Comment: Economic recovery taking hold

Terry Murden. Picture: TSPL

Terry Murden. Picture: TSPL

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THE good news just keeps on coming. Following a number of positive surveys on confidence comes news of the highest British export figures since the 2007 downturn.

On top of that net lending to companies by the banks has increased for the first time since January and inward investment continues to benefit Britain more than other countries.

Add in the £800 million that Volkswagen is investing in the UK to build a new Bentley sports utility vehicle and there is plenty to smile about. It even stopped raining yesterday to allow the sun to reappear.

The figures and trends bode well for tomorrow’s second-quarter gross domestic product (GDP) data which is expected to show that economic growth accelerated from 0.3 per cent in the first three months to about 0.6-0.7 per cent.

Yesterday we had news that John Lewis was adding its name to those retailers such as DFS and Sir Philip Green’s Arcadia group who are increasing the volume of goods they will be buying from British factories.

All this is bound to be a pick-me-up for the coalition and for Chancellor George Osborne in particular who has been keen to rebalance the economy away from a reliance on financial services to manufacturing.

However, in spite of the anecodotal evidence the data is not likely to show that such a shift is taking place.

That said, growth seems to be taking place across the board, with exports for services companies growing at a record rate.

This unexpected upturn will have an impact on thinking at the Bank of England, whose new governor Mark Carney may be relieved of too much pressure to crank up the economic stimulus packages at his disposal.

Bluff and bluster in battle for the skies

MIchael O’Leary’s battle with the competition authorities over his attempts to buy Aer Lingus has been one of the longest-running takeover tussles for many a year.

It has also been a giant game of bluff, with neither side coming out with too much credit.

Much of it has been bluster on the publicity-seeking O’Leary’s part and his latest pledge to sell his 29.8 per cent stake to anyone who wants to buy the airline looks, on the face of it, like another bit of posturing.

However, analysts believe there are no other bidders and that his gesture proves that there are no competition issues.

When the Competition Commission makes its final decision in September it may force him to sell his stake. But O’Leary will claim there are no buyers, leaving him holding a minority stake in an airline that does not want him on board.

SLI needing to avoid losing more top staff

BANKERS always claim they have to pay the going rate, aka big bucks, in order to hire and hold on to good staff.

While mere mortals in the rest of the workplace claim this as greed dressed up as flannel, there is nothing new in paying top dollar to attract and retain the best people.

Standard Life Investments is looking to review its pay structure after losing top fund manager Euan Munro to Aviva Investors and others in its top team.

Munro’s successor Guy Stern believes SLI does pay enough to keep top staff. But if it wants to stay among the top performers then it may have to pay whatever it takes.

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