Month: October 2013

Non-bank lending to small businesses at highest level since 2008

Non-bank lending to small businesses has hit a five-year high, as more enterprises turn to alternative sources of credit such as peer-to-peer lenders and invoice financing.

With traditional bank lending in its fifth year of decline, the UK’s commercial finance brokers say they have arranged £10.5bn of credit for small and medium-sized enterprises in the past year. This marks the highest figure since 2008 and an annual rise of 17 per cent.

Meanwhile, asset-based lenders, who advance money against equipment or invoices, also reported their biggest annual total since 2008, rising 10 per cent to £17.4bn in the year to June.

The data, from industry associations, highlight the shift away from traditional bank lending to small business, which has shrunk by a quarter since 2011. SME funding through leasing and asset finance has more than doubled in the same period, according to the National Association of Commercial Finance Brokers .

Its members also arranged £501m worth of loans through innovative channels such as peer-to-peer lenders, which match individuals to companies that want to borrow, a rise of 80 per cent.

Adam Tyler, chief executive of the finance brokers association, said that while the government’s Funding for Lending and Help to Buy schemes have eased credit conditions in the property market, small businesses were still being neglected by mainstream lenders.

“Alternative finance is providing life support to the sickly SME market and will be vital to give it extra impetus to boost the economic recovery,” he said.

“These figures show that alternative options from leasing and asset finance to peer-to-peer lending are increasingly taking up the slack and plugging a vital gap.”

The commercial finance brokers’ association, which compiled the data from its 1,000-plus members who arrange loans for businesses, will join the British Bankers’ Association to brief MPs on Monday on the use of alternative finance.

A BBA spokesman said banks were working with brokers to help customers gain access to alternative sources of credit. “While banks are open for business there are other ways to get finance. Bank finance is not always right for companies.”

Bank of England figures for the second quarter of 2013 showed that, excluding overdrafts, SMEs paid back £600m more than they borrowed from banks, although gross lending rose slightly to £10.2bn. The BBA said fewer than three in 10 applicants were turned away and total SME bank borrowing stood at £114.9bn.

The Asset Based Finance Association, which represents lenders rather than brokers, said last month that its advances rose from £15.8bn to £17.4bn in the year to June.

Mr Tyler said there was still a lack of awareness among small businesses and their advisers on alternatives to bank loans.

Even after the recent increases, brokers remain far short of the £19.7bn of finance they arranged in 2006-7.

Copyright The Financial Times Limited 2013.

UK car production continues to strengthen

UK car production continued to strengthen last month, industry figures have shown, with output now having passed the one million mark this year.

The Society of Motor Manufacturers and Traders said production rose to 140,888 in September, up 9.9% from a year ago.

The figures means output for 2013 so far has now reached 1,125,433.

In addition, car production for the 12 months to September hit 1.5 million, the highest rolling 12-month total since October 2008.

The number of cars produced for export rose 9.3% from a year earlier, helped by high demand in China, Russia and the US for luxury British brands.

Mike Hawes, chief executive at SMMT, said the sector was “one of the UK’s biggest success stories in recent years”.

“This long-term financial commitment and robust demand for UK-built products show the global appetite for high-quality, desirable products borne of the UK’s world-class design, R&D and engineering,” he added.

However, while car output rose, production of commercial vehicles (CV) – lorries, buses, trucks and vans – fell 27.6% from a year earlier to 6,963.

“CV production remained subdued in September, with continuing uncertainty in the EU and restructuring of UK operations,” said Mr Hawes.

Bank acknowledges ‘contactless’ card problems by changing rules

First Direct has told customers who want to pay with contactless cards that they must remove them from their wallets – in an apparent admission that the technology can go wrong.

The introduction of controversial “contactless” payment cards – where customers make payments of up to £20 by briefly touching their card to a reader and do not enter a Pin number – has caused at least one bank to alter its customers’ terms and conditions.

First Direct, the offshoot of HSBC, has written to its customers saying “we have made changes to clarify that if you have a contactless debit card you must remove it from your wallet or purse before using it to make a contactless payment.”

This change seems a response to the reported cases of mistaken payments, where money has been taken from peoples’ accounts without their knowledge but where they think they brushed against a reader by accident.

First Direct offered no further written explanation to customers. But a spokeswoman for the bank admitted the change was being brought in to prevent payments being made accidentally. She said: “If you don’t remove cards from your wallet there is a danger the payment may be taken from the wrong card. It could be a bit of a nightmare if it came from a card where there wasn’t enough money.”

The banking industry has previously downplayed such fears. Around 40million contactless cards are in issue and an estimated 100million payments will be made using them this year. Almost all banks are rolling the technology out automatically, as and when customers’ cards are renewed. Cards with the “wave” logo pictured above are enabled for these types of “one-touch” transactions.

Fears of the safety of the technology surfaced in May this year when customers of Marks & Spencer claimed payments were taken without their knowledge. M&S was one of the first large chains to deploy the technology en masse at its checkouts. Many others have followed suit including sandwich chains and restaurants.

There were also fears the cards were vulnerable to fraudsters carrying readers which, if placed near enough to the cardholder’s wallet or pocket, could capture data.

UK Cards Association, the trade body for the payments industry, said: “Problems are exceptionally rare, with only a handful of cases reported where the wrong card has been debited when accidentally placed very close to a contactless card reader.”

The spokesman added: “The technology is extremely robust, has been thoroughly tested and is working as expected. Payments can only take place where the card is placed within 5 cm (2 inches) of the terminal.”

Website helps farmers in fight against rural crime

The Ulster Farmers’ Union has welcomed the launch of a new rural crime website aimed at helping farmers quickly raise the alarm about stolen goods via digital and social media.

UFU Deputy President Barclay Bell said: “Rural crime continues to be a significant issue for farmers. The unfortunate reality is that farmers and producers throughout the island of Ireland are having valuable livestock and machinery stolen on a regular basis which has a devastating impact on farm families and businesses. There is evidence that one of the most powerful tools in fighting and preventing crime is communication and the new website has been designed to create a network of communications using web and smartphone technology.

“We suspect that many items are being ‘stolen to order’ and that there is a very real issue of items being stolen in Northern Ireland and then crossing the border into the Republic of Ireland and vice versa. There is evidence that often stolen items are stored for a while before possibly being shipped out of the country. It stands to reason, that this storage period presents the best window of opportunity for recovery, which is why it is vitally important to raise awareness of stolen goods as quickly and as widely as possible.

Cross Border

“The beauty of the Farmnet website is that it takes a cross border approach which, given that there is undeniable evidence of movement of stolen goods between North and South, means that farmers can raise the alarm and reach a large audience quickly. It also complements local rural text alert schemes and allows information to be shared without individuals being bombarded by text messages.”

The website is very easy to access and easy to use. Farmers throughout the island of Ireland can log onto the blog site and enter details of stolen items at anytime of the day or night to tell the entire rural community what they have lost. The website is easily viewed on a computer, tablet or smartphone.

These details can include a photograph, any distinctive markings or numbers and when and where the stolen property was last seen. The information can be viewed by all users who register and all entries are automatically posted to The Farmnet Facebook and Twitter accounts.

Anyone who believes they have seen any suspicious activity, such as vehicles and livestock being moved, can add their comment. Historic thefts can be put on retrospectively to encourage reports of possible sightings and share information after the incident.

There are also a number of recovered items in storage which need to be returned to their owners and the site will carry details of any unidentified property which is currently held by authorities.

Barclay Bell concluded: “The Farmnet website allows farmers to take advantage of advances in technology and become part of a virtual anti-crime network. The Ulster Farmers’ Union continues to work with the PSNI, NFU Mutual and other stakeholders to address this important issue and this new website is another useful tool to have in our rural crime fighting arsenal.”

Register on and be a part of this anti-crime network.

An early Christmas present for farmers

Twitter and Facebook this week have been highlighting a house in West Belfast with a Christmas tree and lights in the garden.

A resplendent tree it certainly is – but the middle of October is nonetheless a bit early to be getting into the Christmas mood. However farmers received a nice early Christmas present this week, in the shape of a reduction in the financial discipline penalty on single payments. This was initially to be close to five per cent, then the figure moved to around 4.5, per cent, but now the final figure has been cut to 2.45 per cent. This is because the overspend of the CAP budget will be 903 million euro rather than the 1.5 billion originally forecast.

This may not sound a lot – and at the end of the day a cut is still a cut. However direct payments will be increasing by around 5 per cent because of the euro to sterling conversion figure. With financial discipline at 2.45 per cent that will still be a net gain of around 2.5 per cent – and in today’s tough financial climate a lot of people in 9 to 5 jobs would be delighted with a pay increase that almost matches inflation. On those grounds, early as it may be, this is a welcome Christmas bonus on single farm payment cheques that should be going out in December.

Inevitably in Brussels good news is offset by less positive events. That comes in the shape of a blow to something farmers have wanted for a long time, and which they believed was on its way. This is the extension beyond beef of country of origin labelling, dubbed COOL. The need for this was given a boost when farm lobby groups from Europe and North America discussed trade issues when they met last week in Mexico. These underlined that trade goes beyond the basic issue of price, with European environmental and welfare standards very different to those elsewhere. On that basis it is only fair that farmers delivering the higher standards should be rewarded for them, and that means consumers knowing the origin of products.

COOL moved up the Brussels agenda in the wake of the horsemeat scandal. There was a growing confidence that legislation would be in place next year. The UK government has always been a rallying point against this plan, claiming it represented additional red tape for food companies, because it would restrict their ability to source ingredients where they wanted. There are also claims that COOL is difficult to police when batches of product are combined for ready meal type products. However the horsemeat scandal proved that those who had good traceability standards could stand over mince used in burgers – not down to the individual animal but to the day and the herd numbers of cattle from which it was produced.

Now in a surprise move a report prepared by the European Commission has undermined the thinking behind COOL, deeming it potentially costly and cumbersome for food companies. This has to be music to the ears of the food industry, which lobbies against any labelling regulations. It will also be applauded by the UK government, as many will view it as no coincidence that the report was leaked at a crucial stage of the negotiations. It claims costs could rise for food manufacturers by between 5 and 15 per cent. This is because they would have to source EU origin ingredients, because anything else would not look good to consumers. In an amazing leap of economic logic the report then concludes that since prices would have to increase on the supermarket shelf demand would fall, meaning the COOL plan would have a negative impact on the meat industry.

The report then gilds the lily by making much of additional inspection costs if the legislation were in place, and its conclusion is that COOL is a bad idea. While what has emerged are leaks of the report it certainly seems to have been heavily influenced by the food industry, with the views of farmers and others pressing for COOL largely ignored. The commissioner responsible, the food safety commissioner Tonio Borg, says he has an open mind on this issue. One way to show that would be to take this report as a first draft – and to tell those who prepared it to think again, and not to be so influenced by the arguments of the food industry’s lobbyists.

Co-op Group to lose control of Co-op Bank

Co-op Group’s hopes of retaining control of Co-op Bank after its £1.5bn rescue have been dashed by opposition from creditors, led by a duo of hedge funds, I understand. But Co-op Group hopes the bank’s co-operative ethos can be protected.

Co-op Bank is also expected to announce later today that its provisions for the costs of compensating customers for mis-selling PPI insurance or for flaws in lending documentation, inter alia, will be around £100m greater than it expected.

Or to put it another way, a bank that has taken itself to the brink of collapse because of the scale of losses, from loans going bad and an expensive IT project that had to be written off, turns out to be even more loss making than was thought.

However I am told that the banks’ supervisor, the Prudential Regulation Authority, has concluded that the amount of new capital needed by Co-op Bank to remain viable does not need to be increased from the £1.5bn agreed in the summer.

So the challenge for Co-op Bank of staying alive remains what it was (and see what I wrote here a couple of days ago for more on this).

However, after a weekend of intensive talks with Co-op Bank’s creditors, Co-op Group, owner of Co-op Bank, has conceded – or so I am told – that its own plan for rescuing the bank has to be torn up and replaced.

Co-op Group’s original plan involved it putting in £1bn of the capital needed by Co-op Bank, with bondholders and owners of preference shares contributing the remaining £500m.

Under this proposal, Co-op Bank would have been floated on the London Stock Exchange, but Co-op Group would have retained control of it with a 70% stake.

This deal cannot go ahead without the agreement of the bondholders and owners of preference shares, and they’ve told Co-op Group they reject it.

The most important opposition to what Co-op Group wanted came from owners of 43% of “lower-tier-two-capital” bonds – or lenders to the bank with greater rights over Co-op Bank’s assets than other bondholders.

The leaders of these opponents were a couple of hedge funds, Silver Point and Aurelius, advised by investment bank Moelis.

These hedge funds favoured a plan in which their bonds would be converted largely into Co-op Bank shares, which would give the bondholders ownership and control of the bank. Under this alternative rescue, the banks would still be listed on the London Stock Exchange.

The hedge funds are getting their way.

Under a revised rescue plan, it is the bondholders – which also include insurers and pension funds – which would end up controlling Co-op Bank.

At the time of writing, that revised plan has not been formally agreed. But I am told it is likely to be finalised over the coming week – with an announcement on the detail likely next Monday.

Under any new rescue deal, Co-op Group would retain a stake, but it would be less than the 50% necessary for Co-op Group to boss the bank.

Institutional investors, led by hedge funds, would collectively be the majority owners.

This conversion of Co-op Bank into just another bank owned by professional investors has the potential to fundamentally alter the bank’s ethos and culture.

I am told that the hedge funds recognise that such perceived cultural change would be a bad thing, because they see there would be a risk of Co-op Bank being deserted by hundreds of thousands of customers who choose it because they see it as a more ethical bank than the others.

So as part of any rescue, the bank’s co-operative and ethical underpinnings are expected to be written into the bank’s governing principles.

Meanwhile it is hoped that the structure of the new deal will placate another group unhappy with Co-op Group’s original proposals, namely thousands of individuals who invested in the bank’s preference shares and perpetual subordinated bonds.

Under the Co-op Group’s rescue plan, holders of these perpetual subordinated bonds and preference shares would have received ordinary shares in the new bank in exchange for their bonds and preference shares – because that was the conventional way of forcing a financial sacrifice on investors very low down the food chain of creditors (the perpetual subordinated bonds and preference shares have less claim on Co-op Bank’s assets than the lower-tier-2-capital holders).

This would have caused considerable hardship for many of these individuals, because their existing Co-op Bank investments pay a handsome income, whereas the new Co-op Bank shares would probably pay little or no income for many years.

So there has been a pubic campaign against what Co-op Group was proposing by these small investors, co-ordinated by Mark Taber.

Co-op Group has been insisting it has been trying to protect the interests of the retail investors. And it looks as though they have won some kind of victory, because the revised rescue deal will – breaking with convention – offer them income-paying bonds.

Meanwhile the hedge funds and lower-tier-2-capital owners will receive mainly shares, because they want direct ownership of a bank that they believe can be restored to health and turned into a valuable business over three to five years.

The hedge funds and other institutional investors are also expected to invest tens of millions of pounds of their own money in Co-op Bank, to boost its capital and reinforce their control of the bank.

As I wrote on Friday, however, if no rescue can be agreed voluntarily, control of the bank would temporarily be seized by the Bank of England, under a process called resolution.

The Bank would then protect the interests of depositors by forcing big losses on Co-op Group and obliging the bank’s bondholders to convert their loans to the bank into loss-absorbing shares on terms regarded by the Bank of England as fair.

UK economic growth hits fastest pace since 2010

Official figures this week are expected to confirm that the recovery gathered speed over the summer as the economy grew at its fastest pace in more than three years.

GDP in the three months to September is estimated to have surged 0.8%, according to economists. It would be the UK’s best performance since the second quarter of 2010, beating the strong 0.7% growth between March and June. The Office for National Statistics (ONS) will publish the official data on Friday.

The pace of Britain’s recovery since March has taken forecasters by surprise and triggered a surge in consumer confidence, surveys have found, despite falling real household incomes.

According to Deloitte’s consumer tracker survey, published today, households have become more positive about job opportunities and job security and are less worried about spending money on holidays and nights out. The accounting firm’s confidence index rose to -25% in the third quarter, the strongest reading in the two years it has been running.

Part of the improvement was due to an expected increase in property prices, which is raising perceptions of wealth.

Ian Stewart, chief economist at Deloitte, said: “Overall confidence is growing and has been for the past year. Less downward pressure on incomes, combined with renewed economic optimism and an improving housing market make for a story of gradually recovering confidence – notwithstanding the fact that the level of real incomes is continuing to fall.”

Average pay is rising at just 0.7% a year compared with the 2.7% rate of inflation, according to the ONS. However, house prices rose 3.8% in the year to August, lifting the average value of a home to a new UK record of £247,000.

Paul Tucker, the deputy governor of the Bank of England who retired last Friday, said he believed the recovery had gained traction because the £375bn quantitative easing programme was finally working. Previously, the stimulus was being smothered by fears about the eurozone crisis.

“I felt that as soon as [fears] receded, spirits would revive and the existing monetary stimulus would gain traction. And I think that’s what has happened,” he said.

Separate public finance figures on Tuesday will show that the recovery is helping the Chancellor make inroads on the deficit. Higher tax revenues and lower benefit spending has meant borrowing this year has been coming down faster than expected. Economists reckon this week’s figures will confirm the trend, putting the Government on course to borrow about £10bn less than the £120bn originally forecast for this year.

Household confidence has improved despite a tightening in living standards. Asda’s Income Tracker found that household spending power, at £157 a week, is currently £2 a week less than this time last year and £8 less than at its peak in February 2010.

“Weak wage growth was a key factor, up just 0.8% over the past year – the smallest year-on-year rise on record,” Asda said, while “the rising cost of energy continues to put pressure on household budgets”. British Gas and Scottish and Southern Energy have just increased fuel bills by more than 8%.

Weak levels of household income may prompted more shoppers to stay home in September as retail footfall last month fell 2.4% compared with last year. Springboard and the British Retail Consortium, which compiled the survey, said the decline may be explained by the warm weather, which “held consumers off from shopping for winter clothes” and as families saved up for “the Christmas rush”.

ONS figures on retail sales last week showed that there had been a 19.1% surge in online shopping in September, which does not show up in the footfall index.

UK retail sales rise twice as fast as wages

Pound climbs as official data shows unexpected 2.2% annual rise in sales volumes in September, against a 1.1% increase in wages. 

British retail sales rose faster than expected in September, supporting hopes that the economy recorded strong third-quarter growth.

Retail sales volumes rose 0.6% on August to show annual growth of 2.2%, the Office for National Statistics said on Thursday. Economists had expected a rise of 0.4% on the month and 2.1pc on the year.

The encouraging data, which was boosted by an increase in furniture sales as the housing market recovered, sent the pound rising following the announcement. Sterling rose from under $1.60 to $1.609 after the figures were made public.

The 2.2% annual rise was double wage growth of 1.1pc, and is likely to lead to fears that the current rate of economic recovery is unsustainable – although comparisons are skewed since the retail data cover sales volumes rather than spending.

Food sales, meanwhile, fell for a second consecutive month.

Keith Richardson, retail sector head at Lloyds Commercial Banking, said the figures “chart returning confidence amongst consumers and a renewed willingness to spend”.

“After a more challenging August, these figures provide a boost ahead of the vital festive period, which most retailers expect to be the strongest in terms of sales since before the start of the financial crisis,” he said.

“In preparation for the run-up to Christmas retailers are focusing on the breadth and quality of their ranges to support shoppers that are willing to spend but continue to be highly selective in their purchases.”

Manufacturing has a crucial role in recovery

Manufacturers in Yorkshire and the Humber have a vital role to play in ensuring the UK economy moves up into the next gear, according to one of Royal Bank of Scotland’s senior economists.

David Fenton said that although there are signs of recovery, the national and regional economy is “only really in about third gear just now”. Speaking to the Yorkshire Post, he said: “To get up into fourth gear, fifth gear, we really need exports growth to kick in. Clearly, to achieve that there’s a key role for the manufacturing sector.”

Mr Fenton said that the UK economy is seeing a fairly broad-based recovery across a range of sectors.

“So far a lot of improvement has come from consumer spending, which is important and welcome because consumer spending accounts for about two thirds of the UK economy… it’s vitally important to the economy that we see that recovery.

“But there are limits to how much more momentum we’re going to see from the consumer sector and obviously we know that fiscal austerity still has a good few more years left so really that leaves exports and investment, we think, as the two things that can take the recovery up to the next level,” said Mr Fenton.

But he said: “What we typically find is that investment tends to lag the recovery as companies wait, hold back and make sure the recovery is for real, so that’s why we’re stressing the importance of exports as the area of demand that we think is the best contender to really take the recovery.”

The vast majority of companies in Yorkshire and North Linconshire do not sell their goods or services overseas, according to the latest Close Brothers Business Barometer. Ninety four per cent of local businesses polled in the quarterly survey of small and medium-sized enterprises, SMEs, across the UK, said they did not export.

The main reasons provided for not pursuing opportunities abroad were cash flow concerns and that businesses think they have nothing to export.

“SMEs must be more active in seeking and exploiting opportunities overseas. Even companies that are well positioned to export often do not,” said Mike Randall, CEO of Close Brothers Asset Finance.

“We need to understand the barriers – perceived or otherwise, take measures to lower those barriers for local businesses, and make exporting a possibility for them once again.” Meanwhile, Capital Economics recently predicted that Yorkshire’s future prosperity rests on support services and the professions as manufacturing and financial services dwindle over the decade.

The research, carried out for the Yorkshire Post, predicts Yorkshire’s manufacturing workforce will shrink from 265,000 this year to 231,000 in 2020 because the region’s factories have failed to specialise in the out-performing automotive and aerospace sec- tors.

Mr Fenton said: “Manufacturing sector accounts for 15 per cent of the West Yorkshire economy compared to just 11 per cent for the UK as a whole so it’s even more important in terms of looking at the performance of the manufacturing sector in West Yorkshire given that the sector is somewhat more prominent than this part of the world.”

Asked about the economic picture in Yorkshire in comparison to the rest of the UK, Mr Fenton said: “We are probably seeing a recovery taking hold in Yorkshire and the Humber as well, albeit some analysis we’ve done does suggest that Yorkshire and the Humber isn’t quite as competitive as some other regions in the UK economy which might at the margin have shaded it down ever so slightly, but it is overwhelmingly quite a positive story.”

During a visit to Hull and Leeds recently, he said he received positive feedback from customers.

“I was pleased to discover when I was speaking with customers in Hull and in Leeds that what they were seeing matched what we were seeing in the data which is that things are a lot better than they were six months ago, and an awful lot better than they were 12 months ago,” said Mr Fenton.

Region in front on global path

EXPORTS from Yorkshire and the Humber climbed to a value of £4.43bn in the last quarter, up 4.5 per cent on the previous three months and boosted by the Asian and North American markets.

The figure for the three months to the end of June was up from £4.24bn for the first quarter of the year and up from £3.93bn for the same period last year.

The statistics from HM Revenue & Customs show that machinery and transport equipment, mineral fuels and chemicals are the key export commodities for Yorkshire and the Humber, with America, Germany and Holland the region’s top three export partners. Yorkshire and the Humber was the only northern region to show second quarter growth.

Local Farm Shows

Despite the fact that British Farming has been undergoing hard times today, however it’s not all doom and gloom!

It’s not new news that agricultural shows are big business in the UK! It’s a great way to celebrate what’s great about the farming community, British Farming and the ‘rural way of life’. Around six million visitors head to farm and country shows in the UK each year, which equates to 10% of the British population.


There is a wide range of different events on offer, including county shows, royal shows, agricultural shows, equine displays and horticultural events – with many combining a range of different attractions. Most shows will have a large number of exhibitors, which will include local farms and businesses that are keen to show off their produce, herds, goods or services.

It’s a great way to get involved in the local farming community in your area, have a great day out with the family and to buy some locally sourced goods too. The shows can also be a great way for farm businesses to pick up new customers and increase market awareness.


As well as exhibitions there will typically be competitions, such as show jumping, vintage-tractor displays, dog agility competitions, produce competitions, flower and horticultural prizes and more. Some agricultural shows will also have prizes relating to food, baking and locally produced cider, beer or wine, so there really is a great deal of diversity and something for everyone.

If you, farmers can enter and win at one of these competitions, it’s a great way of getting your farm brand known to the wider public and generating some free publicity, especially as the shows are often very well covered by local press and specialist publications. This wider marketing of your farm can only server to improve your farm finances.

What’s On Next Year

If you’re considering exhibiting in next year’s shows, then a good starting point to finding out what’s on and available, you’re bound to find something local to you. Follow the link –

Global sheep market requires confidence, says NFU

The global sheep market requires more confidence for the long term, according to NFU livestock board chairman Charles Sercombe. Sercombe, who also chairs the European Commission Advisory Group on Sheepmeat, is due to address livestock producers from around the world at the International Sheepmeat Forum in Brussels. The sheep industry has faced a challenging 12 months both in the UK and in many other countries.

“Last year’s devastating marketing season had a huge effect on our members’ businesses and many farms are still feeling the effects.“It is apparent that many of the issues facing sheep farmers are the same the world over. On the recent sheep industry mission to New Zealand, I met farmers who have faced similar issues as we do in the UK due to sustained poor prices and we discussed the negative impact price volatility is having for sheepmeat producers wherever they farm.

“However, I do believe we are turning the corner. Producer confidence has dipped but all the ingredients are there for a successful season. There will be less lamb on global markets and we’re seeing increased demand for lamb, especially from China.

“It’s vital that a change in attitude throughout the whole supply chain takes place. Now is the season that our farmers should be seeing the lamb market strengthen and British farmers expect agriculture’s biggest customers, the supermarkets, to be fully behind British lamb and working to help create a dynamic, vibrant sheep industry for the future.

”The National Sheep Association chief executive requested an ‘urgent’ face-to-face meeting with Tesco chief Philip Clarke after comments made by customer service representatives for the retailer said UK lamb ‘was not in season’ at the peak of domestic production.

And the NFU, as part of its regular Shelfwatch examination of supermarket shelves, said it found the level of imported lamb in Tesco and Asda stores as a ‘major disappointment.’

Financial firms’ optimism at new highs, says CBI

Optimism among UK banks and financial firms is at its highest for almost 17 years, a survey from the CBI business lobby group has suggested.

Its quarterly survey, carried out with PricewaterhouseCoopers, found 59% of firms said they felt more optimistic, against 6% who were less optimistic. The balance, of 53%, is the highest since December 1996. The survey also found 24% of firms in the sector had increased staff numbers, the biggest rise in six years. The CBI/PwC survey of 99 companies covered the three months to the start of September

The study estimates that 10,000 jobs were added in the period studied, with another 2,000 expected to be created in the current quarter, taking total employment in the sector to 1.14 million.

The one negative point came from business volumes, which the survey indicated had fallen in the latest quarter. Some 22% of firms reported a rise in business volumes, but 32% said they had fallen.
Kevin Burrowes, from PwC’s UK financial services division, said: “Banks’ optimism is increasingly buoyant despite seeing a slight seasonal blip in commercial and industrial volumes.

“Activity and profitability are expected to grow as the economy recovers, and investment in new products and infrastructure is increasing.”