However, since the figures actually show some growth, small though it might be, the Treasury has said that it will continue with its deficit-cutting measures.
A Treasury spokesperson said: "While the UK cannot insulate itself from what is happening to our major trading partners, with financial turbulence in the eurozone and a weaker outlook for global growth, the economy is still growing and this week's survey data for the manufacturing and service sectors are consistent with continued expansion."
Critics point to past figures, however, and given the 0.5 per cent contraction in the final three months of 2010, the new figures actually reveal that the economy has remained static for the past nine months.
Ed Balls, the shadow Chancellor, said: "These deeply concerning figures show the British economy has stagnated since the autumn of last year, well before the eurozone crisis... They show things are even worse than we thought."
Alan Clarke at Scotia Capital said: “What we believe is of more significance, not least for monetary policy, is where GDP growth has been over the last year and where it is going from here. The Bank had banked on some chunky upward revisions to the last year or so and what we have got is the opposite – slight downward revisions!
Some analysts now believe that the pressure is on the Bank of England to back calls for another stimulus into the economy, which could well mean further quantitative easing. Others think that the Bank will hold on until after the publication of third quarter GDP data later this month.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 148 )For the first time since the survey began 12 years ago, stress is the most common cause of long-term sickness absence for employees, according to this year’s Chartered Institute of Personnel and Development (CIPD) Simplyhealth Absence Management survey.
Apparently most of the stress is caused by worries about job losses, with particularly acute stress levels in the public sector, where half of employers reported an increase in stress-related absence over the past year.
Other causes of stress are tougher workloads, having a ‘bad’ boss and money worries leading to problems at home. All these add to a “vicious circle” of workers’ woes according to the survey.
However, the report praised many workplaces for increasing their focus on worker wellbeing despite squeezed budgets. Counselling services were being offered by almost three-quarters of the 592 employers surveyed.
But CIPD adviser Jill Miller seized on evidence of the downturn's repercussions for mental health to urge employers to do more to reassure nervous staff.
"Stress is a particular challenge in the public sector where the sheer amount of major change and restructuring would appear to be the root cause," she said.
For manual workers stress is now level with acute medical conditions as a cause of absence and has overtaken musculoskeletal problems to become the main cause of long-term absence.
UK employers estimate that they lose an average £673 per employee per year because of time away from work for reasons ranging from serious illness to stress and family responsibilities, according to the report.
David Frost, the former head of the British Chambers of Commerce, is leading a review for the Government on what the country can do to reduce absence rates. The review was commissioned as part of the Government’s drive to create the right conditions for economic growth.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 132 )According to a survey conducted by PwC, B2B companies know that they need a social media strategy but are not spending their money in the right places, effectively wasting millions.
Despite investing financially in social media, to the tune of over £1m, fewer than 12 per cent of the companies surveyed have full time social media teams in place and those that do are not backing this up with clear strategies to their staff on how to use it.
Sean Mahdi, director in PwC’s digtal transformation group, says that B2B companies should follow the example of B2C companies, which are using social media much more effectively and profitably.
"The results of our survey demonstrate that, although B2B is investing in social media, they appear to be doing so with limited strategies that don’t fully exploit social media in the way that B2C is doing, There is evidence that sectors you might expect to be proficient in this area such as Technology and Entertainment and Media have much better tools and processes in place, but the majority of B2B organisations have much work to do to effectively use this 'new' medium to interact with their clients and customers."
The report also discusses how social media can be used not only to drive sales but also to create brand loyalty and a two-way channel of communication between the business and its customers.
"As embracing social media represents a significant change to the way in which many organisations interact with their customers, a social media strategy is essential. Becoming a social business requires insight ... about your customers, about what your brand stands for; and about the additional value that you can provide your customers through social media engagement," Mahdi added.
However, some of the more cautious business advisers criticise the use of social media as a strategy to drive sales because of its lack of accountability.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 129 )In a speech to the Conservative conference, Chancellor George Osborne said solving the eurozone crisis remains the most important aspect of restoring growth in the UK economy.
Mr Osborne has been under pressure from Labour to cut VAT in order to put some money back into the economy, and senior Conservative figures are urging him to axe the 50p top rate of income tax.
However, the Chancellor said it would be wrong to borrow money to fund temporary tax cuts or to increase public spending.
In his speech, Mr Osborne said he had explored “every single option” to boost economic growth in the UK but said that "borrowing too much is the cause of Britain's problems, not the solution".
He said: "We would be risking our nation's credit rating for a few billion pounds more, when that amount is dwarfed by the scale and power of the daily flows of money in the international bond markets, swirling around ready to pick off the next country.
"We will not take that risk. We are in a debt crisis, it is not like a normal recovery. You can't borrow your way out of debt."
Mr Osborne said that UK finances were still tight and that he would be sticking with his deficit reduction plan.
In his speech, he also announced the Treasury would undertake “credit easing”, which would see the cost of borrowing being cut for struggling businesses, and improving access to loans.
He said the Government is helping businesses by keeping interest rates low, which he described as being "the most powerful stimulus that exists".
However, the Chancellor has found £805 million to enable council tax to be freezed in England from 2012-13. This will save £72 a year for UK households.
He said: "I'm a believer in tax cuts - permanent tax cuts paid for by sound public finances.
"Right now, temporary tax cuts or more spending are two sides of exactly the same coin, a coin that has to be borrowed - more debt that has to be paid off."
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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( 3 / 153 )New legislation coming into force on Saturday will see agency workers gaining additional rights in pay and benefits.
Agency workers will be entitled to similar rights to permanent staff, as of October 1, after they have completed 12 weeks of service in a temporary job role.
These include pay, overtime, shift allowances, holiday pay and bonuses attributable to individual performance, as well as maternity rights.
The rules are being brought in after long negotiations between unions and the Government.
Stefan Martin, an employment lawyer with law firm Allen & Overy, said: "It won't give them equal rights in terms of protection from dismissal."
"What it is going to give them is equal rights in relation to pay and other basic employment rights.
"It's going to be extra basic pay, [and] extra shift allowances potentially, where those workers are not paid at the same level as the equivalent permanent employee.”
Various legal protections are already in place for agency workers, which include the minimum wage and basic holiday rights. However, under the new European rules, agency workers will also be entitled to the use of the same facilities as staff.
From the first day of employment, they can use a creche, canteen or transport services. They will also be entitled to information about internal vacancies at the company they are working for, and to be given the opportunity to apply for them.
Business groups suggest the new rules will cost firms up to £2bn a year, with concern that the new legislation will lead to more red tape for already struggling small firms who depend on agency workers.
There have also been fears that some agency workers will simply be laid-off after 11 weeks so they do not benefit from the increased rights.
Agency workers, however, will not be entitled to all the same benefits, such as occupational sick pay, redundancy pay and health insurance.
"For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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