Tag Archives: Bank Of England

In April this year the shiny new CMA (Competition and Markets Authority) emerged from a union of the former Office of Fair Trading and the Competition Commission. People are watching it closely: Initial shock revelations include someone has been price-fixing galvanised steel water tanks and online review websites are not trustworthy. Well there’s a surprise. Whether or not the CMA gets around to reviewing something worthwhile such as supermarket tactics to bankrupt independent retailing remains to be seen.

Review websites often ‘lose’ poor feedback in return for sponsorship

According to the CMA some 25 million shoppers use review websites such as Amazon and TripAdvisor to ‘inform’ their purchases but many of the reviews are rigged. Review websites often ‘lose’ poor feedback in return for sponsorship, whilst manufacturers offer rewards for favourable reviews and post criticism of competitors. None of this comes as a surprise to anyone over 8 years old but encourages genuine shoppers to post outrageous comments about some products. I recommend Amazon’s eye-wateringly funny review of ‘Veet for Men Hair Removal Gel Cream’ at www.amazon.co.uk/Veet-Men-Hair-Removal-Cream/dp/B000KKNQBK

Someone who does believe in frankness and honesty is the (Canadian) Governor of the Bank of England, Mark Carney

Someone who does believe in frankness and honesty is the (Canadian) Governor of the Bank of England, Mark Carney. Last month he gave a highly critical after-dinner speech to city bankers to coincide with publication of the ‘Fair and Effective Markets’ review by HM Treasury. His speech left the audience squirming uncomfortably on their well-padded behinds as they remembered how the (now disbanded) Financial Services Authority failed to reign them in prior to the financial crisis. Carney was not averse to a bit of self-criticism either, describing how the Bank of England allowed the crisis to develop. ‘The Bank’s contribution fell short…and neither identified the scale of risks in the system nor spotted gaps in the regulatory architecture’ he said. Arcane governance had blurred accountability and more would now be done to strengthen control. He added: ‘and that includes 10 years in Wormwood Scrubs for any of you guys with your hand in the till’ - or something like that. Former Governor of the Bank of England Mervyn King, former FSA boss Hector Sants and former Chancellor of the Exchequer Gordon Brown chose not to comment.

The Treasury review proposes extending criminal sanctions from investment bankers to foreign exchange traders

Chancellor George Osborne also spoke at the dinner. He publicly supported Carney with: ‘The public rightly asks: Why is it after so many scandals so few individuals face punishment in the courts? Individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are.’ The Treasury review proposes extending criminal sanctions from investment bankers to foreign exchange traders plus harsher penalties, something shareholders in RBS and Lloyds would doubtless like applied to reckless executives. City of London Lord Mayor, Alan Yarrow said upholding professional standards should be the norm. ‘It’s like a supermarket with no security cameras – if someone takes something without paying, it’s still theft. There is no escape. People should uphold professional standards irrespective of whether the regulators are there or not.’ Well, actions speak louder than words Alan. We’re waiting.

Pickles made few friends amongst local councils whilst spearheading local government spending cuts

Meanwhile, having won a clear majority in the general election the Prime Minister reshuffled his cabinet without needing to consult his coalition partners. Eric Pickles, plain-speaking head of the Department of Communities and Local Government was promoted to the House of Lords with a Knighthood and an ‘anti-corruption role’ which sounds a bit South American. To replace him David Cameron promoted Greg Clark (47) to become Secretary of State for Communities and Local Government. Described as a ‘soggy left’ Conservative from Middlesborough, the former Financial Secretary to the Treasury has a hard act to follow. Pickles made few friends amongst local councils whilst spearheading local government spending cuts and the 2011 Localism Act which gave community groups the right to take over council-provided services. His enthusiasm for the ‘Big Society’ agenda bolstered a reputation as a vocal critic of local government, particularly after the child sexual exploitation scandal in Rotherham and local governments’ ineffectual response to the 2014 floods. Greg Clark faces an equally tough time at the DCLG as he now has to implement a second round of even deeper cuts to reduce the governments spending deficit.

Canadian lobsters are now in the front line thanks to Smartphone technology

And finally: Another Canadian product has also been in the news – Lobsters. In the struggle to attract consumer spending Canadian lobsters are now in the front line thanks to Smartphone technology. Shoppers in Newfoundland can now use smartphones to scan live lobsters in fishmongers tanks to discover where their seafood is from and who caught it and when.

Tracing food back to source is not a new idea but using QR code tags to provide customers with this level of detail is

The traceable lobster program is part of thisfish.info, an initiative of Ecotrust Canada, an environmental charity. Each lobster caught by a participating member is tagged with a unique QR code which customers scan for information about the catch – when and where it was caught and by what method, plus a biography of the fisherman. Tracing food back to source is not a new idea but using QR code tags to provide customers with this level of detail is. Some Newfoundland restaurants have been serving QR-coded seafood for a couple of years and boosting sales by linking into wider consumer trends. A spokesperson said: ‘Customers love a glimpse into the lifestyle of the person who provided their supper that night. Where they live, how old they are and how long they’ve been fishing. Consumers are focusing more on where their food comes from, if it is sustainable and healthy and whether the people who catch it are paid fairly’.

No lobsters were available for comment.

It’s time to celebrate – the recession is over!

Official government figures confirm the UK economy grew faster than expected in 2013 and at the fastest rate since the 2007 financial crisis.

Economic growth for 2013 was 1.9% – a vast improvement over 0.3% seen in 2012. At this rate UK plc may be able to claw itself back up to the size it was before the crisis – just in time for the May 2015 general election. So is this all good news? Well maybe for London and the UK as a whole but maybe not so for small businesses and provincial towns.

Firstly, the Bank of England has kept it’s base interest rate down to 0.5% for the last 5 years but might not do so for much longer. Business loans and mortgage rates may become expensive which is bad news for small businesses and consumers.

Markets are a good indicator of a local economy what is still glaringly apparent is the contrast between London (‘Recession- what recession?’) and the economy in the rest of the country.

Secondly, the vast majority of economic growth has been in London and the South East. Given that Markets are a good indicator of a local economy what is still glaringly apparent is the contrast between London (‘Recession- what recession?’) and the economy in the rest of the country. Anyone staring at empty stalls and boarded-up shops along the High Street in Mudford-on-Sea is bound to consider throwing in the towel and heading for the bright lights. Some economists have even suggested the economy is now so ‘Metrocentric’ that anything outside the South East is almost ignored by a Parliament which sits in London.

OK – Birmingham, Manchester Liverpool and Leeds may show ‘green shoots of recovery’ but what about the medium to small towns outside the metropolitan areas? A recent report: ‘Cities Outlook 2014’ prepared by research organisation ‘Centre for Cities’ suggests London is sucking in provincial talent and ideas faster than ever. You can download a copy from www.centreforcities.org. As a result the London residential property market is rocketing and has become unaffordable for first-time buyers whilst perfectly good £70k terraced homes in the provinces stand empty. The decision by Bank of England Governor, Mark Carney to withdraw mortgage support for first-time buyers may stop the London housing market from overheating but does nothing for Mudford.

This is not good news for (A) Londoners faced with a sky-high cost of living and accommodation and (B) the rest of the country emptied of talent and investment. The report contains some startling figures about so-called internal immigration into London, let alone external immigration into London from the rest of the EU. The House of Commons Public Accounts Committee also pointed out the experience of Spain that HS2-type high speed rail accelerates the problem.

A lady stallholder in Mudford has suggested a solution. She proposes a return to ‘government by itineration’ i.e. Parliament travels the country and sits in the provinces for six months of the year, rather like the Monarch did in the Middle Ages. A couple of weeks in Mudford would be welcomed by her and other local businesses – even more so if the £80 billion HS2 budget was diverted to improving infrastructure within the town, not leading out of it.

Despite the vitality of London one of the saddest sights you’ll still see are the ‘skipdivers’ who appear at closing time, scavenging for unsold stock. Unfortunately it’s still a common sight so it was interesting to see the CPS do a U-turn on an intended prosecution last month.

North London squat-dwellers Paul May, Jason Chan and William James were arrested after rummaging through the bins at the back of an Iceland foodstore in Kentish Town, North London. The Crown Prosecution Service intended to prosecute them under the 1824 Vagrancy Act but the Iceland Chief Executive swiftly stepped-in and asked for the case to be dropped because ‘the Company had not sought a prosecution’.

This quick-thinking avoided awkward publicity about why so much food was being skipped and a potential PR train crash for Iceland. But it also left unanswered some interesting legal issues, e.g. are you ‘stealing’ something when it ‘s already been dumped as waste? A successful prosecution would have been bad news for Private Investigators who specialise in juicy scandals scavenged from household bin bags.

A staggering six million tonnes (£10 billion!) of food is still binned by consumers every year because it is ‘out of date’.

The case also highlighted how UK food retailers and consumers remain amazingly wasteful. Some foodstores do donate unsellable short shelf-life products to food banks and homeless charities but a staggering six million tonnes (£10 billion!) of food is still binned by consumers every year because it is ‘out of date’. Shoppers don’t understand the difference between the statutory ‘Use-by’ date and the retailers ‘Sell-by’ or ‘Best-until’ dates. Unsellable short-dated stock gets skipped by retailers so into the Iceland bins went £33-worth of mushrooms, tomatoes, cheese and Mr Kipling cakes, only to be snaffled by Paul, Jason and Bill.

Given that it was intended for landfill you can’t help sympathising with them, but it wasn’t terribly bright to scale a wall near a Police station at midnight and trespass on private property. That’s a bit different to skipdiving through the bins on Mudford Market.

Paul May said he was anything but ashamed at sharing discarded food with his housemates. ‘It’s more morally questionable they throw away usable food than how people recover it’ he said. ‘In some ways I’m proud of what we do.’ Recovering food from skips allows him and his ‘Freegan’ chums to eat more healthily than buying food on a low income and they regularly recover large quantities of frozen chicken breasts and the like. The previous week they’d even enjoyed a luxurious quail supper.

A spokesperson for the CPS said ‘We have paid particular regard to the seriousness of the alleged offence and the level of harm done. Both of these factors weigh against a prosecution. Additionally, further representations received today from Iceland Foods have affected our assessment of the public interest in prosecuting.’

Everyone looks forward to Christmas (e.g. Payment Card Processors) but maybe not the New Year (e.g. Market Stallholders). This year a fair few are dreading the first quarter of 2014, so maybe now’s the time to make an early resolution to see off the gloom of the ‘Kipper Season’.

Two possibilities are (a) take a tax-deductible buying-trip-cum-holiday somewhere warm and get an edge over your competition, or (b) improve your plastic payment margins. If cash is tight then option (b) might be the only choice.

Some of the charges to SME’s (‘Small and Medium-sized Enterprises’) are outrageously high – anything up to 10%.

According to a report by SagePay – the World’s third largest Payment Provider – the remorseless rise of a cashless society continues, like it or not. Payment Providers such as SagePay, WorldPay and PayPal are the middlemen who process in-store and online EFT debit and credit card transactions for a percentage charge on each. Banks and Credit card issuers like Amex do the same and the fee is variable dependent on the volume of your turnover and the value of the transactions. Some of the charges to SME’s (‘Small and Medium-sized Enterprises’) are outrageously high – anything up to 10% – so (according to SagePay) because Shoppers now carry only £20 cash some £33m of turnover walks away each day when they are told: ‘Sorry mate – I only take cash’.

Such SME’s are (also according to SagePay) short-sighted as once they take cards they see sales turnover increase by 30%. That more than justifies the transaction charges.

Providers may be offshore and dodge paying UK tax.

OK the increased turnover is true enough but that’s not the entire picture. HM Government is concerned that once the cash economy has disappeared altogether then retailers will continue to be overcharged if rates are not opened-up to competition. Oh yes, and the Providers may be offshore and dodge paying UK tax. As SME’s are often portrayed as ‘the engine house of the economy’ the Government is proposing a new FCA regulator to supervise retail payment systems – but don’t hold your breath waiting for it to appear and charges to fall.

In the meantime why not spend the Kipper Season fishing around for a good deal? Some rates are coming down as new Providers emerge and the Federation of Small Businesses – http://www.fsb.org.uk – offers very competitive rates to set up a new Merchant account and process your transactions. In return for a modest membership fee they also offer assistance with Vat, tax inspections and insurances tailored to small businesses. Alternatively try Cardswitcher – http://www.cardswitcher.co.uk – who claim to reduce the cost of card transactions for SME’s by up to 40% by comparing a range of providers. Their online service provides multiple quotes and shows how to switch between Providers. And finally, if you’re on a Open Market stall and reliant on a Mobile phone for card transactions rather than a hardwired data line go to http://www.chipandpinsolutions.co.uk to see if they can help. All their websites are worth a good long look and don’t forget to tell your bankers what you’re doing – and why – and ask them if they can assist. It helps the healthcheck rating they apply to your account.

Of course if you want to stay cash-only then so be it, but you might want to consider moving to Totnes in Devon where they have a thriving independent retail sector supported by their own currency.

The High Street is Totnes is doing rather well thanks to a strong core of independent retailers and few shop voids. This is largely due to the efforts of a grassroots community network, ‘Transition Town Totnes’ – http://www.transitiontowntotnes.org – founded in 2006 by Rob Hopkins and Ben Brangwyn. Their intention was to encourage economic and social resilience in the local economy in response to dwindling oil reserves and climate change. The timing was spot-on. ‘What we are modelling here is not just about the survival of the High Street, it is about strengthening the local economy in the widest sense’ they say. That included a vigorous campaign to see off a proposed Costa Coffee ‘…as we already have plenty of independent alternatives and we simply don’t need it’.

To strengthen the local economy they established a community energy company and community brewery and encourage local people to buy local produce with the ‘Totnes pound’.

The notes can be purchased locally, 1: 1 for sterling and accepted in local shops and to purchase local services. Because they are only accepted locally the ‘money’ stays within the local economy and supports local employment rather than being sent off to distant suppliers and shareholders in London. Add some changes to Shoppers parking tariffs and it seems to be working for their High Street. Mary Portas please note.

The Bank will print banknotes on plastic, not paper as they last longer and are more difficult to fake.

The Bank of England doesn’t view the Totnes Pound as a threat yet but is moving towards plastic in a different way. It now seems likely the Bank will print banknotes on plastic, not paper as they last longer and are more difficult to fake and don’t fall apart in the washing machine. Canada and Australia already use these funky, transparent and difficult-to-counterfeit designs. The Bank seems intent on avoiding the 1940-45 crisis when expert German forgers flooded Europe with fake £5 notes to undermine overseas confidence in sterling. A repeat would make it far more difficult to sell British goods to countries in the EU.

It’s good to see the Bank outwitting the Euro and the evil empire of Frankfurt.