Newsflash: Are interest rates set to rise?

graphs and charts

Just over a week ago, we wrote about how the pound has fallen since the Brexit vote: Pound down, inflation up

How fast things change!

In the last few days, the pound has started to bounce back up against the dollar, as you can see from this chart:

GBP v USD
Source: BBC News Market Data

That’s not the only shift that’s going on.

The Bank of England’s Monetary Policy Committee (MPC) meets monthly to decide what to do about UK interest rates.

Rates have been on hold at a record low of 0.25% since August 2016. The only one of the eight MPC members who votes for a rise is typically MIT professor, Kristin Forbe (and she’s leaving the committee this month). Yesterday, she was surprisingly joined by Ian McCafferty and Michael Saunders. The last time three people called for rates to increase was May 2011.

This signals that policymakers are increasingly concerned about inflation rising even though the economy slowed to 0.2% in the first quarter.

The Bank had expected inflation to peak around 2.8% in the second half of this year, but now thinks there is a risk it will reach 3.0% by autumn.

The MPC said a further fall in the value of the pound would add to upward pressures on inflation, and that inflation had picked up more quickly than expected since last month’s economic forecast.

The committee stressed that all members agreed any increases in the interest rate would be ‘gradual and limited’.

Money managers now believe there is a 50% chance of a rate increase by May 2018, up from 12% before yesterday’s meeting.

Interest rates

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What the hung parliament means for business

Houses of Parliament

The political arena has sprung a series of significant surprises on us in recent months, including the vote for Brexit, David Cameron’s speedy resignation and replacement by Theresa May as PM, and Donald Trump being elected in America.

And now – at a time when the Conservatives seemed unbeatable – Mrs May held a snap General Election with the intention of boosting the Tory majority, and instead has ended up with a minority and coalition talks with the DUP.

The bad news is that a hung Parliament leads to uncertainty for all.

Impact of a hung Parliament

Because of the hung Parliament, the Brexit negotiations that were due to start on 19 June have now been delayed. The Queen’s Speech has also been delayed. And the value of pound is still volatile (this links to last week’s article, Pound down, inflation up).

At the time of writing, Mrs May has reshuffled her cabinet and said she has no intention of resigning. But there is speculation that she will be forced to step down and/or we’ll be voting in another General Election within a year.

All this upheaval and uncertainty seems to weaken the British position in the eyes of the rest of the world. It’s hard for other countries to see us as ‘strong and stable’ as we’d like to be.

Various organisations have been ‘taking the temperature’ of the business world, to see how UK industry leaders are responding to the uncertainty. Below, we examine some of the results.

What the surveys say

The Institute of Directors surveyed 700 members and found a ‘dramatic drop’ in confidence following the hung Parliament, and huge concern over political uncertainty and its impact on the UK economy.

As a priority, the respondents wanted the UK to reach agreement with the EU on transitional arrangements for Brexit, and to clarify the impact on EU workers in the UK.

Stephen Martin, Director General of the IoD, said: “It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy.”

The Harvard Kennedy School of Business surveyed more than 50 medium-sized businesses and trade association. Their key concerns were:

  • The overwhelming importance of securing a good trade deal with the EU
  • The concern that Brexit would lead to an increased regulatory burden not a reduction
  • The need for continued engagement with EU regulatory agencies
  • The fact that Brexit will necessarily trigger a fundamental rethink of policy towards some sectors, in particular agriculture
  • The need to upgrade customs control procedures and revamp the immigration system

‘Almost all’ expressed a preference for remaining in the single market and customs union. All the companies questioned were concerned about potentially rising costs from tariffs and customs controls while many were worried about the UK leaving the EU without a deal at all.

Peter Sands, former boss of investment bank Standard Chartered, told the BBC: “When it comes down to it, most would prefer to be in the single market – that makes it easier for them to do business, and if they can’t get that they want a free trade agreement or something as close to the single market as possible.”

We know it’s possible. For example, Israel has a special relationship with the EU since 2000 as an ‘associated state’. With its high level of scientific and research capability, Israel has a long-standing history of scientific and technical co-operation with the EU. With this type of status, the UK’s strong scientific community could continue to deliver EU access to British innovation.

The Resolution Foundation surveyed over 500 employers who employ EU/EEA nationals, and identified a huge gap between the kind of immigration system employers expect and what the new government is planning.

Nearly a third (30%) expect freedom of movement to be maintained for EU/EEA nationals moving to the UK with a job offer, while 17% expect no change to the current system.

The PM has ruled out either option, stating that her government – rather than employer demand for workers – will control migrant numbers. However, this may change now that a softer Brexit is being proposed post-election.

The Foundation warned that lower migration, along with a higher minimum wage and a tightening jobs market, could mean the end of cheap labour for many UK firms.

Changing face of Parliament

There’s still some way to go, but the good news is that Parliament is more diverse than ever. The BBC breakdown shows (out of a total of 650 newly elected MPs):

  • 208 women, compared with 191 in 2015
  • 52 people from ethnic minorities, an increase from 41 in 2015
  • 45 who openly define themselves as lesbian, gay, bisexual or transgender (LGBT), a 40% increase since 2015
  • An increase in the number of MPs with disabilities (no official figures)
  • 51% went to comprehensive schools, 29% went to private school, 18% selective states

There will be more on diversity in a future article.

What can SMEs do?

The way things are going, there’s no way of predicting how the situation will play out over the long-term. In fact, it’s currently changing on a daily basis. In the short-term, SMEs will no doubt attempt to carry on business as usual. Here are some tips:

  • Companies large and small are pondering their investment decisions. Use AkoniHub to find the bank with the best interest rate. That way, your business deposits will grow faster, while the politicians sort themselves out
  • Focus on building your pipeline and business confidence. In the here and now, many firms across the UK have been doing well
  • Understand the key threats and opportunities that lie ahead
  • The future of devolution is an important consideration in business planning. So review the impact of further volatility in sterling as firms weigh up their business models and plans to invest or recruit.

For the vast majority of companies in the business communities we visit, Brexit feels far away and far off — what matters are the high upfront cost of doing business, poor broadband, the inability to recruit successfully for vacancies or transport gridlock. Different regions may also have their own view. In many parts of England, upcoming elections for new city/regional mayors whose powers matter to local business success could overshadow anything that happens in the national polls.

In the British tradition, let’s all try to keep calm and carry on. The UK must be seen to remain open for business, with a government committed to supporting enterprise. This means a clear timetable and ongoing pressure via industry bodies and associations for value add.

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How Brexit will impact SMEs

Theresa May triggered Article 50 on 29 March, starting the two-year process of the UK’s withdrawal from the European Union.

We’ve entered into an age of uncertainty – but SMEs can’t put growth plans on hold and adopt a ‘wait and see’ approach. Business continues as usual. Stock markets and inflation are holding steady, and Treasury predictions for growth remain the same as before the referendum.

Threats

SmallBusiness.co.uk says: “Small businesses are the lifeblood of the UK economy. Falling GDP will have a large impact on small businesses in terms of the overall activity of businesses and consumers buying their products or services…Small businesses are also more susceptible to shocks since they generally have a lower field of operation.”

  • Buying goods and services from other countries is now more costly. A weak pound is bad for the UK since we buy more from overseas than we sell
  • If prices rise faster than wages, consumers will start to spend less
  • Tariff-free trade with EU countries accounts for 44% of UK exports, so the cost of doing business with these clients has increased

The right of EU nationals to live and work in the UK is unclear, which may drive recruitment of UK workers and increased labour costs.

The Adviser Lounge warns: “If the cost of hiring skilled labour increases, the financial cost of Brexit to small business could prove too much to bear.”

Opportunities

Brexit undoubtedly brings threats, but it also presents opportunities.

Felicia Meyerowtiz-Singh, CEO and co-founder of Akoni says: ” Brexit and uncertainty also provide opportunities for revenue and business growth for UK business.”

  • Exporters are already benefiting from the fall in the value of the pound against the dollar and euro
  • The UK tourism industry should benefit, with an increase in staycations and visitors from overseas
  • Some employers anticipate potential relaxation of EU employment laws

So what can you do?

The world is changing faster than ever, with a combination of the digital revolution and economic uncertainty.

Here are some tips  from the Akoni team.

  • It’s easier for small organisations to remain flexible and adaptable. Demonstrate agile leadership and become comfortable with uncertainty and change. Don’t worry about what you can’t control, but plan for relevant risks that you can mitigate.
  • Streamline your systems and processes, such as the internal flow of information.
  • Identify the skill sets and attitudes you need, and train your people accordingly.
  • Maintain focus on customer satisfaction, monitoring social sentiment and improving your value proposition and customer journey.
  • Make use of new technology such as the cloud. Monitor data for trends and use it as a guide to threats and opportunities. Turn data into visuals that can be easily analysed and transformed into  good decisions and useful outcomes.
  • With a grasp of core financials, the CFO plays a key role of oversight, guiding the business in the right direction both short-term and long-term.

And finally, here are some ideas from other sources:

HSBC suggests: “We will need to improve in an area in which we have consistently under-performed: supplying the world’s fastest-growing economies in Asia and Latin America.”

SmallBusiness.co.uk says: “Small business should be looking to do everything they can now to protect themselves from future shocks… Diversifying out of, or into different markets might make sense…and now is the time to open dialogue with suppliers about pricing.”

Real Business advises: “By developing employees, you’ll have a more confident, motivated and proactive workforce who feel more positive about the future, and who are better placed to handle whatever comes along…Review your operation and pinpoint there there may be the opportunity to work with other similar-sized businesses who are experts in their field…Be as transparent as possible and involve staff in updates about the business where appropriate. This will foster strength and build trust amongst the team, which will be invaluable if the business hits any bumps further down the road.”

Change is here to stay. Whatever happens, Akoni will be here to help and advise.

Akoni helps businesses make the most of their cash. Register for free at AkoniHub.com

The last-ever Spring Budget: The business impact

On 8 March, Chancellor Philip Hammond delivered his final spring budget. From 2017, the budget will be moving to the autumn, with a spring statement instead. The intention is to allow more time for changes to be made before the next tax year.

Key points

Here are some of the key points that were announced:

  • Growth in the UK economy picked up through 2016, and the Office for Budget Responsibility (OBR) forecasts that the UK economy will grow by 2% in 2017, at a slightly slower rate in 2018, and then up to 2% in 2021
  • Britain’s debt stands at nearly £1.7 trillion – around £62,000 for every household in the country. In 2009-10 the UK borrowed £1 in every £5 spent. This year it is set to be £1 in every £15. Borrowing is forecast to reduce by nearly three quarters by 2016-17.
  • Employment has reached a record high of 31.8 million people

How the Budget affects SMEs

Here are some of the ways that SMEs and start-ups will be affected by the recent announcements:

  • There is a cut in dividend allowance for company shareholders
  • If you are an unincorporated business with an annual turnover below the VAT registration threshold, Making Tax Digital will become mandatory in April 2019 – after that, you will have to use digital software to keep your tax records and update HMRC every quarter
  • Self-employed people will have to pay increased National Insurance Contributions to bring them closer into line with employed people. From 2018, Class 2 NICs will be abolished. Class 4 NICs will rise to 10% in April 2018 and to 11% in April 2019.
    Update 15 March: The government has announced a U-turn on self-employed VAT, as explained in this BBC report.
  • Small businesses with minimal expenses (less than £2,000 a year) will now have to pay 16.5% under the Flat Rate VAT scheme

Rising business rates

We’ve written about rising business rates before, but here are some of the ways the Chancellor is sweetening the pill:

  • Business rates are increasing for certain sectors, especially the digital economy – but no small business that is coming out of small business rates relief will pay more than £600 more in business rates this year compared with 2016-17
  • Local authorities have been granted £300 million of discretionary relief they can use to help businesses most affected by the revaluation
  • From April 2017, pubs with a rateable value up to £100,000 will be able to claim a discount for of £1,000 on their business rates for one year

Consumer protection

Your business may be fined if you mislead or mistreat consumers. For example, if you charge consumers unexpectedly when a subscription is renewed or a free trial ends, or if your terms and conditions are too long, complicated or jargon-filled.

Investment in innovation

The Chancellor confirmed the government’s support of innovation, highlighting the Research and Development (R&D) tax credit scheme. They aim to improve awareness of the scheme among SMEs, and make administrative changes to increase the certainty and simplicity around claims.

£500 million is to be invested in technical education for 16 to 19-year-olds, with new T-levels being introduced from autumn 2019 covering 15 different subjects including construction, digital and agriculture. Students doing high-level technical courses at National Colleges and Institutes of Technology will be able to access maintenance loans from the government.

£270 million has been allocated to the Industrial Strategy Challenge Fund, to support research and innovation in:

  • Artificial intelligence and robotics that will work in extreme environments
  • Better batteries for electric vehicles that will help improve our air quality
  • Medicine manufacturing technologies to speed up patient access to drugs

£210 million will create new fellowships and programmes to attract top global talent to conduct research in areas such as bioscience and biotechnology, quantum technologies, and satellite and space technology.

£200 million is going towards local projects to build fast and reliable full-fibre broadband networks.

£90 million will provide 1,000 new PhD places, including in science, technology, engineering and maths.

£16 million is being invested into a national 5G Innovation Network to trial new 5G technology.

EIS tax relief

It has previously been indicated that the government will be reviewing existing tax reliefs aimed at encouraging investment and entrepreneurship (such as the EIS) to ensure that they are “effective, well targeted, and provide value for money”, however, Philip Hammond didn’t mention any change to Enterprise Investment Schemes at this stage.

We can only wait and see…

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How Wednesday’s budget could affect SMEs

The final Spring Budget is on 8 March. From next year the Budget is moving to Autumn, with a Spring Statement. This change gives time for tax changes to be made in advance of the tax year, and provides businesses with more time to plan, if necessary.

Forecasts are showing sharp growth with borrowing lower than anticipated, and a £45 billion tax windfall for the Treasury in the next five years. January’s tax receipts are at the highest level since 1999, but Chancellor Philip Hammond is quoted as saying: “There is no pot of money under my desk.”

In this article, we’ve compiled some of the main predictions that will impact you and your business, and look forward to hearing what is announced on Wednesday.

Business rates

According to reports, some firms face increases of up to 400% in the April business rates hike.

The Chancellor has recently indicated that he is “alive” to the impact this have on some High Street shops, and “open” about finding ways to help.

Business rates are a property tax that doesn’t apply in the digital economy, and the Government is trying to ensure that online retailers such as Amazon don’t benefit to the detriment of traditional High Street retailers.

We expect he will announce some immediate measures that will mitigate the worst effects on SMEs (such as transitional relief), with more fundamental reforms to come in the future. No additional help is expected for supermarkets and corporations.

Misleading contracts

Companies that mislead or rip off consumers are to be targeted, because Ministers want to force firms to use plain English and make key terms more obvious. If not, they face a fine.

The Citizens’ Advice service estimates that 2 million consumers per year have problems cancelling subscriptions, and research shows that 42% of people are paying for at least one subscription they don’t use, such as gym membership.

Consumer watchdog Which? found that 90% of people ticked to agree with online T&Cs in the past year but only 16% always read them. For one thing, T&Cs are often very long, for example, contracts for mobile phones can run up to 40,000 words. They also contain acronyms and legal or financial jargon that mean people don’t fully understand what they are signing.

Plans will be therefore be unveiled to fine companies that tie people into long contracts or unexpected fees in their terms and conditions.

There may also be a crackdown on rolling subscriptions that renew automatically after a free trial, with new rules to ensure consumers are offered the chance to cancel the agreement.

Science and innovation boost

The Chancellor is expected to announce a £500 million boost from the National Productivity Investment Fund, to support science and technology.

Around £270 million will be made available for pioneering projects such as:

  • Technology that operates in extreme and hazardous environments
  • Cutting-edge artificial intelligence
  • Robots for off-shore and nuclear energy, space and mining
  • Batteries for the next generation of electric cars
  • Accelerating patient access to new drugs, by developing speedy new ways to manufacture medicine

£200 million will go towards new fellowships for researchers in areas aligned to the government’s industrial strategy.

A further £90 million will fund 1,000 PhD research projects in STEM subjects (Science, Technology, Engineering and Mathematics), with extra cash for investment in 5G communications.

Brexit

British businesses are calling for economic stability during the Brexit negotiations. The Confederation of British Industry says that uncertainty dampens investment and higher inflation erodes the growth in consumer spending.

Carolyn Fairbairn, Director-General of the CBI, said: “By supporting businesses to invest, the government can promote growth at a critical time.”

Rain Newton-Smith, CBI chief economist, said: “Prioritising stability will inject further confidence in the economy now, and help boost the country’s productivity and prosperity for the future.”

Anything is possible after Article 50 is triggered at the end of March. Bigger measures are likely to be reserved until the Autumn Budget, so the Chancellor can see how the economy reacts. Meanwhile, we know he is aiming to keep a pot of money as a safety net, to ensure the country negotiates Brexit with stability.

As always, Akoni will keep you posted.

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Business Rates And The Impact On Companies

The increase in business rates that takes effect in April this year will see a steep rise for Small and Medium Businesses in the UK. This is already likely to present a serious problem for enterprises, and it appears the government may be forced to rethink. The negative impact on potential business growth is not welcome, particularly in light of companies dealing with various other uncertainties, which impact consumer spending, as well as considerations for future development and growth plans. SME’s account for 99% of all private sector businesses and are crucial for economic growth in the UK. Many of these may be impacted to the point of threatening their ongoing livelihood.

It is true that some businesses will experience small falls in business rates, among them giants such as Amazon and ASOS. About a third, however, will see sharp increases, some of them even expecting an immediate rise of 40%.

“The Federation of Small Business is warning that half of those facing hikes, will reduce, postpone or cancel investment, with nearly a fifth considering closing down or selling up.”

Based on the current economic climate, and with multiple uncertainties including Brexit, our team at Akoni are hopeful that the government will complete a full review prior to implementing any further policies that could negatively impact businesses.

Article from BBC News @BBCNews

Written on 27 February 2017

http://www.bbc.co.uk/news/business-39098801

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Heard about Small Business Saturday?

Small Business Saturday has been taking place on the first Saturday in December since 2013. The campaign provides free training workshops, celebrates small business successes, and encourages consumers to support small businesses in their community by ‘shopping local’. Although it focuses on one day, the aim is to change mindsets so people choose small businesses all year round.

This year’s figures are not yet announced, but on Small Business Saturday in 2015, customers spent £623m with small businesses – an increase of 24% on the previous year. #SmallBizSatUK trended at number one all day, with over 100,000 tweets sent, reaching over 25 million people. And over 75% of local council supported the campaign, for example, by providing free parking.

100 small businesses were highlighted in the 100 days running up to this year’s event on 3 December. They attended receptions at Downing Street and The Treasury Drum with the Chancellor of the Exchequer, and benefited from exposure on social media and in the local press.

One of the featured businesses in 2016 was Haven’t Stopped Dancing Yet! – a pop-up disco for people who love soul, funk and disco music from the 70s and 80s. Founded in 2010, they have performed in South East London and Birmingham, with vinyl DJs, dance line-ups, retro sweets and fancy dress prizes. Ad agency, JWT, called them a “trailblazer” for targeting the under-served 50-something market.

Spice Kitchen in Walsall is a mother-and-son team producing home-ground spices and spice mixes sold online via Etsy and Not On The High Street. They were also finalists in the Guardian Small Business Showcase competition, won a Great Taste Award in 2015 for their garam masala, and received the BBC Producers’ Bursary Award 2015 for up-and-coming food producers. The owners say customers love the products, and the fact that they are a family-run business.

Marvel Plumbing was one of the first businesses to be highlighted in 2016, and organised a fun event on Small Business Saturday to bring other businesses together and expose them to the local community. The company has grown from one man-and-van in 2012 to eight vans and four full-time office staff. They have also been asked to write and deliver part of the gas course for Southgate and Barnet College, so training future gas engineers to meet their high standards.

Small Business Saturday is a non-commercial initiative headed by Director Michelle Ovens MBE. It covers all types of small business, and is free to join. The campaign is supported by high-profile sponsors including American Express, Federation of Small Business, and Vistaprint.

This year, they have even launched a free cookbook containing recipes inspired by small businesses.

Find out more at smallbusinesssaturdayuk.com

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What the Autumn statement means for your business

Autumn

Chancellor, Philip Hammond, has delivered his first Autumn statement. Most announcements came as no surprise, with core messages about continuity of financial stability and control of public spending.

The statement was considered and concise, which is encouraging at a time of uncertainty. However, business groups interviewed by the Guardian didn’t consider the statement bold enough, and were disappointed that it didn’t tackle business rates or provide support following the Brexit vote.

Here are some of the headlines:

Impact on business

To reinforce Britain’s competitiveness while negotiating Brexit, Hammond confirmed he will stick to the business tax roadmap that was announced in March, with Corporation tax reducing to 17% and a reduction to business rates worth £6.7bn.

Funding

In an effort to boost the long-term economy and reduce the ‘productivity gap’, £23bn is going into a new National Productivity Investment Fund, including:

  • £7.2bn to tackle congestion and transport
  • £7.bn to support house-building (including £3bn Home Builders Fund to unlock finance for over 200,000 homes)
  • £4.7bn towards science and innovation
  • £2bn to accelerate construction on public sector land
  • £1.1bn for local infrastructure
  • Over £1bn for digital infrastructure (to encourage the private sector to roll out more full-fibre broadband and support trials of 5G mobile telecoms. What’s more, full-fibre infrastructure will benefit from 100% business rates relief for five years from April 2017.)
  • £27m development funding for the Cambridge-Oxford growth corridor (as recommended by the National Infrastructure Commission)

To make Britain the ‘go to’ place for science and innovation, these sectors will also benefit from an extra £2bn of funding per year for business research and development.

£400m is being invested into Venture Capital Funds from the British Business Bank, to:

  • Unlock up to £1bn of investment in innovative firms planning to scale up
  • Review to identify barriers to access to long-term finance for growing firms
  • Funding from the Department for International Trade for FinTech specialists

Benefits in kind reformed

Tax will become payable by employees who sacrifice salary to receive ‘benefits in kind’, except:

  • Cycle to work scheme
  • Ultra-low emission cars
  • Pension savings
  • Childcare

HMRC expects to gain approximately £2m through this measure.

Economic forecasts downgraded

As a result of the EU Referendum decision, economic growth is predicted to be 2.4% lower than previously expected. Here are the revised OBR forecasts:

  • 2016: 2.1%
  • 2017: 1.4%
  • 2018: 1.7%

Borrowing increased

Hammond made a distinction between borrowing to cover the deficit and borrowing to invest, and at £122bn, Government borrowing will increase significantly.

New fiscal rules

To protect against bumps during Brexit, Hammond announced three new rules:

  1. Cyclically adjusted borrowing to fall below 2% by the end of this Parliament, and public finances to return to balance as early as possible during the next Parliament
  2. Public sector net debt to fall as a share of GDP by 2020
  3. Welfare spending to be capped

Just About Managing (JAM)

Due to the state of the economy, Hammond avoided this phrase coined by Theresa May, but did announce:

  • Freeze in fuel duty
  • Offset the rising cost of foreign holidays
  • Ban on letting fees being charged to tenants
  • Income tax threshold rising to £12,500
  • Higher rate threshold rising to £50,000
  • Minimum wage rising to £7.50 (in 2017)
  • Possibility of removing the pensions triple-lock (after 2020)

Budget moved to Autumn

To allow time for tax changes to be made in advance of the tax year, the Budget is moving to Autumn. That means no more Autumn Statements – from 2018, there will be a Spring Statement instead. At least that means major changes will only happen once a year.

If legal hurdles are overcome and Article 50 is triggered at the end of March 2017, the final Spring Budget will be a significant measure of the nation’s fiscal position.

Going forward

Although there are many challenges and changes to the economic climate, the Government is committed to boosting business in the UK.

Philip Hammond said: “My priority is to ensure that Britain remains the number one destination for business – creating the investment, the jobs and the prosperity to protect our long-term future.”

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Great British Brilliance: From 15 to 67 Medals in 20 Years

Historic. Epic. Astonishing. Dazzling. Awe-inspiring. Extraordinary. Mesmerising. Heroic.

Words seem so inadequate when trying to describe what most of us are feeling about Britain’s performance at Rio2016.

The spirit of the Brazilian Olympics started like a slow burning flame. It was most likely sparked here back home on Day 2, when 21-year-old Adam Peaty won gold for the 100m breaststroke. Then on the same day, Jazmin Carlin won a silver medal in the 400m freestyle. The days that followed fanned that Olympic spirit flame until it became wilder and swept more and more of us along with it. There was something for everyone – action, drama, thrillers and love stories – all unfolding live by the second, and it was addictive.

On the second last day of the Games, when we were already gasping at the dreamy results, we were in for more treats:

First, Liam Heath won Gold in the men’s kayak 200m sprint.

… Shortly after that, Vicky Holland was awarded a Bronze medal after her gruelling race in the women’s triathlon,

… then boxing flyweight, 33 year old Nicola Adams, won Gold – becoming the first British boxer to retain an Olympic title in 92 years.

… Next came Bianca Walkden, with a Bronze medal, beating Morocco’s Wiam Dislam.

… Then came one of the highlights for millions around the globe: possibly the greatest TeamGB athlete of his time, Mo Farah ran to clinch his incredible “Double Double”. Witnessing this sporting icon trip and then get back up to take the men’s 5,000m gold medal, was enough to bring many to tears. Indeed, Mo Farah made Olympic history by winning the 5,000m and 10,000m in both the London and Rio games.

MoFarahEC2014-6-1
Mo Farah wins the 5,000m and 10,000m Mens track events, achieving his “Double Double” gold

But there was more to come. Team GB women’s 4 x 400m relay, won a bronze medal – Ceilidh Doyle, Anyika Onuorh, Emily Diamond and Christine Ohuruogo bringing it home in style.

Super heavyweight boxer Joe Joyce’s silver medal brought the total medal count for Great Britain to an outstanding 67, second in the world to the USA – even beating China, and smashing a 108-year-old national record for most medals won.

Compare that to the 15 medals won in 1996 – which included a solitary gold medal won by Sir Steve Redgrave and Sir Matthew Pinsent, who won the men’s coxless pair in the Atlanta Games.

… That’s a mere 20 years gap between 15 and 67 medals.

Have a look at the detailed TeamGB Rio Olympic 2016 medal table here.

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Great Britain’s medal takings at the Olympic Games Rio 2016 – BBC

For any nation competing, success at the Olympics demands a focussed plan and sufficient funding to implement this plan. Funding is essential to nurture athletes from a young age, through specialist training programmes, by providing subsidies, research, facilities, equipment and expert trainers.

In Britain, the establishment of the National Lottery was pivotal to this plan to succeed, and it started funding the World Class Performance Programme – which was implemented in 1997, after the 1996 Atlanta Olympics result. The British have increased spending on Olympic sports from £5m a year before the 1996 Atlanta Games – when the UK came 36th in the medals tables, to £350m (€410m) by Rio 2016, where it came second.

Regarding focus: The Olympics is a competition where you need to be the best in the world to even qualify. Being a Jack of all Trades and a Master of none is simply not an option here.

After the 1996 Olympics, it was decided to concentrate funding and focus only on sports that we performed in. This decisive move, that caused much controversy worked. By focussing on what British teams had an advantage at already, they already had a foot on the road to a medal. The Brits also concentrated on sports are not hugely popular or widely played – this gave them more of a chance of a medal with less competition – pretty clever “niche market” strategy.

In 2006, the year after London won the right to host the 2012 Games, UK Sport became responsible for all performance funding, which is reflected in figures that have risen from just under £60m for Sydney to the current total for Rio.In essence, every citizen has donated £ 1 per year to the training of this team.

_90659754_andy_murray_team_gb_pa
After an heroic battle, British champ Andy Murray beat Juan Martin del Porto to win gold in the Men’s Singles tennis event

Rio Olympics – the connections that will keep giving:

On the day of the opening ceremony of the Rio Olympics, UK trade minister Lord Price said in his speech at British House in Rio that the Olympic Games reminded us all that we are equals united by sport, and that this extended to other areas. He wanted Brazilian investors to know that the UK was “open for business”. He had lead the first trade mission to Argentina in May, before the brexit result was announced, and had said at the time that the growing economies of Latin America offered huge opportunity for British business.

UK suppliers won contracts in excess of £ 150m for the Rio Games, confirming that small firms are keen to trade with South America. FSB national chairman, Mike Cherry has said that the number of small businesses exporting to the continent have increased by 50% over the past five years.

Latin American countries have expressed an interest in striking free trade deals with the UK in the wake of Britain leaving the EU, and Brazil’s foreign minister, José Serra, said last month he would look to open negotiations via Mercosur, the five-member trading bloc.

With our team’s commendable behavior and performance throughout the Games, the cultural diversity in the team and diverse talents represented, Britain has really made it clear to the rest of the planet that this small Great island is Ready to do Great Business with the world.

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Team Great Britain – Thank You from every one of us, united as a nation, claiming our place on the podium at the Greatest Show on Earth

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Brexit, the US Election and British Business

After a seemingly endless trail to these fraught US elections – which have featured more turbulence, twists and turns than a series of Game of Thrones – businessman Donald Trump has become the 45th President of the United States. Indeed, 2016 will go down in history as one of the most volatile financial years ever. With the uncertainty of Brexit dangling over their heads like the Sword of Damocles, hundreds of Britain-based SME’s are now facing the impact of “Trumponomics” on top of Brexit uncertainties.

As expected, the dollar immediately plummeted after Trump’s victory, and may be unstable for a while. The US economy may take time to settle before changes start to kick in. The main European markets ultimately ended the day up – as such the expected meltdown did not occur. Experts are saying that radical change is unlikely to happen immediately – which is good news for stock markets. How the US economy reacts over the next few years will be interesting to watch, however.

Trump’s victory speech certainly soothed some fraught nerves, and towards the end of the day many markets were calmer. The President Elect spoke of healing and uniting the nation, he offered his thanks to Hillary Clinton for her service and hard work over the years, and talked about global relations.

While a Trump presidency is likely to add to global economic uncertainty, analysts believe the impact on the UK economy will – at least in the short term – be limited. Capital Economics has left its forecasts for UK growth unchanged 1.5pc in 2017 and 2.5pc in 2018 following the US election result. Outside the EU, the USA is the UK’s biggest export market, with a fifth of UK goods and services sent to the world’s biggest economy, equivalent to 6pc of UK gross domestic product (GDP). But Jonathan Loynes, an economist at Capital Economics, argues that there are several reasons why a Trump presidency would not be as painful for the UK, as it might be for other European countries. He sights factors such as the plunge in the value of the pound following Brexit – ultimately helping the UK to regain it’s competitiveness; a weaker dollar against low yielding currencies could help the pound to “find a floor”, easing concerns about runaway inflation. He also added that the political consequences for the UK, due to our good relationship with the US, plus the bonus that the UK has already had its “revolution” against the establishment, as positive factors. Brexit inspired the Trump vote, while mainstream politicians in the euro-zone – especially France, Italy and Germany – will be looking on with considerable unease while populist parties take encouragement from the events that have unfolded in the US and teh UK.

Britain’s main stock index, the FTSE 100, recovered from it’s early-morning slump, gaining 0,7 percent, while Germany’s DAX was up 0.5 percent and France’s CAC-40 gained 0.5 percent. This pattern has echoed the reaction to the Brexit vote – only it happened much faster: complacency, surprise and panic followed by swift recovery. Maybe Trump will prove to be less controversial than he has promised? Let’s hope so.

Practically speaking, there is a bit of breathing space before all these policy changes would come into being. In a Brexit scenario, the process of leaving the EU will take two years before it is phased in. The US president is sworn into office in January 2017, after which policies that President Trump has mentioned in his campaign will need to be passed by the Senate – and his revolutionary policies may or may not be approved by the extremely conservative administration in place.

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Extraordinary times call for caution and sensible business practice.

In terms of practical advice for businesses, it is crucial that they use this period to renegotiate, reassess and re-strategise to manage all foreign exchange risks. Many companies buying US dollars have already shortened the length of their forward contracts significantly, dropping these from an average of 90 working days per contract to less than 70 days, in anticipation of financial upheaval. Some 75 per cent of the earnings of the UK’s largest 100 companies come from overseas with many reporting their results in dollars. If we are faced with a situation where the pound becomes weaker, the knock-on effect may be felt down entire supply chains.

It is also on businesses to make sure that these supply chains are performing super-efficiently and cost effectively. It is a good idea to try and renegotiate future deals with one’s current suppliers, or in some cases, seek new suppliers who can offer the best possible deals.

It seems that UK business owners are relentlessly carrying on with business as usual. Given the difficult economic conditions in the recent past and the unpredictability of the future, business owners here have come to believe that with a combination of new technology available (i.e. access to effective ways to market their products online and many business tools) together with their own hard work, an innovative approach and good business management, there is every chance  of succeeding in this economic climate. After all, small businesses are essential to the economy of the UK, and the government knows it. Trump is all about business, hence the world is all about business as never before.

One part of Britain that will have their eye firmly on developments in the USA is Wales. For 70 years the US has been Wales’s top investor, accounting for 40% of the foreign money invested in it, and therefore the ramifications of the Trump administration’s economic policy are of massive interest there. Around 275 US companies are employing 48,000 people operating in the region – a significant chunk of the economy. Welsh exports to the USA are around £2.7bn while imports from the US to Wales are valued at £0.6bn.

Theresa May’s diplomatic message to the President Elect was that Britain and the USA have had an enduring and special relationship based on the values of freedom, democracy and enterprise in the past. The USA has been a close ally of the UK, with British foreign policy being closely coordinated with the US.  This special alliance has been strengthened by close cooperation through the World Wars, the Korean conflict, the Persian Gulf War, in Operation Iraqi Freedom, and in Afghanistan, and through trade agreements such as NATO. The two countries are in constant contact on foreign policy issues and global problems.

After Trump’s election result was confirmed, the UK government has made it clear that it is open to beginning a new trade relationship with the US. Keeping an eye on the business ball but adopting an optimistic outlook, wouldn’t it be excellent if trade relations with the US were favourably negotiated for Britain – offering new and favourable markets as an alternative, or an addition, to existing European markets after Brexit kicks in?

As long as businesses are prepared for the inevitable ups and downs ahead by having various risk mitigation plans, including buffers and insurance strategies for padding, there is a great chance that the effects of these upheavals can be minimised – even optimised.

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