Paper Summary: 17th December 2013

Economics

The number of active small businesses in the UK has reached a six year high. With 2.61 million small businesses trading in the UK, bringing the number of active SMEs back to pre-recession levels. The latest SME Growth Monitor – from the National Association of Commercial Finance Brokers (or NACFB) – found that over 86,000 small firms have started trading since 2011. This more than makes up for the just under 81,000 firms that stopped trading between 2008 and 2011.

Personal Finance

Those currently in their 40s will be the first generation to be worse off than their parents in retirement, according to a report published today by the Institute for Fiscal Studies (or IFS). Since the second world war, steady economic growth meant each generation had higher incomes and living standards than the one before. However those born in the 1960s and 1970s are less likely to own their own home than previous generations, and are now receiving the same take-home pay as those born ten years before them. Interestingly, the difference in retirement income comes partly from a lack of saving by the younger generations earlier in careers.

Property

Housebuilders have hit back at Ed Miliband’s critism of the industry yesterday. In a speech yesterday Miliband accused the biggest builders of making supernormal profits, citing an increase in their earnings of 557% over the three years since 2010. However, Peter Redfern, chief executive of Taylor Wimpey, said this particular figure for the percentage rise in earnings was “meaningless” because it was based on a comparison at “a point in the industry when many were loss-making.” John Stewart of the Home Builders Federation claimed that for builders “there is a strong financial incentive to start on site as soon as they get an implementable planning permission.” Meanwhile, the Financial Times cites official reports commissioned in 2004 and 2008 that found “no evidence of significant land speculation”

In line with recent reports from across the political arena, Ed Miliband wants to bring house building in Britain to 200,000 homes per year – a level not seen for a quarter of a century.

Recruitment

For the first time since the economic crisis, the majority of firms in the UK now say they plan to take on more staff over the next year. According to the Confederation of British Industry (CBI) 51% of employers plan to hire more staff over the next twelve months. At its lowest point in 2009 the same measure fell to only 22% of employers. The CBI report was also promising on wages, finding 42% of workers now expect to match inflation.

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