Half of UK workers have taken actions that help companies survive the recession, according to research commissioned by R3, the insolvency trade body. By accepting pay freezes, working longer hours or making other changes to their work patterns, they are helping companies stay afloat and preserving jobs.
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The Bank of England has cut rates to 1.5%, making it the first time rates have fallen below 2% in the bank’s 314 year history. The half percentage point reduction brings interest rates below 2% for the first time since the Bank of England was founded in 1694.
The Bank England will today announce if Interest Rates are to go up, down or stay the same.
With rates currently at 2%, the Bank’s Monetary Policy Committee is tipped to announce a reduction of between 0.5 and one percentage point.
Enable Finance Ltd. – Christmas Opening Times 2008
First of all, we at Enable Finance would like to wish you all a very Merry Christmas and a Happy New Year.
Opening Hours:
Enable Finance recognise that working capital is essential to a business and that’s why over the coming weeks our Corporate Finance teams will be publishing news and information on the different types of finance available to fund working capital.
The Bank of England has cut interest rates by one percentage point, from 3% to 2% – the lowest level since 1951.
The last cut, an emergency 1.5%, was intended to stimulate spending and stave off recession but the economy has continued to suffer.
The Bank of England is expected to cut interest rates later to their lowest for more than half a century. Economists and business leaders have called for a one percentage point cut to 2% – a level not seen since 1951 – to prevent the downturn deepening.
The Association of Short Term Lenders is warning consumers not to be duped by certain bridging lenders that are demanding high non-refundable application fees and then dropping out of the deal.
Adrian Bloomfield, CEO of the ASTL, says: “It has been brought to our attention that there is an improper and dishonourable practice whereby firms appear to be charging applicants very substantial application fees in relation to short term loans that do not materialise.”
More on Bridging Loan Finance – make sure you work with the right broker
Following the acquisition by the Bibby Financial Services Group of Arbuthnot Commercial Finance, the two offices will be coming together as one team at new premises based in Hastings.
Arbuthnot Commercial Finance was an independent factoring company based in St Leonards-on-sea, East Sussex.The acquisition, which was completed on 31 July, brought a wealth of experience and around 100 clients into the Bibby Financial Services Group.
Alistair Darling has announced a package of economic measures including offering credit to small businesses struggling with cash flow problems via a temporary finance scheme offering loans between £1,000 and £1m.
More on Chancellor Addresses Cash Flow Problems For Small Business
Latest CML data has revealed that gross mortgage lending totalled an estimated £18.7 billion in October, almost 7% higher than September’s £17.5 billion figure.
The monthly total was 44% lower than gross mortgage lending of £33.4 billion in October 2007.
Almost 3,200 companies were shut down by compulsory winding up orders in the third quarter of the year, according to the latest figures from the Ministry of Justice.
In total, 3,184 winding up petitions were issued by the high court and in county courts across England and Wales.
It is further evidence that trading conditions are continuing to deteriorate across the UK, with figures up 9% on the same period the previous quarter. Payment petitions from creditors, meanwhile, were marginally under 5,500, an increase of 2% on the second quarter of 2008 and a 10% rise on the third quarter the previous year.
Experts believe the figures are likely to continue upwards in the final quarter of the year, adding that households are struggling to stay afloat financially as the cost of borrowing and unemployment are continuing to rise in the economic downturn.
In the last quarter, Britain’s economy contracted by 0.5% and the Eurozone entered recession on 14 November. These latest figures follow the official figures from the Office of National Statistics earlier in the month, which found that 17,341 people were declared bankrupt in the third quarter of 2008 almost 10% higher than a year earlier.
R3, representing the Insolvency Profession, is concerned by figures released on Friday by the Insolvency Service on corporate insolvencies which show a 53% increase in Receiverships. This is a jump from 177 Receiverships in the second quarter to 270 in the third quarter, an indication that repossession of commercial property is on the increase.
“Companies buying or selling property are being squeezed by a reduction in prices and a shortage of buyers,” said R3′s President, Nick O’Reilly. “A bank trying to recover lost assets will appoint a surveyor which shows up as a Receivership. We have all known for some time that the property and construction sector has been badly hit by the downturn, and these figures are evidence of that.”
Today’s figures indicate that overall, the number of corporate insolvencies for just three quarters of 2008 now stands at 15,164 which is almost as much as the figure cited by R3 for the entire year. In October, R3 members predicted a rise from the official figure of 13,091 corporate insolvencies for 2007 to 15,693 for 2008.
Rises are expected to continue into 2009 with 18,440 company insolvencies predicted. This would translate as a massive 41% increase in business insolvencies from 2007 to 2009. These predictions were made in a survey of the Insolvency Profession last month in conjunction with the polling agency ComRes.
“The Insolvency Service figures are worse than we expected. However, there will always be a ‘lag’ in filtering through and it won’t be until the end of 2009 that we will start to approach the numbers we saw at the peak of the last recession in 1992.
“For the last three or four years a number of businesses that perhaps were not performing well have been kept alive artificially by the easy availability of credit, which has now dried up. Businesses which are more vulnerable will fail.”
There are also concerns about the reported figures of 27,087 personal insolvencies for this quarter, which marks a jump in the number of bankruptcies and IVAs. “Again, these figures show that Insolvency Practitioner’s predictions of a 22% rise in personal insolvencies between 2007 and 2009 is worryingly on track,” said Nick O’Reilly. “Traditionally the route into personal insolvency is not an overnight process and unsurprisingly people will put off dealing with financial problems until they have exhausted all other options.”
The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move to ease leading as the country heads into recession.Following today’s decision, the BoE said there had been a very marked deterioration in the outlook for economic activity at home and abroad in the last two months so the cut was warranted.
Peter Ewen the Managing Director Venture Finance PLC has today confirmed the Companies status.
In this ever changing financial climate and in light of recent events, I thought it would be useful to update you on our status and confirm the very strong position we find ourselves in.
More on Venture Finance the Factoring Company confirms its status
Over the past few months, small to medium sized businesses have been at the sharp end of the credit crunch with loans and overdrafts being pulled or restricted by their banks. This reduction in available finance has had huge implications for business cash flow and has forced some businesses to fall into arrears with HMRC, either on VAT or PAYE or even both.
Despite the huge Financial Bail Out the global banks have received the FTSE 100 has continued to plunge in opening trading, falling 5.3% to 3,862. The FTSE closed 7% down yesterday to 4,079 and comes on the back on the back of big falls in markets across the globe. The Dow Jones closed almost 8% down at 8,577 and Japan’s Nikkei 225 index fell a whopping 11%, the biggest one day loss since the late 80s.
More on Business Finance squeezed and Cash Flow threatened as FTSE plunges
The Council of Mortgage Lenders and Citizens Advice support the Office of Fair Trading’s new recommendation today that sale and rent back transactions should be regulated by the Financial Services Authority. The conclusion is the outcome of an OFT market study prompted by the concerns of the CML, Citizens Advice and Shelter, among others.
More on Calls for Sale & Leaseback or Rent Backs to be regulated by the FSA
I’m sure you will all agree this lat year has been the most traumatic for our global money markets, culminating in the last month with all major developed governments bailing out the financial markets in the hope of averting a global depression; not just a recession a deep depression.
More on Making Sence of this Economic Uncertainty with BBC’s Robert Peston
The Specialist Mortgage lender Edeus has today gone into administration.
KPMG has been appointed to supervise the administration of edeus mortgage creators and edeus creators. The business which has its headquarters in Wolverhampton employs 26 people. All customers who are currently on the edeus mortgage book will be unaffected by this announcement and their loans will continue to be serviced as normal.
The Bank of England has cut interest Rates by 0.50% to 4.50%. The decision has been made a day before the BoE’s Monetary Policy Committee normally makes its decision over the interest rate.
The UK government has announced details of a rescue package for the banking system worth up to £50bn ($88bn) can this rescue package avert deeper recession and the prospect of rising business insolvecy & Liquidation.
More on Business Insolvency: Can the Bank Bail out reduce the risk
The UK is already in a worsening recession, and the Government and Treasury must act to prevent further deterioration, according to the British Chamber of Commerce.
In its quarterly economic survey, based on 5000 responses from businesses of all sizes and sectors, the body warned the third quarter’s results were “exceptionally bad”, with almost all of the national balances worsening, with many now in negative territory. Technically the UK is not yet in recession – defined as two consecutive quarters of negative economic growth. But the BCC described the survey results as “exceptionally bad” and said the economy was under “immense pressure” for the second quarter in a row. It also said the jobless total was expected to increase within two years.
More on Is the UK in Recession? Businesses struggle with cash flow and confidence
As the credit crunch begins to spread wider and bite into the wider business economy Enable Finance is proud to announce a new Business Debt Consolidation service for small to medium sized businesses concerned about their business debts.
It is normally difficult for a business to admit financial difficulties, but in the midst of the global credit crunch even healthy firms are finding the economic problems passing on to them.
As Banks carry on to tighten their lending criteria business overdrafts often the first in the firing line; gone have the days of readily available overdrafts or the flexibility to extend your facility easily.
More on Sale and Leaseback or Asset Refinance Can offer Cash Flow Life Line
It has been confirmed that Bibby Leasing Ltd has withdrawn from the commercial asset finance sector deciding to concentrate solely on its small ticket sales aid division.
Bibby Asset Finance had previously offered, leasing, hire purchase, sale and lease back and the ability for clients to refinance assets held within the business.
More on Bibby Leasing & Asset Finance Withdraws From the Market
In a move that has already sent shock waves around the world US investment giant Lehman Brothers has today filed for bankruptcy. The firm revealed this morning that it intends to file a petition under Chapter 11 of the US Bankruptcy Code.
InterBay Commercial has been bought by the 5D Group. It will be merged with commercial mortgage lender 5D and re-launched under the InterBay Commercial name.
Colin Bell, CEO of InterBay Commercial, said: “It is with great delight that I am able to announce an exciting new chapter for InterBay Commercial in the UK. Since our launch in 2006 we have experienced an amazing growth trajectory. We have created a great team, a strong brand and originated a portfolio of loans which are outperforming the market. It is testament to these achievements that we have been able to attract a new UK parent and provide a secure future.
One in five UK accountants claim that their clients have been refused credit or had funding restrictions imposed in the light of the credit crunch. The findings come from a survey conducted by an invoice and asset based lender.
Mortgage borrowers coming to the end of two and three year fixed rate mortgage deals have been increasingly staying on their lender’s standard variable rate because the new fixed and tracker rate options were proving too expensive.
New Comment System on our Finance Blog enablefinance.com
We know that communication is key and we have had a massive volume of comments on some of our posts, but unfortunately we have also had a lot of spam so its been difficult to see the wood for the trees. Our new comment system from Intensedebate.com should resolve a lot of these problems.
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