Wonderful Wefinda weekly news (Week ended 21 January 2011)

Inflation up as expected
Largely as predicted the Consumer prices measure of inflation (CPI) rose to 3.7% in December. The rise was mostly driven by increased fuel & energy costs as well as food price increases. The more traditional measure of inflation, RPI, also rose to 4.4%. Bizarrely, the office of National Statistics commentated that inflation would have risen further had furniture stores followed their usual practice of putting prices up in December ahead of January sales.

Financial pressure increases for businesses
Insolvency specialists Begbies Traynor have reported that the number of businesses facing financial pressure rose to 147,836 in the fourth quarter of 2010. This represents a rise of 4% on the previous year. Within this total, Begbies have identified 3,018 companies as “critical”. The Begbies executive chairman commentated “For smaller businesses, we are entering the darkest hour before the dawn”

Bank talks on lending to SMEs stall
One of the reasons for the increased financial pressure experienced by businesses could be the continuing reluctance of the banking sector to lend to business. Talks with the government seem to have stalled with banks holding out for concessions on bonuses and disclosures countered by government threats to split banks up into high street banking and investment houses.

Ordinance Survey reflects changing face of high streets
The latest reports from Ordinance Survey give an interesting insight into the changing face of our high streets through the recession. In the period since October 2008, the number of estate agencies has fallen by 9.2% and employment agencies by 13.4%. These figures are eclipsed by building societies which now have 28.2% less offices in our towns. The only business bucking the trend seems to be betting offices which have shown a 5% increase.

SMEs would welcome tax simplification
With the deadline for submitting self assessment returns fast approaching a survey of SMEs shows that they could be willing to pay more tax, provided that the playing field was equal for all and that tax calculations were simplified. The forum for Private Business survey showed 57% of small businesses would pay more tax in return for less red tape as long as larger firms were subject to the same regulations.

So, what do we have to look forward to?
In Parliament on Tuesday the Treasury select committee start their review on the fundamental principles of tax policy. This is an area that Wefinda will be following with interest. Elsewhere, Business Innovation & Skills continue their look into rebalancing the economy, a tricky subject given the current gloomy economic climate.

The latest growth figures due out on Tuesday will make interesting reading. Many analysts are predicting growth to have slowed dramatically, leading to fears of a “stagflation” period of low growth and high inflation, last seen in the 1970s.

And finally

With regulations on business recycling ever increasing Wefinda is always on the look out for innovative ways of getting rid of unwanted packaging. Hats off therefore to the sculptor H A Schult who has built a 5 bed hotel in Madrid’s main square out of 12 tons of recycled rubbish. The hotel was fully booked for the 4 days it opened to paying guests.