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Sterling is now very weak vs the Euro and US Dollar. Short term this may suit some exporters and tourists will flood in. However most commodities are Dollar based so inflation will filter through. How long will it be before market forces reverse the trend? Other countries have similar economic problems so why is the Pound suffering so badly ? Would we have been beter off if we had entered the Eurozone a few years ago?
Im very happy I earn Swiss francs and the misses spends it in Sterling.
What worry’s me about England are so many people losing jobs just before Christmas must be hell. A very successful UK company I used to work for had a full order book but still went under last month what is going on. Bad cash flow?.
The biggest problem with the labour party, and I am not a ranting tory, is they always have operated on a tax and spend policy even when they have not had the money, they believe in grand schemes whether they are cost effective or not. Another major issue which has made the situation even worse, and this applys to all partys', is that over a long period virtually all of the UK's assetts have been sold off, now there is nothing of value left in the country.
"A very successful UK company I used to work for had a full order book but still went under last month what is going on. Bad cash flow?."
The problem is shortage of credit.
The biggest rival to the company I work for was badly hit last week when three of their major customers went under owning well over £1m each.
These were all big companies, with lots of work, but their customers weren't paying, so eventually the banks stop the credit and call the boys in to sort things out.
We're ok at the moment, because we don't have many customers with 7 figure credit limits and we're pretty proactive in chasing bad debt, but no-one is 100% safe until the banks reopen the credit lines...
You're partly right - the banks have a good deal to answer for as far as credit is concerned, and if they don't get it together pretty rapidly they'll find themselves being legislated into easing the burden on businesses.
I say 'partly right' because of course the other big problem is us - we're not spending enough, and if we continue like this things will get steadily worse. The balancing act for governments in these situations is in finding ways to stimulate consumer spending without encouraging spiralling personal debt - we need to spend our income, not live on borrowed money.
Will the person who has the magic solution please step forward? If such a solution existed every government in the world - of whatever persuasion - would be using it. In the end it's all about confidence, and at the moment there's not a great deal of that about. It's going to be a gradual process rather than a quick fix, and as is always the case there will be casualties - both on a corporate and personal level. The best most of us can do is get up every morning and go to work - if we have work - and don't borrow money if at all possible. Spending with confidence is harder - how can consumers be expected to help the economy by spending when they fear the unknown? If you are worrying that you may not have a job next month you're hardly likely to book that holiday of a lifetime, or order that new car, yet that's exactly what will help our economy recover more quickly.
Well I'm doing my bit then. I've ordered my new Passion Waggon (But have no body to supply the passion and I am not buying that) I've spent more money over the last six months than I have in the last ten years. In other words I am going through my savings as fast as I possibly can. I've even paid for my own funeral but have no intention of going just yet. I'm on a spending spree at the moment and that's the way it will be until I am spent up. I may regret it later but then again I may not. I might even go on a cruise next year although after my last two and a half years before the mast, (on the grey funnel line) I swore I would never set foot voluntarily on a ship again.
Let us hope that things get better quicker than forecast. In the absence of a guru I will tick the box!
Isn't it sad that all of these problems are put down to lack of credit.
Whatever happened to making a profit and ploughing it back in, rather than using other people's money and always doing things on credit?
Yes, I know it's an over simplification, but I do feel that sometimes people see credit as the answer to everything, both in the business and domestic fields.
I have nothing against credit per se, I do, after all, have a mortgage, but it has now become the norm.
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