Your family wake-up call

[milanbenes]

http://business.timesonline.co.uk/ar...824360,00.html

"THE word “recession” is being whispered in some quarters of the City. A string of gloomy figures used as indicators of Britain’s economic health are creating genuine concern. ",


Milan.

[milanbenes]

they must be expecting problems to offer advice like this....

"DEBT MANAGEMENT

IF YOU are one of the growing number of cash-strapped Britons buckling under a collective £1,000 billion of debt, you will need to take precautions to make sure that a recession does not push your finances over the edge.

Vincent Cable, the Liberal Democrat Shadow Chancellor, fears that many borrowers are unprepared for an economic downturn. He says: “As the economy slows, the problems of extreme debt will increase, with more and more people falling behind with mortgage and loan repayments.”

Unemployment is a primary cause of overindebtedness: ideally you should have a cash reserve of between three and six months’ net salary to keep your head above water should you lose your job.

If you have already accumulated sizeable debts, do not ignore the problem and hide those letters demanding payment. Nick Pearson, national debt co-ordinator for Advice UK, says: “Make a list of your sources of income and expenditure. Prioritise your debts: a mortgage and loans secured on your property should top the list. If you cannot afford to make all your repayments, make a payment offer that you can afford on unsecured debts such as store and credit cards.”

If the UK does fall into recession, debt consolidation companies are sure to advertise heavily on television. But treat these deals with extreme caution — they turn unsecured borrowing into a debt secured on a property with a term as long as 25 years. They have also been criticised by debt advisers for being loaded with hidden fees and expensive interest rate charges.

For more advice on borrowing visit www.timesonline.co.uk/borrowing

THE STOCK MARKET

THERE may be a growing chorus of opinion that the UK’s economy is slowing, but investors could be forgiven for wondering whether it matters. After all, if economic growth was so important, why has the stock market recently been hitting four-year highs? To some extent, this may be the delay between cause and effect. Richard Jeffrey, of Bridgewell Securities, the stockbroker, says: “In the longer term, the stock market’s fortunes are fairly closely tied to economic fortunes, but in the short term, the tie is fairly elastic.”

Khuram Chaudhry, of Merrill Lynch, the investment bank, agrees: “What the economics textbooks say is that profits don’t grow in excess of gross domestic product or economic activity, but there is a lag.”

The stock market values companies on the basis of their profitability, says Jeremy Batstone, of Charles Stanley, another stockbroker. “In the short term, obviously companies can achieve that profitability by taking to the acquisition trail, as they have been, and stripping out costs and achieving the sort of short-term profits growth that investors have been demanding.”

Ultimately, though, they must come back down to earth, even if some return faster than others. Alex Scott, of Seven Investment Management, says: “If you look at

UK large-cap companies, you have a lot of exposure to global markets outside the UK — companies such as BP, Vodafone and GlaxoSmithKline — which will limit the impact of the UK economy to some extent.”

So take profits on small and mid-cap companies, recommends Karen Olney, of Dresdner Kleinwort Wasserstein. But she still believes that the City will be surprised by the strength of company profits next year, while Mr Chaudhry thinks that they will weaken.

Perhaps both are barking up the wrong tree. “A lot will depend on what’s happening elsewhere,” Mr Scott says. “If the UK economy goes through some local difficulty but the rest of the world stays upbeat, then I think the positives will probably win out.”

Whatever your view on the market, attempting to play the timing game can be dangerous. The worst thing you can do is wait to see what happens, watch the stock market crumble with the economy and then sell your shares. Hold your shares for the long term.

For more investment articles visit www.timesonline.co.uk/invest

SMALL BUSINESS

THE first rule for entrepreneurs and small businesses trying to protect themselves from an economic downturn is to keep talking.

Stephen Alambritis, of the Federation of Small Businesses (FSB), explains: “Keep in touch with your accountant so you know what your cashflow is. Also let your bank know how you are preparing for tougher trading conditions.”

Mr Alambritis says that small firms should focus on trying to maintain sales. He says that retail firms might be able to increase their opening hours, while those in service industries should double their efforts to win new contracts.

Expanding any potential customer base might also be an answer, either by trading online or by exporting.

If sales do fall, the FSB suggests that you cut costs. “If you have a plush company car, downgrade it,” Mr Alambritis says, “or talk to staff and explain that pay increases may be put on hold. But entrepreneurs should set a good example by feeling the effects as much as their staff.”

Firms can also ask to postpone the annual rent review on their premises or renegotiate bank charges to help to trim outgoings.

However, there is one area where you should never cut corners. Mr Alambritis says: “Never delay paying invoices. Companies that do this risk paying interest on the outstanding payments as well as damaging their reputation.”

Cashflow should also be a concern for those who want to set up their own business. Mike Adams, of Abbey, says: “Entrepreneurs seeking funding in an economic downturn need a really tight business plan. They need to show that all spending is crucial, show how they will credit-check customers and have a good plan for managing the sales ledger.”

"



someone's gonna get burnt

Milan.

[threaded]

Dunno what they're worrying about, there's plenty of work, all my places are chockablock with Polish guys over in the UK to work work work. Some have a fair old commute as well, but everywhere closer is already full. Even had a Lithuanian on his way up to Aberdeen to work on the oil stuff the other day.

[ratewhore]

MB,

Do you do anything other than read timesonline and bang on about a recession?

[milanbenes]

pays the bills dunnit

Milan.

[TwoWolves]

The indicators are that we have been in a slow growth cycle for at least half of this year but it has been hidden by government spin and a compliant press. Remember that the markets are looking around about a year into the future on average and I think, as do many analysts that 2006 will see better although volatile growth. Modest volatility is where the City institutions make money, thus ideal conditions ahead for them.

The current outlook does not seem too bear-ish but neither is it that rosy. Brown has, typically got his sums very wrong and the public sector is going to be sweating for some time to come. Fingers crossed that there are no major market upsets.

Wolfie has spoken.

[ratewhore]

Wolfie has spoken.

Freedom for Tooting!!!!!!!!

[Francko]

Freedom for Tooting!!!!!!!!

Tooting Bec or Broadway?

[OwlHoot]

Remember that the markets are looking around about a year into the future on average and I think, as do many analysts that 2006 will see better although volatile growth. Modest volatility is where the City institutions make money, thus ideal conditions ahead for them.

The current outlook does not seem too bear-ish but neither is it that rosy. Brown has, typically got his sums very wrong and the public sector is going to be sweating for some time to come. Fingers crossed that there are no major market upsets.

Wolfie has spoken.

You might be right, but a month or two ago I heard some pundit predict we were in for the mother of all slumps in 2006.

[Mordac]

Tooting Bec or Broadway?

Popular Front, actually.