A View on UK Economic Recovery; Bank Lending & SMEs:

Some interesting statistics flying around over the weekend what with the economy doing far better than expected it looks like the Bank of England governor may need to make a decision on interest rates in a matter of a few months. I am not sure Carney will be forced into making the decision that soon. He doesn’t strike me as a man who will be forced into any situation. The economy badly needs a long spell of stability and low interest rates, not a step into the unknown that a hike in rates would bring about. We have a fledgling housing market that is seeing a well-earned recovery and with wages still suppressed there is unlikely to be a return of a much feared ‘bubble’. Carney is more likely to link wages to inflation as a ‘get out of jail free card’ to get himself off the hook.

I may be proved wrong but I am hoping we don’t see any rates rising until well into Q4 2014 or early 2015.

Barclays decision to ‘transfer’ 800,000 of its small businesses away from free banking towards a charge based structure will do no favours for the already hammered reputation. Barclays insist the move will only affect about 250,000 businesses currently banking with Barclays – so that’s all right then. Business lending has never been a priority with the banks barring a few exceptions and is rarely more than 10% of any the major banks total lending. Major banks do not like lending to small businesses and never have to be fair to them and the Basel II rules make it more difficult for lending to take place.

Okay, so I understand business lending had risen slightly over the first half of 2013, but if you are already starting from a very low starting point then it’s not really great news. In any event, I now understand the percentage of lending to small businesses has fallen back by about a third to around 7% of total bank lending that may contribute towards businesses having cash-flow problems and seeking debt advice sooner, without the support they need from the banks. The bottom line is small to medium sized businesses are just not a core demographic for any of the major banks and the sooner businesses realise that banks are no friend to business the better.

Written by: Mike Smith

Peterborough NHS Speculation - Hit Back

Peterborough and Stamford Hospitals (PASH) NHS Foundation Trust has hit back at comparisons made of its financial position with that of South London Healthcare NHS Trust. PASH NHS Trust was forced to issue a statement amid speculation over its financial position following news the London NHS trust may enter administration as a result of a £69 million hole in its finances for the financial year 2011/12. However, Nigel Hards, chairman of PASH NHS Trust said the organisation has created a five-year recovery plan to deal with a £54.3 million loss brought about by PFI repayments for its £289 million Peterborough City Hospital. PASH have explained that as a foundation trust they are regulated in a different way. Although there are significant financial issues there is also a five-year recovery plan in place which is in the process of being approved by the Department of Health. It is then a situation that will be reviewed to help assess the recovery.

The hospital have made it clear that staff and patients should be assured that although there are issues, the board is working closely with the regulators in order to stabilize the situation.

Nigel Hards, chairman of PASH NHS Trust says “Although this cannot happen immediately, we believe we have a robust plan that spans the next five years.”