UK trade deficit in goods and services was £4.3bn in June, compared with a deficit of £2.7bn in May
Commenting on the trade figures for June, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“It is disappointing to see such a large trade deficit in June. Although the monthly figures would have been affected by public holidays, such as the Diamond Jubilee, it is worrying that the trade deficit in the second quarter as a whole was much higher than in the first. Underlying export volumes fell by 3.3% in the second quarter, while import volumes fell by only 0.5%. There is no question that British exporters are facing major challenges as a result of problems in the eurozone, but the rebalancing of the UK economy towards exports is taking too long.
“British exporters have untapped potential to expand, but they need more government support to help them compete globally and diversify towards growing markets outside the EU. We need firmer action in key areas such as trade finance, promotion and insurance. More infrastructure spending and the early creation of a business bank would make a major contribution towards stronger growth in UK exports.”
A UK State aid scheme that aims to reduce the cost of finance for businesses with turnover of up to €300 million is to be allowed to run for a further six months, the European Commission has confirmed.
Earlier this year it decided that the National Loan Guarantee Scheme was in line with the EU’s crisis State aid rules for banks, because it ensured that the reduced funding costs from which banks will benefit were passed on to SMEs. That authorisation lasted only until 30 June. However, the Commission has now extended that deadline to 31 December 2012.
The UK credit easing scheme was originally limited to small and medium-sized firms with a turnover of up to €60 million, but has since had its scope widened. The Commission agreed that it still met the rules for the banking sector during the economic crisis.
“Facilitating SMEs’ access to finance is a Commission priority to overcome the crisis,” Competition Commissioner Joaquín Almunia said. “The National Loan Guarantee Scheme will reduce borrowing costs for SMEs thanks to a State guarantee, without unduly distorting competition.”
Recent estimates suggest that deepening relationships between the EU and its key trading partners could contribute significantly to Europe’s recovery.
If the EU pursues its ambitious external trade agenda this could boost the EU’s GDP by 2%, or more than €250 billion, MEPs were told recently. This is equivalent to adding an economy the size of Austria or Denmark.
An ambitious agenda could also help create more than two million jobs across the EU.
By 2015, 90% of economic growth will be generated outside Europe, with one-third in China alone. Hence, tapping into the markets of the Union’s key trading partners will play an increasingly significant role for Europe’s growth in the future, the European Parliament was told at a recent meeting.
More than two-thirds of these gains in growth and jobs would materialise through trade agreements with the USA and Japan.
Having seen the free trade agreement (FTA) with South Korea through to its first anniversary recently, the European Commission believes that FTAs are “within reach” this year with Canada and Singapore.
Despite difficulties in moving forward in the multilateral context of the World Trade Organization (WTO), the Commission said, the EU has not stood still in the face of rapid changes in the global economy and is moving ahead to further connect to new global growth centres.
FTAs covered less than a quarter of EU trade before 2006. Concluding on-going negotiations with Canada, Singapore, India and other ASEAN states would bring this figure up to half, and moving forward with the USA and Japan would bring it up to two-thirds.
The EU remains the world’s largest exporter, importer, source and recipient of foreign direct investment (FDI). It has managed to hold on to its 20% share of total world exports despite the rise of China, whereas Japan and the USA have seen significant declines in their shares.
Annual producer output inflation down from 2.0% in June, to 1.7% in July
Annual producer input inflation up from -3.0% in June, to -2.4% in July
Commenting on the producer price figures for July 2012, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
“The producer price figures are positive overall. Output inflation has decelerated steadily since last September, and the annual rate is at its lowest since 2009. Input inflation has risen in July, but the annual rate is still in negative territory. The figures do highlight some worrying upward pressures on prices, in particular the impact of the US drought on food prices.
“We expect consumer price inflation to continue falling over the next year, which will be good news for the economy. In the face of tough fiscal austerity at home and difficult problems in the eurozone, falling inflation will be key in easing pressures on disposable incomes and underpinning demand in the economy.
“The Monetary Policy Committee should not use additional QE to limit the fall in inflation. In recent years UK inflation has consistently been above the 2% target. A temporary period of inflation lower than this level in 2013 would benefit the economy and should not be resisted. Meanwhile the economic situation remains difficult and businesses as well as consumers are facing major challenges. While the government perseveres with its deficit reduction plan it should act more forecefully to create the right conditions for businesses to grow, through deregulation, and supporting business lending and exports.
The government has announced the results of its energy red tape challenge initiative. The package will see the scrapping of 86 regulations and improvements to 48 regulatory regimes. According to government estimates the package, alongside other measures, will save businesses around £400 million over the next 20 years. Most of the measures contained in the package relate to minor or out of date regulations. An announcement on the future of the CRC Energy Efficiency Scheme, a current regulation that seriously burdens businesses, is due in the autumn.
As part of a drive to cut red tape burdens, Minister of State for Energy, Charles Hendry, has announced the scrapping of 86 regulations and a further 48 improved regulatory regimes, whilst keeping protections as strong as ever. Coupled with other reforms, DECC’s overall reform package is estimated to deliver businesses savings worth around £400 million over the next 20 years.
Minister of State for Energy, Charles Hendry, said:
“Energy is vital to the economy and essential to driving growth. It is also the biggest infrastructure sector in the UK. Our reforms aim to stimulate over £100bn of new investment in the electricity sector and could support around 250,000 total jobs in electricity to 2030.
“It is therefore vital that we have a regulatory regime which promotes fairness and consumer and environmental protection, but does not impose unnecessary costs or barriers to generating the necessary investment, innovation and skills we need to build the low carbon economy.
“The Red Tape Challenge has provided the opportunity to ensure we continue to meet these objectives. We have listened to our stakeholders as they suggested regulations which add cost or complexity without effectively leading to protections, and I am pleased to announce that DECC will scrap or improve 134 regulations.”
Supporting today’s announcement, Terry A’Hearn, Regulation Lead of the Aldersgate Group said:
“We welcome the Government’s work in cutting back excessive and outdated regulation, whilst ensuring that protection of our environment remains as strong as ever.
“Smart regulation corrects market failures, drives innovation and provides the foundation for long-term economic growth, jobs and competitiveness and we congratulate DECC’s recognition of the importance of prioritising these long-term outcomes.”
A new version of the Export Control Organisation’s current Training Bulletin is now available.
The Bulletin includes details of all forthcoming ECO seminars and workshops taking place from September to December 2012 (along with an attached course booking form at the bottom of the bulletin). Courses are scheduled to be held during the next few months in Glasgow, Aberdeen, Nottingham, Oxford and London.
The schedule includes a briefing session on the implementation of the Intra-Community Transfer Directive concerning military goods and a seminar on Ministry of Defence procedures (eg F680 procedures).
These courses are all designed to increase your understanding of UK strategic export controls and what your responsibilities are when exporting controlled items. All courses are delivered by UK government experts working within the UK’s Export Licensing Community.
The Embassy of the Syrian Arab Republic has recently announced changes to the requirements of legalisation of documents with effect from 9th August 2012.
Please see the official notification received from the Arab-British Chamber of Commerce.
We have been informed by the Egyptian-British Chamber of Commerces that their certification charges for documents, haveincreased slightly with effect from 1st August 2012.
The new total costs for documents, including Vat, are now:
Certificate of Origin (Original) – Members: £130.10, Non-Members: £160.10
Certificate of Origin (Copy) – Members: £124.10, Non-Members: £154.10
Please note that payment for these documents would be required in advance, as the certification andlegalisation in London has to be paid at the time of stamping.
Commenting after the release of A-level grades for 2012, Caroline Williams CEO Norfolk Chamber of Commerce said, said:
“We offer our congratulations to Norfolk students who have achieved their goals at A-level.
“Business will welcome the fact that the constant grade inflation seen in previous years has finally been constrained. Companies tell us that they have had a hard time assessing the skills and abilities of job candidates with A-level passes, to the point that only 29% of businesses surveyed in 2011 felt very or fairly confident in hiring a school-leaver with A-level qualifications. An end to grade inflation will improve business confidence in the qualifications achieved by young people.
Business will welcome the fact that the constant grade inflation seen in previous years has finally been constrained
“Yet it’s not all about A-levels and university. With university tuition fees rising and many young people looking for alternatives to higher education, business wants to see more media attention and investment in further education and vocational training.. Norfolk businesses including smaller businesses have a real opportunity to take advantage of the new apprenticeship schemes available to them to ‘train their own’. Norfolk Chamber have recently taken on 2 higher level apprentices and they are very quickly adding real value to the business at the same time as they are gaining valuable work experience.
“From September, schools will have a new duty to secure independent careers advice for students but they do need the business community to work with them to ensure the information is up-to-date and relevant to our long term needs.. Norfolk Chamber members are committed to work closely with the education sector to ensure that vocational options, including apprenticeships, are given as much attention as the option of going to university.”
Commenting after the release of the GCSE grades for 2012, Caroline Williams CEO Norfolk Chamber said:
“We congratulate all Norfolk GCSE students today who are reaping the rewards of their hard work . Nationally, the number of pupils achieving top grades has fallen for the first time since the exam was introduced in 1988 although many schools in Norfolk are bucking that trend to report some of their best-ever results.
Young people have a lot to offer, and businesses are keen to employ them. Unfortunately, in recent years too many new employees have lacked basic skills and required remedial training for inadequate literacy and numeracy. Employers must be assured that qualifications reliably reflect a given level of skill, and will welcome an end to artificial grade inflation and planned changes to increase rigour.
“We know that teachers and pupils are working hard to raise genuine skill levels, particularly in English and Maths, and this must remain a top priority. Employers will reject any measure of success that focuses exclusively on the most capable half of students, without supporting other young people in reaching high levels of literacy and numeracy. Norfolk Chamber members are working with schools and their young people to help them understand what is needed from the world of work as they are our employees of the future
“The increase in entries to science exams this summer is good news for business. Young people with strong qualifications in the sciences remain sought-after by employers, and they can expect to succeed in exciting and rewarding careers.
“Chamber research shows that a lack of language skills has been a barrier for Norfolk businesses looking to sell their products and services overseas. One swallow doesn’t make a summer, but we hope the slight rise in entries for modern languages this year is a signal that more students will study a language in future years.”
Commenting on the Montague Report on housing, published today, Jonathan Cage, Managing Director, Create Consulting Engineers Ltd and Chair of the Norfolk Chamber Planning group said:
“The housing market has had little or no government support since the start of the recession unlike other industries, instead it has knuckled down, reshaped and amazingly is ready to meet the challenges as we come out of recession. The last few years has lead to the shortage in houses being constructed dropping further behind the required targets, the whole industry now needs to push forward with confidence to start delivering the much needed housing required in the UK. We now need the recent planning reforms to work, along with the release of funding for developments and motivated land owners. This coupled with a more positive, realistic outlook from the planning authorities will enable the regions house building industry to get on, delivering a quick and much needed boost to the economy.
Paul Clarke from Bidwells said:
“This is a further Government report that confirms how important housebuilding is to contributing to economic growth, and how how as a nation we never meet our housing requirement. The key element to this report is the importance of the private rented sector which could provide high quality accommodation. This form of development could provide flexible accommodation to allow potential employees to take up jobs – the difficulty will be reinvigorating this part of the housing market when financing is not readily geared for it. There remains an inertia in the development system and it fundamentally relates to access to finance. If major investors such as Aviva want to invest in building in the residential market, rather than stocks and shares, then this could help. We can continue to modify and amend the planning system, however, unless landowners are incentivised to release land/buildings, and developers/investors can see an ability to make profit through the delivery of housing, the residential market will remain stalled.
The move in tenure from owner-occupied to private-rented is significant and the ‘Englishman’s home is his castle’ remains a fundamental part of our psyche. It may be long overdue given that the bias in most other European countries is towards private rented. It is important, however, to recognise that an ability for potential employees to take up jobs wherever they may be is vital to a revived and more balenced economy. “
Steve Lucas from paul robinson partnership (uk) llp commented:
“The suggestion of councils to consider relaxing requirements for developers to build affordable social accommodation as well as private housing would seem on the face of it a sensible approach. The housing sector, in particular, is in dire need of invigoration and offering prospective developers the opportunity to maximize their returns could provide the kick-start that is needed. However, yet more ‘tinkering’ with planning policy could, in the short term, actually stall impending housing projects as developers postpone decisions whilst awaiting the outcome of potential legislative changes.”
Caroline Williams CEO Norfolk Chamber commented:
“A housing market that doesn’t deliver the right number of homes, in the right place, at the right price and of the right quality, has a negative impact on business. Studies show that high housing costs cause labour shortages, especially when companies try to recruit workers in high-cost areas at the lower end of the pay scale. Furthermore, a poorly-functioning housing market may force employees to live further away from their place of work which drives up congestion along key routes and is bad for the environment.
“A better functioning private rented sector is essential to improving the Norfolk housing market particularly at a time when the high cost of housing puts home ownership beyond the reach of many. We welcome the measures contained in the Montague Report to improve the private-rented sector, but these measures will not be enough on their own to radically improve the supply of new homes across the country.
“A poorly designed planning system and availability of land has for too long prevented development and growth. We would like a firm commitment from the government to increase the amount of available land, which will go some way to delivering new and much-needed housing. In some cases, it may be necessary to review the greenbelt status of land with little amenity value, which could be better used to provide jobs and homes. At a time when the economy is stagnating, it is vital that the government does everything possible to unlock house building which will in turn, boost much-needed growth in the Norfolk economy.”