Comment: Pressure is mounting on ‘Austerity’ Osborne

Terry Murden
Terry Murden
Share this article
Have your say

THE latest news from the manufacturing sector gives few grounds for believing things are getting any better.

Expectations at a year low and with prices likely to rise the gloom is spreading to the Bank of England which is already fighting a losing battle over inflation.

The Bank’s monetary policy committee decided at its recent meeting against pumping more money into the economy after the recession was declared officially over.

But it looks as though the case for more quantitative easing is mounting by the day, particularly as the factors that saw the UK return to growth were largely one-offs.

Deputy Prime Minister Nick Clegg yesterday said £225 million of new money to help kick-start stalled housebuilding projects will be included in the Autumn Statement, a move that the CBI said would help build confidence.

It appears, however, that confidence is in short supply, fuelled by sluggish demand, continuing worries over the eurozone and the return of inflation.

Help for the housing sector is a start but pressure is mounting on Chancellor George Osborne to find some more silver bullets in his Statement early next month. His reluctance to ease off on the austerity measures will give him little room for manoeuvre.

Investor’s making a date with destiny

INVESTORS were smitten with internet dating company Cupid’s declaration that it is well ahead of the targets it set when it floated two and a half years ago.

The shares bounced after a lengthy spell in the doldrums prompted by disappointment at founders Bill Dobbie and Max Polyakov offloading big stakes. They also were unimpressed by Polyakov’s early departure to another venture in the US.

Since then, Dobbie has been driving Edinburgh-based Cupid’s expansion around the world, moving into new territories and mopping up businesses on the way.

Cupid has been something of a phenomenon in a sector which is growing rapidly. It is no surprise, therefore, that it is attracting interest, notably from the US where Interactive Corp is said to be considering a bid of about £3 a share, against last night’s close of 187p.

Sooner or later Dobbie will probably be persuaded to sell and shareholders should hold out for a slice of the pay-out.

Cable puts his money where his mouth is

VINCE Cable, true to his word, is taking action to tackle City excess. Yesterday the Business Secretary pledged to enact the recommendations that Professor John Kay made in his review of UK equity markets in July, specifically the issue of short-termism that has blighted financial markets for years.

Kay urged the abolition of quarterly reporting and a tighter control on pay, both of which will be supported by the government.

The former should ease pressure on hard-pressed managements finding themselves on a treadmill of updates. Three-monthly reporting ties up too much management time and resource and is one of the biggest contributors to the short-term culture.

A further clampdown on bonuses will bring a sense of relief to those frustrated by the greed and feeble excuses that have allowed too many to prosper wrongly and a cost to the greater good.