Posts Tagged ‘Economy’

More on financial transparency – a response

July 22, 2009

The below is my response to Leigh at Knowing and Making discussing further the financial product transparency plans in the Conservatives’ ‘Plan for Sound Banking’ (See here for my summary)

I wanted to read the actual document before commenting further. Which I have now done. The way it is set out in the policy document is a lot clearer than the couple of lines in Peston’s post (on which I based by initial reaction).

The idea of getting providers to send out a ‘price list’ and a breakdown of their usage over the previous year makes a fair bit of sense. As a first point it will help customers appraise their own usage and think about whether the deal they are getting now is right for them (although people having sound financial awareness would be a necessity in this case).

Although I am not so sure about forcing them to provide machine-readable raw data for customers to put into a price-comparison site. What format are they going to use that customers (non-technical included) are going to know what to do with, let alone have all institutions agree to implement a common format in the first place? Having the data organised in a standard way, allowing customers to manually plug in the numbers on a website would be perfectly acceptable. But what is to stop a financial institution from coming up with a revolutionary new type of charge, what happens then?

I am a bit uneasy about it being a statutory requirement, from a free-market point of view, as I think there are sound business reasons for companies to be more open and up-front about such things. If they believe in the service they provide to customers they should have nothing to fear from easier comparison, I think they should be doing it voluntarily. Bet they would like to not have to pay any commission too, so open-source comparison sites could be welcomed.

Definitely agree with the idea of cutting out the rating agencies. But that is a slightly different case from arguing for the consumer side of things as it will be ‘expert’ commercial entities doing the analysis and comparisons; not lay people. Will be interesting to see how they implement it!


Wimbledon in the recession

July 9, 2009
Wimbledon - The Hordes
Image by ucayman via Flickr

Wimbledon doesn’t really show any signs of there being a recession on.

I thought we are supposed to be in a recession with everyone feeling the economic pinch and cutting back their expenditure? I went to the Wimbledon Championships twice in the last two weeks, and on that basis you would seriously question how bad this ‘recession’ is.

Firstly the numbers of people visiting… it was absolutely packed, it seemed much busier than in the last two years. On day two of the chamionships they had around 43,000 people come through the gates!  That is around £1.25m per day (based on the pricing for the first 2 days and court capacities) in admissions alone.

If we do a quick and very rough calculation of people buying things there:

  • Strawberries & cream (say 1/3 buy 1 @ £2.25) = £31,927.50
  • Water/Soft Drink (3/4 buy 1 @ £2) = £64,500
  • Pimms (1/4 buy 1 @ £6) = £64,500
  • Lunch (2/3 buy 1 @ £6) = £172,000
  • Gift/clothing from shop (1/2 spend £20) = £430000
  • Total = £762,927.50

Now that is a very rough estimate (and I think on the low side) of what people might be spending on their day out at Wimbledon.

Personally, as a tennis player and fan, I think Wimbledon is very good value for what you get:

  • Top professionals playing a few feet away (on outer courts anyway)
  • play going on from 12 until around 8 or 9pm
  • the atmosphere (a big thing for some, especially the afterwork city-types who come in after 5pm to sit out at the long bar drinking Pimms and people-watching)
  • etc. etc.

I started off this post planning to say that it is incredible that so many people have visited Wimbledon this year (in the heart of a recession) when it costs so much. But now I am not so sure, compared with other sporting events/entertainment it is actually quite good value. Football at Arsenal for example costs anywhere from £32-£92 for a 90-minute match…

It will be interesting to see how attendances at football stadia across the UK are affected over the first couple of months of the 2009/10 season. I predict falls (Except maybe for the very biggest clubs).

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WikiJob Poll: Is the recession over?

June 17, 2009

This is the latest post in the WikiJob Poll analysis series. This time I will be looking at WikiJob users’ views on whether or not the recession is over, and how that compares with other people’s views.

The latest poll asked “Is the recession over?” (with answer options of Yes or No) and as of writing this there have been a pretty credible 262 votes cast. With an overwhelming victory for those thinking the recession is not over yet; 216 votes compared with 46 votes for ‘Yes’ (see Chart 1).

WikiJob Poll: Is the recession over?

Chart 1 - WikiJob Poll: Is the recession over?

I had been keeping an eye on the poll’s progress and that ratio has been pretty consistent from the very beginning so it would appear that WikiJob users have not experienced much, if any, of the supposed “green shoots” appearing in the economy.

The CBI recently announced that it believed the UK economy was stabilising but that we wouldn’t begin to see a return to growth until early 2010. ( This was based on the second quarter GDP and inflation results along with the CBI’s own forecasts.

On the 17th the Office for National Statistics released the latest unemployment figures with a rise in May of those claiming job-seekers allowance of 39,000, less than what some economists had predicted.

Most WikiJob users would, I guess, base their impression of the recession on their experiences and probably from a jobs perspective (given WikiJob is about jobs!). I am sure there are many students who have just finished their exams, and who have been unable to get a position lined up earlier in the year, who are now really stepping up their efforts in finding a graduate role, but coming up with limited opportunities and massive competition. The stats aren’t great: with a fall of nearly 5% in the number of 18-24 year olds in employment.

The poll results probably also reflect the industry preferences of the WikiJob users (see Chart 2).

WikiJob Poll: What industry are you most interested in?

Chart 2 - WikiJob Poll: What industry are you most interested in?

With the users’ interest  heavily concentrated in the financial and professional services industries [Accounting, Consulting and Banking account for over 2/3 of respondents]. I see the banking and consulting sectors as being particularly hard hit (out of the options), slightly less so the large accounting firms. But still none of these compare to the pain being felt in the manufacturing sector in particular by the smaller specialist manufacturers which the UK seems to specialise in.

From what I have read many, better-informed people than me, believe that while the economy is showing signs of stabilising and some even believe there may be some positive signs. But current students and recent graduates don’t seem to be experiencing these, and are currently pretty pessimistic. An interesting employer perspective I received in talking with graduate recruiters druing my job search was that those companies who completely cut their graduate recruitment following the dot-com crash found that in the last couple of years there is a dearth of people coming up through the ranks to occupy the vital junior/middle management roles, which was why they hadn’t cut their graduate recruitment this time round.

I will close with a couple of quotes:

Alan Clarke, UK economist at BNP Paribas, said: “We are certainly moving in the right direction and this is one of a number of very encouraging signals that we have seen.”

and finally Stephen Boyle, Head of RBS Group Economics, said in his UK Monthly Economic Update “Signs of stabilisation are one thing, a sustained recovery is an entirely different matter as demand conditions remain weak. The sustained upward movement in long-term interest rates in recent months threatens to pour weed killer on any green shoots…”

Good luck in your job hunting, many jobs are still out there, at least you are giving yourself an advantage with the fantastic resources available on Wikijob and its forums.

WikiJob Stats Man (read more of my thoughts at

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The ‘Wimbledonisation’ of Britain

February 2, 2009

Robert Peston, the BBC’s Business Editor, has written a thoughtful piece on his blog about Britain’s economy and the wildcat strikes currently taking place.

As [Sir John] Rose [CEO, Rolls-Royce] said, it is human nature for a business with operations all over the world to favour its home country when making decisions about where to expand – or, as in the current horrible economic climate, where to cut.

So it should be no surprise that an Italian company IREM, hired by Total of France on a construction project in Lincolnshire, should itself be employing Italian workers. In a way it would have been more surprising, at a time when money is tight all over the world, if IREM had shunned its own people and had hired new British workers.

In the current economic climate I believe that governments should be extremely careful about their policies, it will be a very sad day when governments from the world’s leading countries start enacting protectionist policies into law. It is a retrograde step, and one which will impact on every economy, especially those in developing countries.

America, despite their constant talk of free trade, has always had protectionist policies (see Protectionism), as do many countries in Europe. One exception seems to be the UK, which is probably the most open to free movement of investment and jobs. Protectionism within a struggling global economy is a sure fire way to speed the process up and end up with a deeper and longer-lasting recession as Peston argues.

History does indeed tell us that protectionism in a worldwide downturn is the shortest route to slump and depression.

So, is the UK’s economy better off for being open and free and allowing foreign companies to buy up its major businesses? I would argue that on the whole it has been better off, in the good times at least, but personally I would prefer the country to have greater control over infrastructure businesses (energy, water, transport etc.) this is because if there is a truly global and major crisis it would be reassuring to know that the businesses running our infrastructure will have the UK’s interests at heart. On the jobs front, should businesses operating in the UK be forced to employ only or mostly British workers? Of course not, if a business believes that it can employ workers from outside the UK to do a better job and cheaper then I see nothing wrong with that, if anything complain about the government’s immigration policies the businesses are only maximising their shareholder value.

But Wimbledonisation – the notion that Britain is the winner even if none of the economic players are actually British – became official dogma.

We can carry on with a Wimbledonised economy, but I would like to see British companies improving their competitiveness on the world stage and expanding into other markets, only then will the free market economy which the UK operates be completely beneficial to the UK populace.