 1929 crash and subsequent Depression:
'One of the oldest puzzles of politics is who is to regulate the regulators. But an equally baffling problem, which has never received the attention it deserves, is who is to make wise those who are required to have wisdom'
for those bloggers who are truly pessimistic about the UK situation, sterling etc perhaps they could try the Madoff solution: convert all your money into portable property like jewelry and then mail it to your relatives somewhere else! good for the Royal Mail too
my loot remains buried on a beach
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Robert
What an appalling way for staff at Marks and Spencer to find out from the news media that there will be 1000 redundancies. Now they and their families will have to wait an agonising 24 hours to find out which parts of the organisation will be affected.
The proper way to proceed is through departmental managers relaying the information to staff within the company. This happened to me when the pension company I worked for announced substantial lay offs, so at least everyone knew where they stood.
Shame on all the news media for reporting this and that includes the BBC. Quite disgusting really.
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Look at things on a global scale.
We shipped jobs from Britain to abroad, as foreign workers were cheaper.
It is therefore cheaper to buy abroad.
There aren't enough jobs in britain.
Britain gets unemployment
Britains are willing to work for less.
production moves back to britain, as costs are less.
eventually - all worldwide workers will end up earning the same wherever they are - due to free market forces. Trade deals and national governments can control things of course, but if the price is high, why should anyone pay it?
Globalisation means our status as one of the richest nations can't continue. if it is cheaper to get something in from china, then the british workers are over charging...
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When big chains of retailers inevitably fail, they're going to unload tens, maybe hundreds of thousands of twenty somethings with no useful qualifications and whose only experience of work will have been in retail.
Add to that the fact that these people, particularly of that age (their entire adult life has been spent under a New Labour mentality of financial recklessness) tend to have no savings, massive student debts accrued from a 3 year "media studies" type course and max out their credit cards like it's the cool thing to do and it's apparent that another economic disaster is on the horizon.
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#62. foredeckdave wrote:
"We need to change the whole emphasis from the bean counters ... towards individuals who can build Value in their enterprises"
hmm,
But without the 'bean counters' how will you know if "Value" has been built?
Rather, it is my view that the rules the accountants apply need a thorough review to ensure that there is a greater correlation between the longer term aims of society and the rules that are applied to business and finance.
Simply slaughtering accountants, whilst it may be satisfying in itself, misses the point and that is all that they do is apply the regulations and rules that the state dictates.
Further, you rightly point out that there is a lot of coal and see that scrubbers, which I take to mean carbon sequestration equipment and associated technology, is developed. I am not convinced that any of the proposed technology solutions will, or do have the potential to actually provide an economic, or even an effective solution.
I fear that the energy required to run carbon sequestration is greater than the energy output from the coal from which the carbon needs to be sequestrated.
I also agree that propping up dead end luxury car manufacturers is an unwise use of tax payers funds.
I am all for Nuclear and Tidal (Severn and Cross-Channel) Barrages, but both had better make energy economic sense (see my point about coal)
I cannot however accept that the role of actually doing the sums properly should be forgotten as you suggest.
There is a huge sense of pride in the UK that we can't do sums and it is a national disgrace and humiliation.
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@69
How naive!
Do you really think that the staff of M&S hadnt long ago been informed that job cuts were coming after Christmas?
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#62
Some excellent ideas on growth areas. Britain could really be a world leader in these areas, particularly energy. Now more than ever we desperately need to be energy independent. Russia has shown that it is just not reliable and is willing to play fast and loose with its obligations.
Instead of fannying about with a second bank bailout, ID cards, bungled NHS computer systems (and thats even before they go live!), trying to prop up a crashing housing market, this is exactly what our government should be doing - investing in more stable and futureproof technology. But that has been the perenial problem with a chain of successive governments - money is spent, but it is spent recklessly and without ensuring good value is obtained.
I'd agree with your entire post if you replaced the word accountant with financial services drone.
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#70 - your point about a flat economic world is of course ruined by different treatment of employees around the world - only with equal regulation and rights will we truly end up with a 'world' economy - I wonder if some of those joinging the dole queues would agree to waive all their rights to get a job; of course this would not be legal and would not stand up in court but the point is that we are not competitive because we are operating under different rules - our houses getting cheaper will not change that fact.
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I have been to my local shopping 'mall' today. Lots of people but no seems to be
actually buying anything.
One reason could be that the shops do not seem to have that much stock on the racks and shelves, so even if you want/need to buy you can not find anything.
My local John Lewis has a very poor selection of winter coats, when I asked an assistant if they had sold out their winter stock she told me that they had not had as many different designs in as in previous years. Obviously they were afraid of overstocking and being left with a load of winter stock which they would have had to reduce to get rid of.
Same problem seems to have hit Laura Ashley. I reckon the Spring stock will be pretty thin on the ground too!
The shops have an Eastern block feeling about them!
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#60 alexander curzon
ok i'm sending a link of the post #10 carrots/rabbit explanation of economics to Downing St FAO not only GORDY and ADarling but also my neighbour, the gorgeous Yvette Cooper
hopefully once they've read and digested it they can start getting this country back on the rails
Yvette can also read it to her kids at bedtime (I know she has some fans on here)
She's conveniently married to Ed Balls, who I believe is still in charge of our schools syllabus, so perhaps a general roll-out at key stage 4 will follow
PS: anyone see what Obama is saying about upcoming US unemployment figures - at least he seems to be calling it straight on the economy; shame he isn't doing the same to the Israelis about Gaza yet
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60 alexandercurzon
Keep it up with the CAPS, prefer to think of you as a CAPitalist. Its become your brand. Keep posting, You draw the fire and I am sure that having spent some time as a secondhand car salesman you can take it. Anyway anything is better than the gloomsters.
65 milkyboy
Dont understand the desire to jump off cliffs, base jumping is not my thing. Anyway things look fine. Oh forgot - you can't be happy or at ease in 2009, a new crime.
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If you have booked a holiday for July 2009 - would anyone buy their Dollars NOW or LATER??
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I agree 100% with Watty2000 (#71).
On a personal note, I was actually looking forward to some serious UK deflation to reduce my Student Loan repayments as it is linked to RPI......but no! There is a get-out clause which means the Student Loan Company can charge either RPI or another (rather LIBOR-esque) figure, WHICHEVER IS THE HIGHER!!!!
Should have read the small print. I wonder how many 18 year old Freshers actually do? I wish Bobby P had been around 10 years ago to tell me to consider PRINCIPAL as well as INTEREST repayment :(
Seriously, I firmly believe that there is an emerging demographic crippled by "graduate" debt, but with no "graduate" job to compensate.
If I could ask Gordon Brown 2 questions they would be:
1) How many graduates are there?
2) How many graduate jobs are there?
...actually let's say a final open question;
3) Any thoughts??!?!?!
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65. At 1:55pm on 06 Jan 2009, milkyboy wrote:
"Re the transport debate. I think a husky/skateboard combo is probably more ecologically sound than a bicycle option. If things get desperate, the husky could also be considered an fmcg, literally"
Excellent idea! But what is an fmcg? Something about a free meal?
49. At 1:12pm on 06 Jan 2009, Pot_Kettle wrote:
"@40 Thornton
Come on I've already spoken with you about this. Its only in urban conabations where a bycycle or public transport is viable.
That rules out most of the country."
If you go by square miles I would agree, but my guess is that well over 90% of people live in reasonable centres of population (say over 3000 folks in a cluster) which have fair to good transport links if you choose to work with them rather than base your mobility on already having a car.
More on topic, I did go to some big London retail centres both before and after Christmas and like Robert I found them madly busy, though only a minority of those splurging the GBP on designer gear looked like resident Brit taxpayers.
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Its unlikely that any of these stores have paid for their 3rd quarter stock yet so the original cost would of gone up by 25-30% as well as they come to pay for it. This will hit Q1 even harder.
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#52
I agree there is too much negativity.
I work as an R@D Engineer for a company that sells 90% of its product abroad. The product is a mixture of extreme Physics/Engineering and software. The company is comprised of 80 people of which 35% is R@D, 10% Admin and the rest is manufacturing and testing. We have had a record year and the order books are full.
The falling pound is a real bonus as our product is very cheap to sell abroad. Marketing suggests that only 15% of the market has been scratched. Our only real competitors of whom there are two who can make what we manufacture are in a similar position.
We punch well above our weight in the UK for innovative Physics and Engineering products and as much as I want to see the back of this appalling Government they have invested quite a lot of money in Physics for which we as a company have benefited to develop stronger products.
If we are to survive as a serious trading nation we have to start making things again. I am afraid kids may have to start 'binning' the soft degrees in Media etc and concentrate on the serious end of the knowledge economy in Physics and Engineering. We are a lot more resourceful in this country than a lot of people will have you believe. Our kids with the right training and guidance and the huge resource of learning available are not cleverer than what we think but are actually cleverer than we can imagine.
If a poor working class kid from a council estate who left school with two O levels can make it then any one can. It just needs hard work and application.
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regarding the #10 carrot/rabbit link forwarded to HMG, as suggested
---------- Forwarded message ----------
From: postmaster hm-treasury.gsi.gov.uk
Date: Tue, Jan 6, 2009 at 2:49 PM
Subject: Delivery Status Notification (Failure)
To: somali pirate
Your mail message has reached HM Treasury but could not be delivered because the recipient name below was not recognised.
Delivery to the following recipients failed.
yvette.cooper@hm-treasury.gsi.gov.uk
oh dear; I hope there hasn't been a reshuffle as I quite liked Yvette's feistiness; I think my emails to Ed and Alistair went through though so maybe Ed can pass it on to her
GORDY doesn't seem to have an email address any more; they say he was getting too much advice
you see there are aspects of recession that have comic potential
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@83 Mark
"If a poor working class kid from a council estate who left school with two O levels can make it then any one can"
Unfortunately not even a Newton can make it in this countries current dumbed down education enviroment. Even the degrees in real subjects arent quality qualification these days.
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If the big retail chains are cutting back we could see some pretty miserable looking shopping malls by the end of the year as many of the smaller retailers go to the wall.
Everyone is concentrating on the housing market but I certainly would not want to be an investor in the commercial property market.
Another problem for the banks and the government who will not be collecting their huge business rates.
Bottom is nowhere to be seen.
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Is it me or does Robert Peston look like Robbie Rotten out of CBeebies Lazytown. They both are pretty scary! Keep up the good work Mr Peston.
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#80 livewithinmeans
I completely agree about the graduate timebomb.
Think about the "average" graduate:
- By 21 will have £15k debt
- Needs to get a job to pay off £15k debt
- Then needs to start paying into a pension
- Then needs to save at least £15k to put a deposit on a house!
You are talking about paying back/saving £30k AFTER tax just to buy a terrace house where I live! That's the kind of money some people of my parents age save in a lifetime.
It's completely impossible to do if you're starting on a "reasonable" graduate salary of say £18k... and I assume there's lots of graduate jobs paying this now?
This is going to leave a lot of people with the attitude that debt is perfectly normal and their peers all have it. It also means that in years to come, all this debt is going to hit home.
It's wrong.
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@86 Virtual
I am sure G.O.L.D are re-running Bottom
Richie and eddie are so funny.
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86 virtualsilver
Construction : (
Some high st retail : (
Financial sector : (
HMG revenues : (
Gordon Brown : )
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62
Well said - we need to reinvent Britain as a cutting-edge economy. To your suggestions, I would add that, if hand outs are to be made to car manufacturers, it is time to insist that they diversify to rail. At present, many of our new trains are imported from Germany and elsewhere in Europe, while freight locomotives come from Canada and many goods vehicles from Poland.
This should be put right, and in turn we could grab a share of what will be a growing export market.
I wouldn't be too harsh on the accountants - underskilled management should never have relied on them so much, to make the decisions they were incapable of making. Yes, put them back in their place; we need a resurgence of creative thinking to rebuild British industry. This means also putting bankers back in their place, to act more as a utility than a hedge fund.
As for our alleged inability to compete with the Asian low-cost economies, our roads seem to be full of cars made in Germany, France and Sweden; the world's biggest cruise liner is about to make its maiden voyage, having been built in Finland. Not exactly a list of 3rd world countries, is it. Why should we be different?
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Dear Preston
The high street has been in decline for at least the last 15 years to my memory albeit not at the rate of 7% pa.
The problems of Woolworths, Next and Debenhams are largely specific to each of them.
Woolworths has gone because people bearly knew its product range anymore while Next, imo, offers no better than discounters at a very high premium price. None of the three have a USP anymore. High street names have regularly come and gone
I am starting to agree that there is too much gloom and doom in these blogs. Even when economies grow some individual retailers will decline.
Trade, both domestic and world is obviously a catalist for growth and the basis of a health economy.
Concentrating only on negativity will not help the economy.
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Re Retail Shopping Malls etc
Many of these will have numerous empy
units by the end of 2009.
People forget that even a modest unit
of say 1200 sq ft can cost circa 250K
in rent and rates,then theres service
charges turnover tax by the landlords.
THATS BEFORE ANY OTHER OVERHEAD
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78 Glanafon. Intended as a tongue in cheek post... i actually think the herd mentality of humans is what creates exaggerated booms and busts. And i agree with all the comments on too much negativity.
8- Thornton. FMCG... fast moving consumer goods. I was waiting for the animal rights activists to pick me up on it
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Re M & S layoffs
Are these people who are on permanent contracts, or seasonal employees?
Is it possible we are getting sensationalist reporting?
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Echoing kudos to Mr. Curzon, by the way. He knows what a balance sheet means, and that the ink on the bottom should be BLACK!
Kudos as well to leeds4me4eva, #52.
And in echo to his thoughts:
The economic news is sobering, but not cause for despair, because despair creates nothing. It does consume everything in its path, however!
For instance: Pound sterling has dropped, and struggles to make any headway back. We plan to visit your fair island soon, since it is much more affordable. We'll eat, shop, and enjoy it all. We can't be the only ones who have similar plans.
Two years ago, with the pound over two dollars, Manhattan was chock-a-block with shoppers sporting English accents. The US was on sale--cheap fares, cheap goods to buy, cheap and plentiful restaurant portions to enjoy. (I was in the UK on business, stunned at the expense of everything!)
Don't mean to be a Pollyanna, but...in this period of deep adjustment, shouldn't we be looking at the opportunities it affords us?
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To whom it may concern...
Disagreement on the blogs is great-it stimulates constructive discussion and is very informative as a result of the ranges of knowledge out there are brought together.
But, for goodness sake! Lay off the personal attacks on individual bloggers like Alex C-it doesn't add anything constructive to the process.
And why should anyone be required to ask for personal details in such a public domain? If an individual chooses to give that info, it's their decision. Anonymity gives a freedom to express oneself fully without fear of retribution from employers etc. Particularly where the points made are contentious.
Leave the personal attacks out please.
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"Meanwhile, privately-owned fashion chain New Look enjoyed a successful Christmas after sales rose 2.8% compared to a year earlier. "
Not surprisingly this is the only paragraph out of the 28 in the BBC report today which wasn't developed to look at the underlying reasons.
The other 27 paras did a great job in developing the negative elements of the Next/Debenhams stories, and generally putting the wind up anyone who refers to the BBC to gain any wider view. Certainly not balanced, all personal opinion editorial.
Do your job. Report the facts.
Selling 1 in 20 fewer skirts cannot sound disastrous to anyone without their own personal agenda - surely 1 in 20 in marginal?
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CURZON....please crawl back under the rock you emerged from.
Your continued naivety and frankly untruthful egotisitcal claptrap is getting up my nose.
I've just been to have a look at your so called £700m turnover business that you so often use as an example to why we should all listen to your views on the wider economy.
A net worth of £19k as at the end of May last year would suggest you either take one hell of a salary out of it, or are a little fibber, at almost 38 years of age you should know better.
Oh, and by the way if you are still making the numbers you threw at us last week then you need a new auditor - unless theres a new accounting standard ive missed that means £700m turnover businesses can present abbreviated unaudited accounts.
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Stereotyping any group is not really an accurate way to comment on the economy - although I will accept bankers and financial advisors can be commented on in this way!
;-)>
As an accountant I have known my creative restrictions and leave my MD to be the creative 'ideas' man - I only provide him with the information that demonstrates whether his ideas have a good chance of standing or falling and why that is - the Ops director then has all the information he needs to either support the ideas or back binning them.
This team approach on ideas, evaluation and implementation has worked very well for us. A good accountant is as important as a good entrepreneur (many of whom do lack financial skills but certainly not all) - unfortunately an awful lot of people including many accountants, entrepreneurs, bankers, politicians, people in the street etc etc completely forgot that booms do not last forever and hence stopped counting the pennies in the way they should have.
Now we are all counting the cost in billions....................
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I would dispute the sentiment of the original post.
Why on earth should a 5% drop in like for like sales be seen as a diaster.
Does our entire economic model rest upon a perception that we will continually need more and more shirts and skirts from now until armegeddon ?
If so we will either need more and more people to wear them (population explosion) or more and more wardrobe space (conspicuous consumption), neither of which is in the long term interests of the planet or indeed humanity.
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Just checked the Financial Times news who report on the retail market, and also include news of Co-op's increase in sales of 5%+ over the year.
This doesn't seem to have hit the BBC sites? - it is predominantly a northern based retailer, not about to collapse, no major debt etc etc - so maybe no surprise.
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#88
I am tempted to go even further and postulate that a whole generation of "bright young things" are having their potential, or even their ambition crushed by the fact that they will never get out of debt. Perhaps I am too close to the issue to really be objective though.
However, I feel I am on solid ground when I say that a lot of graduates will certainly have to "rent for life" and that home-ownership and retirement will become a luxury to be purchased by a minority.
By way of an anecdotal example, I have tried for many years to save for a mortgage while paying rent, council tax, travel costs, student loan repayments etc. etc. I held down two jobs simultaneously (one "graduate", another self-employed). Even with two jobs I manage to save barely 1k per year in my mini-cash ISA...
Whoops, that sounds a bit like I'm seeking sympathy - I just trying to illustrate that we are at a tipping point in university education where the financial advantages of having a degree are increasingly marginal when compared with entering the full-time workforce at 18.
And for lower-quartile graduates, their time at university will earn them no real return across their entire lifespan.
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Sterling challenge? - on the ball again. Just ignore today's movements on the euro. I thought ,"Don't let the truth get in the way of a good story" was a joke.
Alright possibly unfair, as you wrote your story yesterday and posted it this morning at 9.30am.
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post 99 furgusonhomesecurity
What a wonderful post? I am 47 BTW
I have no UK directorships.
So silly: you have looked in the
wrong place.
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I would like to appologise to all the accountants - but I can't.
The reputation of British industry is generally poor. The CEOs of our major businesses are nearly all finance men. They spend more time and effort worrying about their share price, massaging the figures so that they can declare a dividend when the organisations are crying-out for cash, etc. etc.
Their reputation for knowing the cost of everything and the value of nothing has been well earnt. A hard analysis for sure but not too far of the mark. When was the last time you saw an accountant look for productivity gains rather than cost cuts? When was the last time you saw an accountant supporting plans to maximise customer benefit when a less costly plan was available - even if it resulted in customers minimising dissatisfaction?
Sorry boys and girls but you accountants and your cousins in the banks and finance houses have brought us to this state.
As for measures by which Value can be calculated, I would like to hear your professional proposals.
maybe this is really a part of the development of what Robert calls Social Capitalism
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Deep joy! Perhaps we might just get back some manufacturing here now that the pound has fallen. After all, it's we poor sods in manufacturing that keep the economy going. Without U.K. manufacturing, the high street is merely a convenient cash machine for China/India/Tiawan and Korea. How come Germany and France still have significant manufacturing capability? Is it perhaps because they invest in training and don't have the snooty attitude to "being in trade" that we Brits have, but are proud of it? It's time to get our hands dirty and earn our keep.
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The answer for the store executives is to copy the bankers.
Keep all the profits but give all the losses to the public, oh and pay yourself a 2 million pound bonus by pretending to be making big profits.
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what a load of drivel is posted on this blog - mildly entertaining but really quite a lot of tin-foil hat stuff
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Those who will survive the "winter chill" in retail are not the ones that sell cheaper. Your big mistake (and everyone's by the way) is thinking that money is the common denominator for everything... has a price. It is no more. Continental Europe knows for a fact what a fallacy money can become. 7% down in Next is no big deal because they are still up and selling average products with an honest approach.
On the contrary M & S makes mistakes after mistakes to cash in fast and furious with a total disrespect for the customers, a good shopping experience and items' value.
If you have a coat the is priced at £300 goes down for 2 days to £200 and up again how do you think customers that bought it initially feel? Yes... betrayed and devalued! Discounts are only a good tactic if they remain discounted forever and applied to items that were not mentioned initially as the "ultimate good".
Imports are going to be dearer for next winter only has prices have been fixed in USD up to 18 months in advance if not longer.
Until then the retail industry in the UK may survive with:
1) The cheaper pound appealling to foreign visitors
2) Unique design and quality that may appeal to the now richer Euro inhabitants.
There is about a 6 months window to "reconvert". After that... it is curtains for everyone bar... Tesco. Our high street will have Preciados, El Corte Ingles and Printemps instead as our energy is already EDFrance EDGermany and EDSpain and EDRussia. And if you give it a little think it is about time this happens, to terminate once for all this corporate culture of the "easy buck".
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Should they absorb an estimated 20% currency-related increase in the cost of clothing and other goods manufactured for them in China, India, Hungary and so on?
This is a ridiculous question and belies a lack of knowledge of how the retail sector works. Clothing retailers of the type discussed make gross margins a touch above 40% BUT net margins between 5% and 10%. To absorb a 20% cost increase on bought in costs would make them all bankrupt far quicker than a 5% drop in volumes. Work it out on the back of an envelope.
The truth is that imported price inflation is GOOD news for the retail sector so long, as in this case, all retailers are in the same boat. Of course there may be a negative volume response as consumers adjust to new price levels but so long as overall demand is reasonably inelastic the profits impact of this will easily be offset by the fact that price inflation should overtake cost inflation.
Imported price inflation from China etc may have been great news for consumers but it has been a drag for retailers who have had to run ever harder for volume growth to square the circle of price deflation v domestic cost inflation. Now that pressure is off so please recognise this good news for what it is - just because we are in a recession doesn't mean every headline has to be gloomy.
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Can someone clarify my thinking?
Is the pound likely to stay in the doldrums for long?
As it is so low now, imports are expensive, so companies will increase their prices, thus causing inflation eventually (compounded by potential govt spending). Thus interest rates will rise, therefore pushing Sterling up against the Euro/$.
Is this thinking correct? If so, how long before inflation kicks in and Sterling increases (end 09, first half 10, sooner?).
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i do not think we are headed for 'a kinder,gentler,less devisive society ' although a nice Xmas wish !but a tougher,less accommodating market driven society where there will be more racism and less tolerance.We have at some stage to confront the world market and become more like the chinese and recession generally brings out the antisemetic and nationalistic.
perhaps there will be less leverage and less top end but also worse at the bottom.
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#112
Anyone who knew the answer to your question would know the answer to when the recession will end for it is pretty much the same thing.
The pound will experience an upside when the economy ticks upwards as capital flows are based on a perception of interest rates and economic health both of which will remain low whilst we are in recession.
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This comment was removed because the moderators found it broke the House Rules.
The optimism in this piece is misplaced and somewhat myopic - sure everything would be fine in the long run if this was a recession, but it is not. It is a depression and we are seeing the collapse of the whole economic infrastructure.
These firms may think they can weather the storm, but things will only get worse in the days, weeks and months ahead as businesses fall in ever greater numbers, unemployment inevitably grows at a significant rate and the debt levels - individual and national - rise rapidly.
Capitalism was the best system - at least in comparison to the alternatives - that is until the modern era, since it was able to effectively cope with the folly of human greed and stupidity. Unfortunately, electronic money, together with globalisation, rapid technological advances requiring considerably less labour and sustained population growth skewed towards the aged, has pushed it over the edge.
The new world order will need to be one based purely on societal benefit - not profit maximisation and that will bring a whole new series of challenges not least in changing the very way we see the world, but, more importantly, each other. Martin Buber called it the difference between the 'I and It' relationship which objectifies the other into what one can get out of them, and the 'I and thou' relationship where we see the inherent value in one another as a underlying basis for life.
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Pip pip all of you.
Just catching up on the posts over the last few days. My my, what a lot of insecurity is being shown by some fellow posters about our chum, dear old Alexander Curzon.
F'r instance, # 99. FergusonHomeSecurity and others seem to have spent hours ferreting away on trying to prove some spurious point they have dreamed up on day release from the funny farm. Either they have pretty empty and meaningless lives, which is a problem for them, or they are eff-wits, which is unfortunately a problem for the rest of us as long as they rant on within this blog. Just imagine, they probably even have the vote as well!!
Go away and lie down dears.
In the meantime.......
KEEP on
POSTING
Alexander
Pip pip.
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Things need to get a whole load more expensive and difficult in this country before people start to leave. Depopulation will be great for everyone who remains.
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Jeffrey post 109
If its all as you say why do you read
the "drivel" then.
Dare say you will complain over this post too?
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Usual one-sided doom and gloom from Peston, even when the new is positive.
I fear he is rapidly becoming a parody of himself.
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#88
The upshot to your post is that average wages are too low to support that (exhorbitant) cost of living in the UK.
It also means that the cost of doing business in the UK is very high compared to other parts of the world (e.g. Western Europe).
Something must give otherwise the UK will be an utterly broken country in 30 odd years when people my generation and below are starting to retire with no pensions, no property, nothing.
We are digging ourself into the biggest hole of them all.
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116 XCAnderson You are too right - this is a depression and not just a cyclical recession.
We do need a new formula for valuing our economies and economic relationships. The old model is broken and we are wasting time and money trying to prop it up.
So let's finally acknowledge GD2 is on the way. Like a tsunami we can't avoid it but we can make some preparations.
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#88
When you put it like that, it's more terrifying than I thought.
I'm in that position myself. Honestly, my plan is to pay down what little debt I can (the non SLC debt) and then save enough to escape this wretched country.
I blame the government, because they were the ones who pushed university on kids who really wanted to improve their lots, but skimmed on the details. Lots of spin and no substance as per usual.
What we really need now is for the tech companies to step in where the government has quite clearly failed, and offer cross training in return for a clear employment term (eg. a part-time physics degree in return for 5 years on the R&D department in a tech company).
Also, there needs to be a complete change in the careers advice kids are given. (At 18, 6 years ago i was told that a degree in any subject would improve chances of getting a better job. i got a good degree in a traditional subject from a russell group university and i've seen absolutely no benefit. How many 18 year olds are sufficiently aware of the finiancial climate, the jobs market and politics to make an informed decision?)
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As a small independent retailer here are some facts.
99% of our suppliers are putting up their prices due to the exchange rates
We will be passing on all these rises to maintain our margin and in a lot of cases we will be increasing our margin
So we anticipate that inflation will indeed be a problem unless the pound strengthens
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I have contribued over these blogs over the last two days initially regarding Mr Curzon in a somewhat negative way which I apologised for about 5pm last night. since then I have commented on what has happened and how it has affected me - this is similar to some other posters.
Other people are either doom mongers or comment on things not being as bad as they seem. Some criticise/praise Mr Preston.
Really if we all want to try and be useful and make a difference we should all try and comment on what the government should be doing - very few of us are qualified to do this but I'm sure we all have some ideas. Posters to Mr Preston's blog would then equate to brainstorming on solutions to the economic mess and if we did this then perhaps Mr Brown would come to the site and learn something useful.
I'm afraid at the moment we are wasting our time and Gordon is wasting our money!!
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The only bargains I spotted out and about during Chrimbo were TFT tellies, in fact I commented to my work colleague today as to the lack of anything on sale, people did seem to be buying a lot of these tellies though.
Me I probably caused all these shops to go down the pan, I buy my jeans from Asda or tesco for £6
t shirts 3 for £6 and trainers £12 from JJB sports
I could easily afford designer gear, but there is no way I would pay for it at the prices the charge, so even if my cheap jeans go up to £20 and the trainers £40 I will shop around for the cheapest.
I do like to spend my money on other stuff though but I give myself a limit and sell it on when Im done with it.
I'm more inclined to look for an opportunity in the coming months to put my money into , people need shelter food and transport , I wont invest in the property, I dont like cow dung so I will put my skills into engineering low cost transport, as my money (what little I have saved ) is earning no interest and its not going anywhere near the stock market or my pension
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grimupnorth post 125
The problem amongst many others is
that man listens to no one other than
himself and a few of the inner circle.
From yesterday re WW theres a post
for you. . .
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93#
Exeter is my nearest shopping centre. Debenhams have moved into large unit in new Princesshay development. There is obviously too much under-used space - a couple of times over Christmas period I walked past and hardly saw any sign of life/activity. Suspect it won't be long before we see many retailers closing their top floors - they won't have the stock or require the staff.
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evergrowingbrain,
rahere,
somali_pirate_SP500,
alexandercurzon
Red Lenin
glanafon
Tigerjayj
Is this a Club to make the rest feel inferior ?
New to this and learning alot already about fear, greed, ego, opinion and blind and or educated navigation.
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Today's London close seeing GBP1 nearly = USD 1.5 and EUR 1.11.
Oil up 10 - 11% on the day
Normal daily fluctuations of the casino, not to be taken seriously.
And remember folks: the Banker ALWAYS wins!
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To all those who express on this blog their fervent wish to leave this country due to their wealth or prospects being eroded: please feel free to leave us and the sooner you up sticks and go, the better.
In your place I would welcome those who have come to the UK as refugees, whether for political, religious or "economic" reasons, many of whom have fled their country in fear of their lives and then get treated appallingly by our security services and (un)civil servants.
At least they want to be here...
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purpledoguk post 129
Theres no club so please dont feel
excluded.
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If those writing on this blog want their comments to be taken seriously can they please sort out their usage of off/of, there/their, leased/least etc etc etc.
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Could someone please furnish some data? I keep reading that savers significantly outnumber borrowers. The recent interest rate cuts will have reduced the spending power of savers and increased that of borrowers. Does anyone have an estimate of the net outcome?
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129. PurpledogUK
"New to this and learning alot already about fear, greed, ego, opinion and blind and or educated navigation"
If I told you we were all a gang of spotty 14-year old boys and girls sitting on our bunk beds suffering from grandiosity, would it help?
The beauty of a blog is that what is said is all that matters, not who the sayer is or is pretending to be....
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The earlier post 106 regarding cost cutting rather than productivity gains etc is right on the mark.
The asset stripping debt fuelled buyouts and resale? Accountants.
The mark to market/available for sale/hold to maturity fiddles? Accountants
Off balance sheet activities? Accountants
Credit rating agency staff? Accountants
The failure to qualify duff accounts or spot the Leesons/Madoffs/Enrons etc etc ? Accountants.
The administrators who will be unravelling dozens of company’s and to Hell with unsecured creditors? Accountants
These people will be improving their own cash flows by slowing their payment cycles to suppliers. The big battalions might be helped the small men will be stretched to breaking point.
When working in a major bank in the early 90’s an audit recommendation was to pay as late as possible. The accountant in question could see neither the harm caused to the supplier nor the potential reputational risk of a major clearing bank being seen as a contributory factor to a small company’s demise.
I think it was Cohen of Tesco fame who stated accountants should be on tap not on Top
One of the greatest threats to the economy is the anagrammatical professional.
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This story sounds like it is straight out of the cash flow discussion in the comments on Peston's previous two posts. Perhaps we have a modicum of feedback at last. Welcome if true.
The pound has a significant probability of being the next shoe to drop, thanks to policies informed by Gordon Brown's belief that debt interest can be serviced with more debt in perpetuity, even though PIK junk bonds debunked that back in the 80s. With that, real interest rates to the moon.
Currency devaluation against a backdrop of continuing credit deflation would be a true nightmare, squeezing people between resilient import prices (and what is not imported?) and a decreasing amount of circulating money.
#125:
Regrettably we all became qualified to comment on what the government is doing the day they began to speak in the hope that no-one would check the numbers. I would rather hear the variously flawed reasoning of the man in the street who has nothing to gain or lose by offering his honest opinion than listen to the qualified professional who lies. One way or another, we are all here because we share that belief.
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alexandercurzon post 132
Thankyou for your reassurance.
I will continue to absorb and learn as much as I can about where I / we are all going.
I can't help but think how we are all really so powerless to effect change unless we consolidate our ideas and thinking.
I do support the sentiment of GRIMUPNORTH77 post 125 and agree with the fact that we are wasting our time here ALL trying to be heard at the same time....
What TO DO??
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#125 grimupnorth77
fair enough comment that we should suggest what the govt ought to do, though I don't for a second believe they will take comments from the general public seriously, even if Yvette Cooper does read this blog.....
so I'm laying off to sardonic ironic tone for a minute to send in a dozen off the cuff ideas; they are mainly to do with direct govt investment in things like housing and renewables
(1) finance housebuilders directly to complete all the housing developments they've shelved or started but mothballed; housebuilders deserve bailing out more than banks or Jag etc as they have to create employment and create something here within our borders
(2) help local councils to rebuild public housing stock run-down by private sales over last 25+ years
(3) tell banks to leave foreclosed homeowners in the houses as tenants
(4) convert all the abandoned Woolies and thousands of other empty commercial bldgs to useful short-term facilities for communities etc
(5) build the high-speed rail hub at Heathrow INSTEAD of a 3rd runway
(6) invest in tidal power technologies, wind turbine technologies and build/sell the turbines instead of importing them from Germany and Denmark
(7) make Kingsnorth a new carbon capture coal power plant and use it to develop the CC technology and then sell the technology to China!
(8) teach our school kids how interest rates work! and make parents send their kids to their local/nearest school while you're at it
(9) encourage local and slow-city economics (ie sourcing food and other goods from within a 100 miles etc) but don't turn protectionist per se as that won't do it
(10) cancel Trident and the aircraft carrier replacement programmes, get out of Afghanistan and spend all that money wasted on wartime toys to develop infrastructure here, starting with the electric grid so that it can be connected to all the new wind farms and tidal turbine installations
(11) give everyone a free home energy audit and then insulate all of our drafty old houses to a very high level like the R2000 standard in Canada and do it for FREE; before the Russians/Ukrainians really do cut off our gas permanently; this programme alone would be employment intensive, creating tens of thousands of jobs, and would save us a bundle and be good for the planet!
(12) implement Jamie Oliver's and other advice to try to get us to lose weight and get fitter
and get all these things underway no later April '09 please
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Robert
I think it is important you are slightly more cautious in your blog. We all need to know the facts, but we know the economy will deteriorate over the next 3 months and too much negativity from you and the BBC could make things far worse. It is now completely impossible, I believe, to avoid the most devasting recession of my life time (age 48). Now is the time for us all to focus on putting pressure on the Government to really makes some changes to ensure we have plans and policies in place to come out of this with a new social and ecomomic structure that will work. This must include a review on Europe, fossil fuels, nationalisation, currency and international peace keeping. It's too late to stop SS Great Britain from this recession we now have to focus on BIG change for the future.
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#133 crosserandcrosser
of course implementing my suggestions would be hard on the gov't coughers.........
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#103 LiveWithinMeans
I fear you are right.
RP talks about this country using the savings of the far East to fuel our recent credit boom, but we have also used YOUR future prospects and the prosperity of current and future pensioners (YOU included) to fuel our greedy binge. You certainly don't owe my generation a debt, but we are lumbering you with enough debt to make your legs crumble.
The borrowing/printing that is going on now just does further damage. [Though, paradoxically, I can't think of a better solution to avoid instant meltdown.]
I have told my daughter and her boyfriend ad nauseam that they will not make their fortunes in the UK. Our time has passed.
Perhaps now I have to change the warning to "make their livings".
Seriously consider emigration or working abroad. Have you worked abroad? There are countries where your fresh ideas and your energies will be recognised and rewarded. Too many old farts set/lost in their ways here.
Good luck. Just send us the odd postcard :o)
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129 purpledog
Forums are full of people who want to convince themselves what they want to be true is true whether it is true or not. If that is house prices will fall forever or we will all only eat turnips then that is the case. That is it in a nutshell. I'm not part of alexandercurzons club. I do not mind the fellow making money or shouting, individually he is doing what he must to operate. I dont mind him having an ego. You need an ego to take the hits. As an individual he is unusual in that he is very open, there are many doing similar quietly. Cheap imports are a major problem and AC is part of that problem, however that is not his problem, although it would be if people stopped buying imports on principle. Here - All I do is survive and try to grow whilst keeping flexibility and above all independence. I follow chinese philosophy in business and in that there is no such thing as stability, there is only growth or decline. You have to detemine which you are in constantly. The minute you say things are stable you have a problem, you probably are in decline. But I believe there is plenty of opportunity. I try to report what I see because I am sick to the back teeth of hearing all the negativity, one has to suspect from at least some who are in trouble, possibly thru no fault of their own, but sometime due to a lack of foresight. I report the business framework here, which works because somebody out there is highly likely to have to go solo and try and make something happen. If they read what is working here it may help them. I am not giving the business away or franchising it I am just stating that the conventional approach is dead in many cases but there remains opportunity. There is due to be mass unemployment and there simply will not be the conventional jobs available. Personally I am suspicious that in an ecomony like the UKs that having a meaningful number of people unemployed is effective in keeping wages low. Not that that would ever be stated by the government. In the US sometime ago an economist suggested 8 percent was a 'good' number for unemployment. If a person is unemployed it is extremely difficult for them. The prospect of becoming long term unemployed is real for some which makes life very very difficult. However a great number of people are not going to be unemployed are they, and they will take advantage of that fact, so housing issues for example are likely to get worse not better. A housing uplift in due course is likely. A number of flakey major businesses that have had underlying problems will fail. That does not mean all businesses are in trouble. The BBCs continual reporting of what major banks and major corporations are up to or down to is not a representative picture of what is going on in the UK economy by definition. For people swept up in Browns Bust the great danger is they become a permanent underclass in a economic Gulag. That is the reason I report what I report, that economic activity is possible in a different framework, and that the internet is an important way of contacting a potential customer base worldwide and keeping overheads low which is a must in taking on the East. I do not trust governments, I do not trust banks, I do not trust large businesses, all have done the dirty on me at one time or another, sometimes in a breach of contract which you then find is too expensive to pursue. Too may people have blind faith in these institutions and get in trouble because of it. I did at one stage. Does that help explain things.
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#136. The accountant is the first parasite after one has established a business. Usually this is forced on the new limited liability company by its banker seeking indemnification from the limitation of liability which was the reason to incorporate in the first place. Accountants are usually the last at the corpse when they have finished gorging.
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#133 CrosserAndCrosser
... and should we tolerate "etc, etc, etc"?
Wise up, the language changes every day (and always has).
Texts and Blogs are in the forefront of this; enjoy the metamorphosis of spelling and meaning; ride the wave; loosen up!
If you are blinded by the form of the message to the contents of the message, then you are lost.
Sorry, I just needed to vent!
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#125
Apart from the obvious one of resigning, hhere are some off the wall, out of thin air ideas that they wont follow either:
a. Rather than reduce VAT, increase it, to say 30%. This will encouarge saving, helping recapitalise our banks, and reduce the consumption of imported tat - bad news on the face of it for the retail sectorbut they may even increse their profit margins on lower turnover, as other posters have observed.
b. Merge Income tax and national insurance, set the combined rate at say 30% with a relatively high threshold to encourage people to work and encourage emplyers to take them on.
c. Abolish all Income credits (this combined with b would massively reduce HMRC and the paperwork imposed on business) - replace with increased Child Benefit and higher state pensions.
d. Freeze all Govt spending except defence - why should it increase when we face deflation?
Probably all barmy and wont add up, but a thought. Would increase savung and self reliance, incentivise work and investment rayther than borrowing and spending.
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133 crosserandcrosser
If it means I will be taken less seriously I will definately expand my mizspelling. Thanx for the tip.
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Cheap sourcing from Asia combined with a debt fuelled consumer boom has created overcapacity in UK apparel retailing. The much publicised events of a few chains going into administration are just the start of a necessary correction.
What we are seeing now is that the demand led factor behind the build-up of overcapacity going away.
The fall in the value of Sterling means that the supply led factor will soon start producing its effect.
Overcapacity in any industry is a form of misallocation of resources. Should we be sorry when this misallocation comes to an end?
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The decline in retail has been evident for many years, hidden by 'City Financiers and their Clan' in their self-serving interests. Retail is about finding and retaining 'profitable customers'. National Government and their 'business rate increases' by excessive amounts have been killing off the small businesses above the shops/ the small shopkeepers. The High Street continues in terminal decline and 'selling activities' will increasingly be centered on low cost out of town Warehouses plus the internet. The retail motor industry is a good example of the trend.
So what will help. If we are to continue to obtain and retain customers we need a new form of Government expertise and quickly. The cost of servicing customers is too high and only the Government can take the action. Keep the Cabinet, close the Houses Parliament, disperse MP's to the Counties, restore County Government and close all local authorities. Close Head Offices of all Goverment sponsored organisations and return the operations to Operating Management. Move out all 'Consultants'. Pay only Statutory redundancy costs at all levels.
Slash business, community and personal taxation.
Now let us move forward!
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#141 somali_pirate
...... and quite a few of them wouldn't be too easy on the rest of us either.
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134 crosserandcrosser
There are approx 3m borrowers and 7x that saving. In 2000 (2002?) there was balance between domestic deposits and loans. From then till 2008 an imbalance grew to some 650m GBP mainly funded from overseas, the basis of Browns bubble. That inflow has apparently collapsed since Sept 2008, so it is reasonable to assume balance is now restored, but that is just a guess. Savers have a problem most are put off the stock market, most do not want to put it in a foreign bank, although a few clearly have. All that is left is spending, or the matress, or the bank. Interest rates are rock bottom and 1 percent in Feb and 0.5 percent BoE rates have been forecast by some but there are no apparent public reports of a drop in savings levels. Some perdict interest rates to remain low for some considerable time and some are lobbying for a rise to attract savers. It probably depends on how things develope. You might get a banking industry poster better able to comment. We have some limited evidence of customers saying they want to spend because there is no point in saving.
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I think the reason most posters on this blog write in a tetchy manner is because they are frustrated with our corrupt economic and political systems, rather than they don't like other posters. I think we get a good cross-section of opinion, intellect, depression and get/up/and/go, so keep on keeping on the lot of you. I know it is theraputic.
| don't know where everyone gets the time to read all the posts 'though, it makes me less productive.... and I am a speed-reading powerhouse, mate.
A few thoughts spring to mind from comments over the past few days about the future in prospect. Here is one thread to start with.
Probably not an atypical family (my own)
We have 4 academically or creatively bright * hard-working children between the ages of 16 and 22 -all different but entirely typical of their generation. Despite our best efforts, they (in common with most of their friends) see not much hope in the future at all.
(* that means they refuse to work in legal and financial sectors where the money used to be).
They do not see a bright, opportunistic future, only a third-world trudge in the UK;
They know that their parents and grandparents destroyed the planet, consumed all the oil, caused global warming, burnt the rainforest and now want to expand nuclear power, all for short-term desperate gsins.
They also now understand that we spent all the money, stole their pensions and want to impoverish their future with high taxation, a crap exchange rate and rampant inflation;
They assume that no career will offer them a lifetime's work and they will have to switch jobs every five years;
They believe they will complete their further education saddled with student debt, heavy overdrafts and no money for a deposit on a home. Accordingly they will be in debt for the first decade of their working lives;
They believe they are fated to accept un-stimulating 35hr/week jobs with only the compensation of 6 weeks holiday and lots of spare time to enjoy leisure pursuits to dull the boredom.
They believe the government will not listen to them, lies to them and so they don't even see the point of voting. (They wouldn't even take to the streets to protest).
They watch most of their friends escape into 'recreational' drugs - believe me, it is now an epidemic in this country * - and do their best to resist.
* why do you not think there is student unrest in this country, 20 years ago we would have all be painting placards.
They know if they want to make a go of anything, they have to emigrate. And I don't blame them.
Now I would say that our family circumstances are quite typical of the people in this country who make an effort. Both of our sets of parents were the first generations in their families to get to university, and thrived. All of their children took demanding and challenging careers, and contributed to the betterment of the UK. But the next generation only fears for the future, they do not not embrace it.
Everything in the past 6 months in the western world has reinforced their desperate view of the 21st century, and I would suggest that it is up to us, who collectively let all this happen, to sort it out. The future isn't for us you know, it is someone coming on behind.
We have an obligation to our offspring to the following~
work off the debts
rebuild the banking system
destroy the short-termism of the financial and stock markets
reduce the public sector burden
weaken government's power & incompetence
eradicate useless government red-tape and over-weening intereference
create the jobs by building a hi-tech manufacturing economy (we actually have lots of brilliant people already, they just work under incompetent accountancy-based management executives).
develop a clean energy future
invest in serious academic infrastructure and teaching
compete properly in the real world against our foreign competitors.
With the right leadership or freedom from red-tape, and clearly focused tax-incentives I reckon this country could be transformed within 5 years.
Robert, forget this 2010/11 rosier times nonsense, we are a currenty third-world country with a basket-case currency, we just won't look ourselves in the eye and admit it.
It is going to take a lot more than creative accounting to dig us out of this hole and your job is to keep on exposing the incompetence and lies in the city and in Whitehall. We don't need saccharine 'good' news just now, we just want the honest picture.
Regards,
thats one thing of my chest....
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I have a couple of suggestions of my own for the government.
ONE
Plot the sum of NNRE and RUTN on the same axes as YBHA and then as a percentage of YBHA. Add a business series of your choice if you wish.
Now tell me how you are going to fix that little problem with more borrowing without triggering a sterling crisis.
I will give you a hint. You can't. You own data is telling you that borrowing is the problem. Specifically, that we are not even paying off the interest on existing debt.
TWO
Phone the nice people at the Citizens Advice Bureau and ask them what advice they offer to people in this position.
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#145 SpareACopperGuv.
Sorry you've had a bad day. I am, however, capable of taking in both meaning and form and hardly think that the examples quoted represent a 'metormorphosis of spelling and meaning'. That said, perhaps my bad day was reflected in a little intolerance of those wishing to comment upon the running of the country while failing to demonstrate a grasp of some of the basics of the language. I will try to loosen up, but nagging doubts about credibility may remain.
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#147 glanafon.
Doesn't count. You did it on purpose.
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Off topic
Over the Christmas and New Year period the Spam arriving and caught by my filter dropped at least 90 per cent. Is this a sign the recession is REALLY biting?
It may be that "captured" PCs were offline but that seems unlikely.
It has picked up a little this week but is nowhere near earlier levels thank goodness.
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Glanafon
Thankyou for the post @ 143
There is alot going on in there - a little like one of my dissatations from the mid 80's....
There are those who 'say' and those who 'do'..
For the record I think you are probably the latter.
I too despair about all the chatter and irrelevance tripped out and take great fun in disseminating the important stuff and I am pleased to see that since the post @ 125 there have been several posted suggestions about where we should go (whether frivalous or not) it is a start and should be carried forward.
Facts are intresting, figures can be manipulated, problems can be highlighted but solutions need real thought and a collective mind which I am sure we all have...?
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#154 CrosserAndCrosser
:o) Good one!
Now I must get out and get a life.
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#156 sosraboc
A big source of spam has recently been shut down by the authorities.
However, I find that posting on a bbc website or emailng a bbc news program dramatically reduces the level of spam for a while.
Guess GCHQ have Anti Spam filters as well...
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People, please don't be fooled by the shrills who are trying to turn bad news into good news ie sales ONLY 7% down on last year etc.
At this rate they'll be trying to convince all who will listen that 3 - 4 million unemployed is good news for UK plc as it means that we'll be really well placed to take advantage of the upturn when it comes.
Don't be fooled, this will be the mother of all downturns/recessions/depressions and it's going to cost a lot of people their livelihoods and it will be a very long time untill we are anywhere near on an even keel again.
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156. At 8:36pm on 06 Jan 2009, sosraboc wrote:
Off topic
Over the Christmas and New Year period the Spam arriving and caught by my filter dropped at least 90 per cent. Is this a sign the recession is REALLY biting?
It may be that "captured" PCs were offline but that seems unlikely.
It has picked up a little this week but is nowhere near earlier levels thank goodness.
.....
I agree...I noticed this too the other day..long may it continue!
Another 1 of my friends lost his job today....I now know more people unemployed, out of work, claiming benefits etc than I do that are actually in employment!! The future is looking bleak for anyone who is not employed in the public sector or by the supermarkets.
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111 - Regalindie -
Congratulations. You are one of the few people on here who understand the difference betwen Gross Profits, Net Profits, and turnover.
I was self-employed sole trader a few years ago and you'd be surprised how many small shops, pubs etc are run and owned by people who don't and that's why so many crash.
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#103 #123
You are right. That's exactly what I told my son ten years ago when time came for him to pick a university. THERE IS NO POINT. It costs the earth, burdens you with debt, deprives you of three or four years on the earnings ladder, and for what? All you're going to learn is how to drink, take drugs and get laid and you already know all that anyway. Now that every second rate ex-poly is a university anyone can have a degree. In any subject that is not strictly vocational, it means nothing. Did he take a mother's advice? Of course not. Result: he's still trying to get on his feet and I cannot imagine him ever being able to buy anywhere to live till I kick the bucket, an event for which I imagine he prays daily.
But to get back on topic, re clothing retailers, they DESERVE (Curzon use of capitals) TO SUFFER. You think the men have it bad? For women, the situation is appalling.
If Hollywood has three ages for women - babe, district attorney and Driving Miss Daisy, clothing retail has only two: - 'pubescent anorexia victim' and 'frump'. I swear, half an hour in Bluewater today had me close to slitting my wrists.
The vultures have long since picked clean the sales racks and the new season stuff looks appalling, shoddy, cheap (although not the prices) and dull as ditchwater. And as someone mentioned above, stock levels are LOW. It's not my imagination, I've never seen so much naked floor space.
Why should we buy when they make no effort to offer us clothing that will flatter or excite? I REFUSE to settle for Nitya. I would rather die than accept that a woman of my age must wear a series of dully coloured tents. But if one can't afford Vivienne Westwood, what is a girl to do? For all its expensive commercials, M and S might as well offer prison uniforms as any of the stuff currently on its racks. I went to buy. I came home with some tights and one pair of mens' pyjamas. And a head ache.
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134 (&151)
Try looking at the economic factbook on the HBoS website. That is a mine of economic information (mainly sourced from the ONS, so not made up by the bank - though not necessarily 100% reliable).
www.hbosplc.com/economy/economicfactbook.asp
Of most relevance to your particular query are probably table 19 "household sector balance sheet" and table 20 "household sector financial assets". That shows historic levels of mortgage debt (£1.2 trillion @31/12/07) and deposits (£1.0 trillion). It is true to say debt relative to deposits is higher than it used to be, but maybe not by as much as you would expect reading Peston's blogs. (Same is true of corporate UK, but that is a different story).
Actually, do me a favour and have a good look at the balance sheet and tell me how robust you think it looks going into this recession. Admittedly a lot has changed since 31/12/07, but it might reassure you a bit. Too many people are forgetting that a balance sheet has an asset side as well as a liability side, even if some of those assets are a bit soggy.
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@ #116, XCAnderson wrote:
[other interesting comments skipped]
"The new world order will need to be one based purely on societal benefit - not profit maximisation and that will bring a whole new series of challenges not least in changing the very way we see the world, but, more importantly, each other. Martin Buber called it the difference between the 'I and It' relationship which objectifies the other into what one can get out of them, and the 'I and thou' relationship where we see the inherent value in one another as a underlying basis for life."
At the risk of going off topic (but my post is probably near the end of this thread):
I feel much the same about what I believe is your overall sentiment: people should treat each other as ends, not as means.
The question is: what would an economy look like which was founded on this principle?
What is the difference between "profit" and "benefit"? The first is to make (to go) forward; the second, to make (to be) well.
"Profit" in a moneyed economy has a simple clear-cut measure. The cause of all our current economic woes (and, incidentally to be sure, some of the "benefits") is activity which strives to maximize profit. Activity motivated by what?
Could we ever agree what real "benefits" are? Will we ever stop asking how to increase profits long enough to really consider the question of benefits before it's too late?
(BTW, I'm not a follower of Buber: as long we believe there is an "I and thou" the mind is still divided against itself. And even though we do sometimes manage to treat each other as ends and not means, we continue to treat the rest of the natural world as an "it.")
I haven't much of a clue how an "improved" economy would work financially, but starting in a top-down manner, I propose the following goals:
1. The world economy should provide every human being with a recognizable and effective part to play in producing adequate food, shelter and leisure for themselves and others. Call it a "subsistent economy" if you will, but it must be equally available to all.
2. In achieving 1, the economy should return human life to sustainable levels of renewable energy and other resource consumption, and maintain its human population in balance with the Earth's resources and biosphere.
3. The economy should encourage by whatever means, the replacement of material accumulation and attendant waste as the defining activities of life, with the ever-expanding awareness of what it means to live in harmony with the world. In other words, reverse the imbalance that currently exists between the material and the mental/emotional "quality of life."
Shouldn't something along these lines be the purpose of an economy?
The difficulty with working towards it (assuming one agrees it's desirable) is that the clever people (and I mean this sincerely, not sarcastically) who propose alternative ways of improving the existing financial system, seem to be inside a box that does not contain the above economic goals.
As I've said before, I don't see how a changes in interest rates, taxation, government spending, better regulation and so on, and on, will contribute to the needed fundamental change in the world economy. Can it be changed by financial mechanisms?
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#139 Somali pirate
excellent, could not agree more with your off the cuff ideas
re comments on debt ridden graduates
you make me feel guilty
we in education knew for years that too many graduates were being processed for jobs that were never going to be there
one example
in my FE college we even dreamt up a degree in garden design which brought in large funding per student
due to all those garden design progs we used to watch
I ask you how many graduate garden designers does this country need
oh and the accountant used to try to make me purchase from the cheapest suppliers
I used to ignore him and go with the company who gave excellent service
not sure how I managed to get away with it
seem to remember he could not count or run his eye down the spreadsheets as quickly as me
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I am not as macro economically clever as some of you who have already contributed some excellent ideas since #125.
Earlier contributions at 62 and 83 also worth capturing and Alex Curzon 114 of yesterday.
For my co which is an engineering and project man company (some manufacturing some supply of skills) we find that when exporting our skills to Asia particularly we are constantly affected from a cash flow point of view by their withholding tax rules.
Typically on a £1million contract we will have between £50,000 and £100,000 'withheld by the tax authorities in the country we are performing the service. We are only able to offset this against corporation tax payable nine months after our year end and only if we make enough profits to cover the withholding tax suffered.
If Government would bring forward this reclaim so that we could claim as soon as we had suffered, say with monthly PAYE, then this would remove a massive funding problem for our company and we would be able to increase our employees by probably 10 straight away as we would be able to do more work in Asia as well. This does not sound very exciting but we currently employ 50 people so that would be an increase of 20% in our employee numbers. As we have a competitive advantage in exporting our services at the moment we are the type of company that the government should be assisting.
The only actual 'cost' to the govt would be a cash flow one plus the interest lost (virtually nil at the moment!).
There will be lots of other exporters who also suffer from this problem and this change would be a massive help to us all. The government needs to focus at least some of its efforts on the companies that are succeeding rather than just propping up failing ones.
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160. sirsevernbanks
You may be right about the coming recession, but I am continually amazed by the certainty with which the more bearish posters on this board forecast the coming gloom.
I would not paint a 7% decline as good news, but I will wait for the full retail reporting season to run its course before making an educated guess as to what it implies for the immediate future. Suffice to say - as other posters have pointed out - Peston does routinely fish round for the bad news rather than report the better news, albeit that it is in short supply.
The Next (up 12%) and Debenhams (up 20%) results appear to be better than the markets were expecting, but then again what do they know? (Except when they are in "freefall" of course).
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# 152 all my fault.
Cheer up, things could be worse we need kids like yours. I was like them and I worked abroad in several countries for 8 years as I graduated in 1992 (need I say more).
It was an experience I would not swap but it did teach me that there is a thread of decency that runs through this country I have found nowhere else, in part because of people like the bloggers here that take the time to complain and genuinely care about what happens. Complaining of the sort we often see here is a very good sign.
We will get creative and re-invent ourselves again as we have many times before. As usual we became corrupted by our own success, everybody knows we are at our best with our back to the wall. We are in a phase of de-constructing what is no longer relevent at the moment and it will take time.
Jericoa
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157 purpledog
Actually I would quite like to be a 14 year old, but sadly that is not the case.
You ask where are we going. Thats the big question. Who knows.
The key problem is that for decades, and I mean decades, the total tax take direct and indirect in the UK has been 43 to 46 pence in the pound. That is the HMG government income needed to fund the social and health costs in a developed european country. That the level of services the electorate want. There is no escaping that figure and it is I believe common across the founding EEC countries. The tax take has been up at the 46 figure in the latter half of Labours tenure. Since 1997 NHS funding, which was low by EEC member countries standards, has jumped significantly, to Labours credit. No political party will now significantly cut NHS funding in the near term. However the underlying need for 43 to 46 percent tax tells you that there is actually little room for manouvere in budgetary terms. That indicates that whichever party is in power, on central issues there is not likely to be much difference in policies. That is why the concentration is on small issues such as giving savers a tax break when a tax break on very low interest rates costs little, or suggesting support measures for the unemployed householder which on close inspection are actually difficult to claim or cost little overall. Or using projected savings on unemployment benefit as a job golden hello for employers. As the recession limits scope further due to a drop in HMG revenue and debt servicing the question of who is in charge is further weakened. Both main parties seek the centre ground and the main voter movement is driven by voter disatisfaction, not attraction. HMG revenues will probably be propped up via more LG means testing, they have already proposed means testing social housing rents. A expansion in jobless figures effectively expands the public sector, which will ironically force more job cuts in the public sector. The 1930s US solution was a house building programme and promoting private house ownership. Eg Fanny Mae and Freddie Mac. The key to reducing unemployment here will also probably be promoting directly or indirectly housebuilding and if funding is not available then my bet is they will fund indirectly low cost fixed rate medium term mortgages to stablise the housing market and encourage economic activity. Some will fight it and it clearly is dangerous as it could promote a boom, but there are measures to throttle it back which could be used, ie rationing, profit sharing etc, contractual restrictions on equity withdrawal. Housing has to drop lower before such a scheme could be considered. Anything to promote economic activity is stronger if it avoids imports. Manufacturing is not affected that much by sterling being at a low level as materials are usually a low percent eg 20 percent and it is the added value which is important and that is domestic, and low exchange rates helps exports so they are taken care of. Interest rates are linked to supporting currancy so sooner or later interest rates will have to go up, the question is how much and how late. The public sector has to shrink as the economy shrinks, it can be displaced but ultimately it has to shrink, it is tied to the 43 to 46 percent tax take. The issue for an individual is remaining in employment or creating their own employment however limited. If 500,000 or 1,000,000 people become unemployed over 5 years, which may well have happened without the bubble, because by definition those jobs probably existed due to the bubble, then there is some slight chance of creating 100,000 or 200,000 jobs each year to absorb them. If it all happens in one year then there is no chance of creating that number of jobs. That is Browns crime, ignoring the BoE info in 2006 and earlier, and the IMF warnings about collapse. There will be longterm unemployed generated in this recession and if you are out of work for years then you become regarded as unemployable. That is why understanding small business possibilities is important, it will be the only way out for many.
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#163 wharfgirl
In previous posts you said the best presents you got were home made so can I suggest that you make your own clothes, you could rival Westwood and have some truly original creations.
Generally:
I have to say that I thought the treatment of Alexander Curzon over the last couple of days was a bit off. There are fantasists who post on here and you can usually spot them if you go back through their historic posts.
I have toyed with the idea of giving up reading this blog, it takes up far too much of my life as it is. I am one of the fortunate ones with more work than I can handle at present (unfortunately as a salary slave not an owner) and many other things I should be doing.
This blog is like a soap opera, I have to dip in twice a day to get my fix and find out what you are all raving about. Christmas was hard, with nothing new to comment on.
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#142 SpareACopperGuv
Thanks for the encouraging words! Can't remember the last time a complete stranger did that - clearly there is hope for UK society after all :) Good luck to your daughter and her partner too.
Answering your question - yes, I am trying to market myself "globally" and am even attempting to learn Mandarin Chinese!(currently struggling through Chapter 2 with my speak-along CD...). I've just got to find out how to make all my lovely "fresh ideas" actually pay the rent! Maybe graduates can get an edge by offering global flexibility?
I think my generation (or at least the people I know!) are so crippled with debt that we won't actually have many kids for the subsequent generation. Which will compound the problem of course.
Honestly, the most realistic future for the majority of graduates is one where the best we can hope for is to break even, with no kids, no mortgage and no retirement. However you add up the numbers, it is impossible to draw any other conclusion that makes financial sense.
Is there anybody out there who can offer long-term financial hope to the current 18-30 demographic?
Someone inspire us GODDAMMIT!!!!!!
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#106, #122 fordeckdave...must be getting a good view of the future up at the front of the ship....
looks like GD2 indeed. Further it looks like there's lots of work for the next generation of historians in understanding just how we all went so wrong.....I would hazard a guess that the Financiers may be cast as the villains of the piece....near universal aquiescence to their dealings though!
Ideas for the future?
First look for new voices on the way forward.....too many statto's and lawyers are calling the shots at the top table.
I quite liked Cardinal Cormac Murphy-OConnor's recent assertion that communism died in 1989 and capitalism died in 2008.....3 million percent more thought provoking than "easing of fourth quarter gdp growth?"
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There are a lot of interesting opinions to digest on this board, but I wonder whether the future will be quite so extreme as painted here.
I wonder how many of those posting that the UK is or will soon become a "third-world country" have been to a third-world country? I wonder how their posts would read if they had personally walked through the slums, seeing the starvation, the people with nothing but the clothes they wear, the thousands of infants who die before reaching adulthood for the lack of simple medicine? The UK I see seems very far removed from that.
I wonder if there had been internet sites during the Great Depression how many would have predicted "the end of capitalism" back in 1935? Here it still is in 2009.
I wonder how many of those plugging emigration would actually be better off? Doubtless many of them would indeed enjoy life more in another country. But every country has its good and bad points. There is no utopia. Brits leave for a better life in New Zealand, but New Zealand sees more people leave than arrive.
We are in for some interesting times - and the extreme views may yet be right. But normally things pan out better than the pessimists think and worse than the optimists think.
We shall see!! :)
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#167 That's just sloppy management!
The withholding tax did not just appear out of the blue and should therefore have been a factor in your pricing and and contract negotiations. So why should HMG underpin your lack of management skill?
There are ways of overcoming withholding taxes - ever heared of counter trade?
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TIMESAVING SUGGESTION
When fans call into Rush Limbaugh they all say "ditto" which is sort of a "I completely agree with everything you stand for". Could I suggest we have something similar here when people want to slag off Gordon or the government, it would save a lot of reading if we just put
MORONS
or for the tories
NOVICES
or for the banks
KERCHING
or for the public
BAAAA BAAA
Then instead of a long diatribe.
e.g.
At Fault ? MORONS / KERCHING / BAAA AAA
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#168
You are right about the fatuity of trying to forecast accurately. It isn't possible even to produce really accurate histotrical data until its too late. Nonetheless, from all the straws in the wind tht one sees, this recession feels to me like a contraction in UK GDP of around 10% which is very severe. The bulk of this would seem to relate to financial sector activity which was largely worthless and to retail activity which we can do without.
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wharfgirl 163
I spend half my life trying to get retailers to use better designs and fabrics for all the age groups.
Its so depressing everything is specified to price points rather than
heres the RIGHT PRODUCT.
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#169
Hear, hear!
Yes these are bad times, but there have been bad times before and we have all come through them.
The going is tough - but that just means the tough need to wake up and get going.
We should not need a war to bring out the wartime spirit.
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In #146 chivalrousStephenG advocates freezing public expenditure - except defence. But why should defence escape a freeze?
Defence spending is concentrated in a small number of huge capital projects for ships, planes, submarines, missiles etc. These projects either employ very few UK staff in manufacturing or are purchased mainly from oversees. Whilst I would not advocate cutting back on the spending on the small scale projects that provide for increased operational safety for out troops I do question the value of the massive 'trophy' projects in terms of their value in defence of the realm. Essentially they provide materiel that is un-deployable.
What is the point of aircraft carriers when we appear not to be able to buy, or afford to run, the aircraft that can use them? Why buy helicopters when we cannot afford to buy the software that lets them work at night?
In short I see no logical reason why defence should be sacrosanct. Indeed I think it is quite reasonable also to question dubious overseas deployments.
I am also not entirely in agreement that expenditure should be frozen anyway - would it not be better in these straightened economic times to ensure that expenditure is concentrated upon projects that not only provide best provide value but also maximise the employment of UK based employees? This dictum, if followed, would do away with (the insane) ID cards scheme but instead employ more border guards and police on the streets.
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People having a go at A Cruzon hiding behind pseudo...s
Sure shum mistake
If he's got the money and contacts in Russian they could end up duffed up
OR
He's a nutter and he might hunt them down
Just a thought
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152 all my fault
Have to say I agree with jericoa post 169, your kids sound quite bright and sane to me, they will probably do fine. It just takes time. All I can say is you should enjoy them. You can set off for work one day and never come back, it nearly happened to me. Head on coming my way on the wrong side of the road at high speed, nowhere to go.
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I found myself in a Debenhams store today, along with only a few others.
On probably the coldest day of the winter so far (minus four here) I was looking for thick, warm, long-sleeved shirts. But Debenhams do not have any – not one. What they do have right now is rack upon rack of thin, short-sleeved shirts - the kind I buy in July.
Meanwhile, investors pushed the share price up by 20 percent on the day. If only I understood these things, I could be a rich man.
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#163. wharfgirl wrote:
about clothes shopping...
One good thing, (from a man's point of view) perhaps the only good thing, about an economic depression is that hemlines generally rise - late 1920's flappers looked attractively fashionable didn't they?
So much retail space is devoted to clothes and even men's stores are set out to attract women as the marketing people have realised that it is the wives, girlfriends that buy for their menfolk. This is so much the case that as a man shopping for himself, it is often quite difficult to find anything to buy at all - so being a man I don't. I do not however think I have failed, but rather I congratulate myself on my success, provided the holes in my socks are hot too large!
It is always the case however that the size one requires is never on the rail. This is the tyranny of being average if there is ever any item in your size you have to buy it immediately as it will not be there long as so many others are your size - why do so few small, large, extra large and extra extra large men do any shopping? One always has to wade through item after item to find the medium sized one!
Men can bitch about shopping too!!!!
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no. 163 wharfgirl, also nos 103, 123, 166, on debt-ridden graduates:
Of course it's always possible to study part time while working and pay as you go to get a degree - the Open University way. Probably easier if your studies relate to your work - which in my case they don't.
Part of the problem here is that 'going off to Uni' has become the bourgeois-bohemian rite of passage that distinguishes middle class people from everyone below them. When all your mates are going off to Uni it's very hard to resist the lure, even if you know you'll be buried in debt.
Staying with your parents, working in a warehouse say, and burying your head in your OU books when you come off shift doesn't seem so glamorous somehow.
Another piece of our unsustainable debt-financed cultural landscape which is going to have to change...
This thread may be off-topic, but the impact of the debt crisis on the vast higher education sector would certainly make an interesting topic for investigation by Robert Peston.
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Wharfgirl 163 - The world spins back. In 1964 I received the same advice about a Uni education. I left my seconday modern (with 6 O levels) at 16. I now look back on two successful careers (public then private sector) with Oxbridge graduates working for me and now on a pension on which I am liable to higher rate tax....in the end it is about application, talent and making yr own luck!
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Lets wait and see how these retailers are doing in 9 months time after they have tried to pass on 30%+ price rises during a period of deflationary pressure. The figures today appear good but it has all been about shifting lots of volume at low prices. That won't work next year for these retailers since their currency hedges expire. Both Debenhams and Next are going to be starved of cash flow. Combine that with short selling and I don't see one of them being able to survive. The other might but won't be looking forward to 2011.
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#68 "my loot remains buried on a beach"
I'd watch it if I were you, matey !! Along comes Long John Silver and it is "15 men on a dead man's chest....."
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#72 All very fine in theory but you have forgotten the most powerful force in the land - THE NIMBYs !!
They have killed more viable projects than any other source of destruction !!
Preventing a viable renewable resource energy project because "it destroys the view" is a sure and guaranteed way towards energy poverty !!
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re. 174
of course we aren't third world, it is partly stated for effect borne out of embarrassment and shame.
But we are certainly grubby second rate. If you travel in Germany, France, Spain, Italy, Holland, Scandanavia, it is just too painful to be confronted with the quality of their infrastructure compared to our own. (Airports, rail networks, pavements, hygene, office environments, restaurants, sports facilities, healthcare).
I am sure we pay the same (if not more) taxes as our competitors, but we squander so much of it with excessive layers of public sector and central government mis-management, short-sightedness, poor planning and shoddy design and implementation.
In case you haven't noticed, we are now being left behind by the Asian tigers, the South American bounce economies, and the old Iron Curtain satellites.
..... the problem is Government has to set the agenda and motivate the people. For all of my life I would say we have had no inspirational leadership from Whitehall in such a direction.
Oh for the day that happens............
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#91 "As for our alleged inability to compete with the Asian low-cost economies, our roads seem to be full of cars made in Germany, France and Sweden; the world's biggest cruise liner is about to make its maiden voyage, having been built in Finland. Not exactly a list of 3rd world countries, is it. Why should we be different?"
France and Germany hardly make many cars locally, these days. They have mostly outsourced to the Eastern European countries. Sweden has the advantages of a large source of raw iron and a nearby (Norway) source of cheap energy !!
As for Finland, they have the advantage of using cheap Eastern European labour from Poland and the Baltic states !! Should we now build ships in Scotland using cheap imported Bangladeshis ??
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re. 182 (enjoy your children)
I went through my car windscreen (black ice and a tree that wouldn't get out of the way) at midnight about 4 years ago, and used up at least one more of my nine lives. Every day before and since is a great day, you betcha.
Wouldn't it be nice, however, if our beautiful land and brilliant people could all realise their potential, cos there is no need for us to be in the sorry mess we find ourselves in (we all take at least a tiny slice of blame for the shambles).
One daughter still drawing and one son designing a Sterling engine at 1:20am in their bedrooms ...... so plenty of hope. (I stopped working at midnight, what a quitter)
Regards,
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Thanks for the comment Mr Peston, but a 7% fall in like for like sales is not one less item in 20, but 1 in 14! And you're the economics editor - perhaps simple mathematics was a tough one for our ex-bankers too.
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#106 "The CEOs of our major businesses are nearly all finance men."
How on Earth did you come by this statement ?? If you look carefully, you'll find that most of them came from almost any other background than finance !! Many came from the retail or marketing sides of the company !! Some were from the technical arms of the company. But few, very few, are from the finance side of the company !!
Such broad-brush statements are not helpful especially when it is not wholly accurate.
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#112 "Thus interest rates will rise, therefore pushing Sterling up against the Euro/$. "
A rising interest rate cannot, by itself, push up the value of the Sterling. It has to be coupled with a demand from Sterling, i.e. people willing to put their money in Sterling to take advantage of the better interest(s) paid.
If the perception is that the country's economy had gone to the dogs and the national borrowings are too unsustainable, then the higher interest rate will *NOT* attract money in, resulting is no change for the value of the Sterling !!
Iceland's interest rate is at an all time high but would you put your money in Icelandic Crowns (Krona) ??
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purpledoguk-
No club, just join the fray! The more the merrier! Everyone here has something to contribute-serious, wacky and just plain mad!
The only thing that annoys me is personal attacks on fellow bloggers-just ignore them-frankly it's not really cricket.
My daughter plans to work abroad after her degree as her field is not appreciated/developed enough in the UK, nor paid enough.
My son plans to move to Ecuador with his girlfriend once he completes his training and open a restaurant-too expensive to live here.
Talk about fragmenting families!
I am so darned frustrated at the wishy washy ridiculous behaviour of the politicians in this country I'd dearly love to have a go at it myself, and Alexander C would be brilliant as Chancellor-couldn't see any interviewer tying him in knots!
The short term and long term solutions are within these blogs-funnily enough several ideas have already popped up in the hand of various parties.
Problem is, the ideas on here need to be collected together, not fragmented, to be effective.
When I get over this damned bug, I'll put together the Bloggers Manifesto. Simple, easy to read bullet points.
I bet it would be an election winner!
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Oh Dear the anti CURZON factor has
beeeeen BUSY today?
Only one full on NASTY who looked at
the wrong Curzon!!
Re retail mark ups on clothing think:
300% to 400% in most dept stores
200% in the likes of TKmaxx
Remember 15% vat on the margin
Less the overheads incl theft etc. .
With regard to making clothes in the
UK Great??
But will any/many of you be prepared
to pay??
Most clothes cost less than they did
25 years ago.
Having said that there will be increases
over the next few years for various
reasons incl the Sterling crisis etc...
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Re MandS
Their clothing may be rubbish, but their food is gorgeous! This may tip the balance for them for a while longer-alternatively they could make it a separate company?
Dreaming of their food whilst in the grip of a tummy bug is not a good idea!
To get us out of this unholy economic mess, 3 things are needed:
1. Immediate removal of Labour Government
2. Coherent short term STABILISATION plan (to include immediate investigations and prosecutions, no matter how much kicking and and sreaming goes on)
3. A long term strategy to sort out our appallingly small exports, make farming, manufacturing strong, R and D in renewable energy, proper recycling facilities (instead of sorting for transporting to China), and create regulators with teeth to sort the financial sector (including banks) once and for all.
It may also be helpful to encourage people to learn how to cook from scratch, sew, knit,crochet, and make basic things for themselves.
Basically, we need to become more self sufficient, personally as well as nationally.
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well that's daft! M and a closing 10 food stores! My friend in m and s says the food sales keep the stores going- maybe their locations are rubbish!
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Do I detect a more positive flavour to Roberts machinations recently? Surely he is not reacting to the (unjust) criticisims projected at him by a certain vociferous few lately?
Come on Robert, you are at your magnificent, entertaining best when in apocalyptic mood even if it does incur the displeasure of McBroon who would far prefer you to embrace a rose-tinted Panglossian view of the result of his ham-fisted handling of the economy these last 10 years.
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Morning Robert, and a Happy New Year to you.
As the Business editor for the BBC perhaps you would comment on the FSA's decision not to extend the restrictions on short selling of financial stocks.
It would seem that both the US financial regulatory officials and our own dear FSA have decided that it was a mistake and didn't work.
Could it be because the market makers (ie the Banks themselves) were exempt from the restrictions and therefore had a vested interest in making money for themselves?
When the restrictions end 16 Jan would you expect further shorting of bank stocks (I certainly would)?
Would you advise those holders of what remains in RBS, LTSB and HBOS to sit tight cause recovery is just around the corner or would you agree that the share value in all of the above will be driven to zero (and you and Alastair and Mervin know why)?
I still don't understand what HMG have to gain by owning all of the banks.
Over to you...
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#166 grannyfromthesticks
"in my FE college we even dreamt up a degree in garden design which brought in large funding per student, due to all those garden design progs we used to watch.
I ask you how many graduate garden designers does this country need?"
I always thought the whole point of going to university or any other higher education institute was to get an education, NOT to get a job thereafter. Since when were universities there to churn out graduates into meaningless jobs? Should people interested in politics, anthropology, history - or garden design - all switch to computer science or accounting, because these are the only areas of study with "good job prospects?"
#121 dknotty
"Something must give otherwise the UK will be an utterly broken country in 30 odd years when people my generation and below are starting to retire with no pensions, no property, nothing."
No one retires with nothing in the UK. The worst you will get, if no savings or house, is a state pension with full housing and council tax benefits.
#143 glanafon
"If a person is unemployed it is extremely difficult for them. The prospect of becoming long term unemployed is real for some which makes life very very difficult."
This is just not true, and being negative for the sake of it. Have you ever actually been unemployed? A person who is unemployed either receives a reasonable amount to live on, plus housing benefit and council benefit, or has sufficient savings to not need to resort to government assistance. A family of four gets around £400 a week, once all the various benefits and "payments on one's behalf", such as council tax, are taken into account. And that's without needing to resort to disability payments. Not to mention quite generous when compared to the after tax take home pay of a large number of the working poor. There may not be much free time, given the effort one has to make to get another job these days, but at least in the interim you get to not have a boss. Is this really such a disaster?
Sure, you could be made redundant at 40, then face 30 years of unemployment and never work again. If that fate were to befall me, I would focus on the upside, such as free time (assuming one eventually gives up spending eight hours a day looking for work and settles for a couple of hours a day instead - much more civilised....) and no boss. As to a limited income, so what? Most working people have that anyway.
#197 alexandercurzon
"Re retail mark ups on clothing think:
300% to 400% in most dept stores
200% in the likes of TKmaxx"
While, on the face of it, those sort of margins seem like a ripoff, I wouldn't begrudge clothing, or shoe, retailers their markup, provided they sold something I wanted to buy. I too, like poster #163, was in Bluewater last weekend, - what a disappointing experience. The French, Canadians, Americans, Australians and Germans don't seem to have a problem with getting clothing retail right - why, in Britain, do we have to contend with such dowdy, frumpy, out of date, poorly designed (e.g. large size coats with arms that are way too narrow) clothing? Asda £3 jeans may not be fashionable but at least they fit and are the right length. Is this really too much to ask for?
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171
I may be able to tell a good egg from a bad one fashionwise. Sadly this does not make me a hen.
173
You sound wonderful. Wish I were still employing people cos I would give you a job. It will be this country's loss, if we cannot offer you the future you deserve.
Ditto 152.
174 excellent post. but where's the fun in writing moderate sensible contributions when you can be apocalyptic and colourful. Totally agree about NZ. Have pondered solving my probs by just going home but it's deathly dull compared to London.
Must wean self off this blog and get back to work, When you are posting at 6.30 am you know you have a substance abuse problem. :-)
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Gosh, I would have said a fall in Sales of seven percent would have been pretty disastrous.
Still, they are not in Administration yet which must count for something.
I am still amazed at the resilience of the Housebuilders !
High Debts, very very low sales, mothballed projects, how are they managing ?
Plus the stock lenders and short sellers will be out in force again later this month.
Time to sell whilst the FTSE is high (yes later in the year its current position will be seen as high).
And we have a big big lump of import inflation (goods from the Eurozone) to contend with.
And of course the price of stamps up three pence to thirty six pence, says it all really.
Time to consider the layout and design of a vegetable garden.
Just a little work and a few seeds and you can have free veg later in the year.
The best investment anyone will see this year.........
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202;
Those margins are slightly out.
For example a shirt, manufactured in Korea sixty cents (US), shipped to Hong Kong, resold six dollars (US), sold in London thirty pounds (sterling).
Just shows how wrong the current Exchange rates are !
Certain currencies are very much undervalued.
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the worst thing about the credit situation now is ..the media make it worse than what it actually is i suspect.(but its bad enough)......the best thing now is to call a general election ...get rid of brown(because hes a liability, made shocking mistakes..and is far out of his depth)...then get the media to shut up and concentrate on things that really matter.....a government with cameron and ken clarke would be a start to recovery..........and in the future base borrowing on 2.5 times income +1 other at 1 times income....then we get some reality back into the situation.
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106:
There is an unfortunate assumption that a gentleman can turn his hand to anything and expect to succeed.
In modern terms this means Graduates.
The assumption is that someone who has a good memory, and can string a sentence together is automatically qualified to manage a business.
This is unfortunately untrue.
Many businesses have been run into the ground by people who though academically very clever, actually do not understand the fundamentals of their business.
Possibly some of the most successful businesses have managers or owners who have risen from the shopfloor.
They understand their business from the ground up.
Perhaps this has been the problem in Banking.
Too many Gentlemen/graduates who have never served a customer in a branch or observed the practicalities on the ground.
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#163 warfgirl
totally agree
him outdoors buys his shirts at the local oxfam shop, targeted to the time the local posh school clears out its lost property, he now owns about 40 beautiful, expensive, cotton, hardly worn shirts, very stylish
also in agreement that blogs should loosen up, not worry too much about spelling etc, but please mr glanafon
BREAK UP YOUR PARAGRAPHS
it makes it easier to read online for grannys
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We import sports goods and pay for them in US dollars. In the last 16 weeks our costs have gone up 25% and I have been baffled by all the talk of deflation. I can only assume that the pundits have gone to the text books to see what has happened in previous downturns in the economy and reported accordingly. Unfortunately, since the last recession manufacturing of consumer goods,clothing etc has shifted outside the UK making us hugely exposed to the currency markets.
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204 supercalmdown
"Time to consider the layout and design of a vegetable garden.
Just a little work and a few seeds and you can have free veg later in the year"
I am sorrry to say that you're wrong. It is an awful lot of work, especially to begin with, and only truly sustainable if your main focus is on improving your soil, not getting instant results. There is a good reason that retirees have the best veg plots and gardens, its partly the accumulated wisdom gained from experience but mostly due to the 6 hours a day they can potter profitably around in them!
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If ,as many bloggers suggest,we are no longer manufacturing anything in this country so what do we have to export to Europe.
The politicians tell us that coming out of the EU would be commercial suicide because of the trade links with Europe.
what I would like to know is what are we exporting to Europe that justifies being a member of this hugely expensive non democratic club.If it's not much then we could save £billions by leaving the EU.
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@ThorntonHeathen
Yes, gardening is hard work, and if you are lucky you get out what you put into it.
But there are crops you can start immediately eg spuds on the ground, runner beans up the walls, all sorts in pots and windowboxes.
I'm looking for guides put out in WW2 on 'digging for victory'!
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Suoercalmdown
Excellent point-I've had various careers in my life, and your observations are so true.
Now as an employer, I have found people skills, basic Maths and English, initiative, common sense and good work ethic to be very thin on the ground. Even answering the phone in a cheerful manner seems impossible for some!
Graduate skills are great in many areas which require problem solving, but have you ever seen what happens when a graduate of 'management studies' tries to manage people in. An industry they know nothing about?! It's a blood bath!
Good managers have the respect of their staff-this is gained through them knowing how to do every job of their team, being prepared to help them do it in a crisis, and respecting the team members first. It does not take a degree-it takes experience.
In our company, every manager will get on the factory floor when we have a manically busy time. This includes the directors.
Many successful SME's are the same-large corporations need to take note!
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#180 - I only excluded defence spending because, for whatever reason, there is no sign of deflation affecting its costs - as illustrated by most of your examples really. A very, very high element of the rest of public spending is salaries or index linked welfare payments. Why should any of these be rising if, as forecasters expect, RPI is shortly to go negative. Further, a period of belt tightening would help the economy. I sympathise with youtr final point about ensuring investment (if it really is investment) is judged on its long term benefits but overall, if we are to stimulate the economy, wouldn't it be better done by tax cuts targeted to stimulate employment and investment, rather than import based consumption.
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#213 TigerJay
I agree with most of your points. Graduates are graduates of an education system not a working environment so we should not expect too many work skills, but the ability to learn and adapt - and most do.
I like the way your management can help out on the shopfloor. But do you encourage the reverse? Where you expose the shopfloor to the process of taking management decsions so they can grow and progress. (I'm sure you do, since everything you say so a holistic approach to business.)
Many of my customers have been taken over by foreign organisations in the last 20 years. All their decision making is done abroad (sometimes by UK managers) but unseen by UK staff.
How can you prepare yourself for management when you don't see it in action and have the chance to learn by example (good or bad - and you learn more from the bad). Life is not long enough to make all the mistakes yourself.
How can you aspire to management when so much of it in the UK is about keeping your head down? Initiative has become a dangerous word.
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202 dktreesea
Yes I have been unemployed I know what I am talking about.
In the early nineties I had a coventional career, a senior technical management position, and we also ran a consultancy with major blue chip customers, primarily in the UK but also in Europe and as far afield as Japan.
Lamont burnt a large amount of my money directly or indirectly trying to prop up the pound. Credit seized up and we refuse to supply anybody who did not at least make some move to clearing the backlog.
Payments intervals went from under a month to 18 months, with the same companies on the phone begging for more intellectul property to be supplied. Some of these companies issued cheques which then bounced because their banks reneged on agreement to give value. To this day some payments have not be recieved.
I saw the CEO of one of the plcs spouting the other day on the TV, unsurprisingly they are in trouble. The business we had was very viable in terms of customer demand, but the customers were broke due to cashflow so the business was folded. Those businesses held our money to avoid going broke. Incidentally in Europe this would not have happened becasue legally payment is due after a month, not in good old blighty. As for banks - one day on the phone trying to offer 100k credit, the next illegally taking money from an account. Oh yes, and they are one of the banks in trouble.
My wife became ill and at one point the doctors were talking about MS. We had to dump a previously valuable period property onto a frozen property market and lose well into 6 figures of equity. I moved the family to rural wales to give them a clean and safe environment and space for my wife, fortunately to recover.
I was in due course dumped when the outfit I was with misguidedly decided that the money was in management consultancy which unsurprisingly they were no good at.
We set up what we do now because we were overqualified, too old, too knowledgeable, too experienced, too damn good, too whatever, I have heard the lot, to get a job.
So nobody can preach at me because unlike most I have done my time in front of the mast. My statement about being longterm unemployed damaging the individual is from direct experience and direct association with unemployed people, of all ranges of qualification from zero qualifications to the highly qualified and experienced ex finance director of a major car importer who could only give his skills away.
I have mixed with social class 5 the supposed dregs to social class 1 the supposed cream. They are all much alike other than the top draw have money to buffer them.
We would be currently classed as asset secure, liquid and credit worthy. We are not enamoured of debt.
I have noted that people do not always like what I say. Sorry, I call it as I see it. I state it so that the illusion pumped out by large corporations and government is not the only perspective.
I cannot rememer the name of the character, but in the ancient greek tale of the Golden Fleece the crew dump a sailor on an island because they need to lighten the load on the boat. They trick him ashore and abandon him and sail away. That is exactly the effect of a recession. It is arbitary in impact and it is Labours major crime. I am whole opposed to Brown, in my eyes the man is a criminal, he has been negilgent in the central duty of a chancellor, plus Blair who clearly saw this coming and jumped ship following the IMF warning. They are worse than Lamont because I do not believe Lamont saw it coming.
Least there be any mistake I am quite happy to address anybody face to face in the matter including Brown, but I doubt I would be welcome.
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#215
Thankyou for your kind comments
Yes, we do it the other way around too-we regularly have work shadowing and time in 'hot seats' for several reasons:
To foster appreciation of each others' skills
To ensure at least one other person knows the job in case of sickness and to deputise in holiday season
To help broaden the skill base of all our employees
To develop self confidence and self esteem of employees
To build a solid foundation for team working.
To name but a few.
Unfortunately I fell foul of this approach when my PA left a couple of months back! She wanted to try a different field to use her new skills in!
Got a new one and starting the process again with him!
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Of course unemployment is the real danger but unemployment is an effect of many other things. As a key supplier to the retail trade of imported goods my costs have risen by 30% because of the fall in £/$. I can't forward hedge significantly because my bank sees that as part of my overdraft. I can't pass on my costs to my customers so who suffers.....yes I make people redundant to save my company. The abandonment of sterling has gone too far, there is no export market capable of growth to take advantage....thankfully the big retailers have woken up and spoken. Too late!
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Barclays has just annouced 400 redundancies in the IT department.........the clowns that brought the company to its knees remain!
Regarding retail mark up......normally 250 to 300% it works like this...£10 add mark up
so £30 add vat at 15% so selling price =£34.50 deduct cost of article plus vat payable to government so in total around £15 leaves £19 to pay salaries rent rates heating lighting etc etc what remains(!) is profit!
if the article is reduced in sale with 50% off it sells for£17.25 less cost of goods and vat say £12.50 so then less than a fiver is left to pay the overheads etc..........
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I've heard a lot about how wonderful it is to be outside the Euro because of this fantastic currency flexibility. Turns out that 'flexibility' means 'able to tie yourself in knots'. God save the Queen and the UK Krona, eh chaps?
When keeping our heroic British currency (hurrah!) means clothing prices hit the roof right in the middle of a severe recession, I hope that the editors of the Mail, the Sun and the Telegraph will be man enough to sit in Trafalgar Square publicly eating their words.
Of course, if sterling does go into full-blown collapse, they won't be able to afford the imported paper to print their words on.
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Brown's dilly daddling and making useless expensive gestures (reduction of VAT) has not and will not have the desired effects of rallying the public to spend. As long as those !safe! jobs like employment in M and S suddenly evaporate along with millions of others, no one in his right mind is going to rush out and buy a new jumper or a pair of trousers. With the pound hitting an all time low against all major currencies is the "trick in time" Brown has been waiting for. With the pound and the Euro worth about the same, why bother with the expensive pound. As members of the EEC Britain has enjoyed a long and extended run on its currency, but one can assume Brown would move now if he dares. If he doesnt, it will cost the British public a hell of a lot more later. But there again, does Brown ever do anything right at the right time and for the right reasons? The man is a senile old Scottish goat who has forgotten how to clamber over rocks. Time he went and fast
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Talking of Barclays Bank. I live in Russia and have maintained a small account with Barclays. In the last 18 months it has been neccessary to scream, shout, threaten and report the staff of the bank on more than 5 occassions. The latest one remains unanswered for SEVEN months despite 3 letters asking for explanations and on whose authority certain actions were made without my authority. British banks remain the most expensive, worst managed, laziest, and always avoid telling you the real truths. They should have been forced into bankrupcy
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#220
what makes you think the pound will stay low? with the amount of money this government has to borrow, and real inflation soaring, interest rates are going to be at least 6% by third quarter, and so the pound will be back way above the euro!
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Robert:
Prudence was such a nice girl...
And, Oh how we all despoiled her...
Now Daddy has come to avenge...
We knew what we were doing...
We've seen the consequences before...
Don't do the crime, if you can't do the time...
'It's all Gordon's fault' is no excuse...
What 'reasonable man' ever believed that Gordie could put an end to 'boom' and 'bust'...? Not even teflon Tone believed it...
He who is without sin, cast the first stone...
Now: 'Guilty', or 'Not Guilty'... 'Not Proven' is not an option for Gordie & his Darling side-kick. For the rest of us, 'It's pay-back time'...
How else should it work...?
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Mr Peston, the penny has finally dropped, in the days pre-globilisation a weak pound provided opportunities to exporters of UK manufactured goods. In this current climate where manufacturers rely on imported content they are vulnerable to the weakness of the pound. Many original equipment manufacturers are being forced to buy components in Euros on a proforma basis, because both credibility and confidence is low.
As we know emotions play a larger part in financiasl stabilty than the reality.
Whoever foresaw the euro on a par with the pound must have been pleased to see their predictions realised. I may be cynical but I prefer to believe that the weakness in sterling against the euro has been manufactured to reduce the costs to EDF of the British Energy deal.A scenario which I would have expected a journalist of your stature to explore
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So sales are down 3 or 7%, depending on whose results you look at.
But profits are up.
I conclude that this means that we are just buying more imported cheap goods, so the only beneficiaries are factories in China.
Just what we need.
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