Martin Flanagan: A glimmer of hope on the scoreboard

WAS IT really only just before Christmas when many were wondering whether Britain was on the edge of a double-dip recession?

Gloom from the eurozone crisis was pervasive, and domestic data, from manufacturing to retailing, was poor. Recession redux seemed a distinct possibility.

But, without any fireworks, more recent data has been steadily less worrying and the possibility of renewed recession has receded. There was more of the same of this yesterday, with figures from the UK’s dominant services sector growing less than expected in February, but resiliently growing nonetheless.

The Markit/CIPS purchasing managers’ index fell to 53.8 from a ten-month peak of 56.0 in January.

That was somewhat less than more upbeat forecasts of 54.9, but it is still comfortably north of the 50 that indicates stagnation.

It is particularly important given that services, everything from hotels and pubs to transport and accountancy, is the biggest bit of Britain’s economic cake, at 75 per cent.

Employment and optimism in the sector also picked up, and it came after construction, about 6 per cent of the economy, grew at its fastest in nearly a year last month. Recent mortgage figures have also been better, if probably flattered by a scrabble before the imminent ending of the two-year stamp duty holiday.

Taken in the round, and assuming no new downwards spiral in the eurozone – perhaps a biggish if – the economic dials definitely seem to be edging round towards perhaps pale growth this year but away from contraction.

The British Chambers of Commerce didn’t hedge its bets yesterday. The BCC forecast that we would avoid recession and that the Bank of England would not need to inject any more stimulus, to wit: the buying of government bonds to give banks more money to lend to the economy.

None of the above suggests the road will be anything but bumpy this year. There remain too many headwinds, including rising unemployment, consumer nervousness and a business disinclination to invest amid customer caution, as well as the well-documented woes of the eurozone, our main export market.

But staying clear of contraction is still a positive. The experts are pretty uniform in suggesting it is always harder and longer to get over a financially-induced recession than one that is just tied to the normal economic cycle and buffetings from shocks on distant shores.

As such, to use a cricketing metaphor, maybe we will have to win this recovery in singles rather than with boundaries.

And the good news is that the services sector has just stuck another one on the scoreboard.

Merkel unlikely to give in to 6.5% pay demand

BRITISH public sector workers, many of whose jobs and pensions are under threat, must look enviously at thousands of their German counterparts who are out on strike in support of a demand for a 6.5 per cent wage increase.

Banks, buses, daycare, hospitals and nursing homes have all been hit. The situations are very different, however. The German economy is still the eurozone’s locomotive, and that country is not swimming in the levels of public debt Britain is.

Germany can simply afford a more generous public sector settlement than we can, unpalatable though it is to accept.

That does not mean Angela Merkel’s government will simply roll over. Some things never seem to change. Public sector employers have dismissed the wage demand as “unrealistic”.

A much less risky business for STV

TO USE the City jargon, Scottish broadcaster STV’s business model has clearly been “de-risked” by its new agreement with ITV on new networking arrangements.

After the litigation between the parties last year, the new deal has the twin advantages of clarifying the operating relationship between STV and ITV and reducing the former’s net debt in future.

The Scottish group is boosted by the requirement to carry less working capital because, under the new agreement, it and UTV in Northern Ireland will only have to pay for programmes taken from ITV on a transparent, annualised basis rather than a share “upfront” that could later fluctuate in value.

Secondly, the deal will allow STV to resume its £10.8 million legal settlement from last year’s dispute with ITV primarily in programmes rather than cash. That will also help STV’s financial model.

Women in business want recognition, not quotas

THE quota argument about the minimum level of women on the boards of publicly‑listed companies shows no signs of abating, with the European Commission looking to legislation because some national governments are dragging their feet on boardroom gender re-engineering.

However, it is hardly a simple issue. The EC wants a minimum of 40 per cent female membership of corporate boards, whereas the figure in Europe is currently only 12 per cent.

These waters are difficult because many female executives also oppose artificially arrived at quotas, believing they defeat the whole object of meritocracy, if not being slightly demeaning.