April 2016 Credit Management magazine

NEWS IN BRIEF
ACCOUNTING BODY WARNS OF
STORMY SEAS AHEAD
UK companies are predicted to invest
less this year than in previous years,
threatening the Chancellor’s plans to
rebalance the budget by 2020, according
to the latest Economic Forecast from
the Institute of Chartered Accountants in
England and Wales (ICAEW).
Fragile business confidence means
investment growth is expected to fall from
6.4 percent in 2015 to 5.2 percent this
year, despite strong financial positions,
adding another ingredient to the cocktail
of risks for George Osborne who wants
to move the UK away from domestic
consumption and credit.
The ICAEW is downgrading its
economic forecast from 2.2 percent in
2015 to 2.0 percent this year, due to
declining business confidence, volatile
global financial markets and a fall in
capital spending growth.
Businesses have weaker motivations
to invest due to their growing uncertainty
on the economy. Both the forthcoming
referendum on the UK’s membership of the
EU and the recent turbulence in financial
markets have contributed to the uncertain
outlook.
After a hiatus in summer 2015, the
labour market is showing strong job
creation. ICAEW expects employment
growth to slow, but the unemployment
rate is forecast to fall further to 5.0 percent
in 2016.
Pay growth also appears to have
plateaued. The introduction of the National
Living Wage will offer some support for
those on low incomes, but more broadly
the ICAEW expects earnings to grow
by 2.8 percent in 2016, at a similar pace
to last year.
Exporters will benefit from the recent
depreciation of the pound and an improved
performance in US and European markets.
But growth is skewed by concerns about
China and emerging markets.
Michael Izza, ICAEW Chief Executive,
says the economy has been too reliant
on the mini-consumer boom: “The
boost to spending power enjoyed by
consumers last year will steadily fade as
inflation gradually picks up, while faltering
confidence means that growth in business
investment is also likely to cool.
“George Osborne will be forced to
adjust his borrowing targets, cut spending
further or raise taxes to fix the nation’s
finances. It is evidently becoming a three-
Parliament problem.”
icaew.com
DUTCH COURAGE
AFTER 14 years at 1st Credit, co-founder
and Business Development Director Charles
Holland has decided to retire. He will continue
to work with the business on a part-time
consultancy basis for specific projects.
Eddie Nott, CEO of 1st Credit, said that
Charles has had a profound impact on the
business: “Well known in the industry, he
will be greatly missed. We are delighted
that he has agreed to help us in a parttime
consultancy capacity as he starts his
retirement.” In other news, Chief Financial
Officer Simon Dighton has also decided to
leave and will be replaced by Bruce McLaren,
who will retain his responsibilities as Chief
Investment Officer. Client Relationship
Director Ian Davies, who joined 1st Credit in
2003, has been promoted to the role of Sales
Director and will assume responsibility for the
company’s client relationships. 1stcredit.com
PRINCIPAL BENEFIT
STUDYING for CICM qualifications means
you are eligible to apply for an NUS Extra
card. The cost is £12 for one year (that’s £1 a
month) from the date of purchase. The card
is also available for two or three years. You
can apply for a card if you are studying at a
teaching centre, virtual classroom or via one
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the CICM. Visit nus.org.uk and register online.
SURVEY WINNER
Congratulations to Jodie Foster ACICM,
winner of the CICM Membership Survey prize
draw. The princely sum of £250 is on its way
to you to spend wisely.
VULNERABILITY TASKFORCE ESTABLISHES
NEW GOLD STANDARD
WHAT has been described as the first ever
financial services Vulnerability Taskforce
has published a report outlining best
practice recommendations for the industry
as it aims to improve the experiences and
outcomes of customers with challenging
personal circumstances.
Ensuring that customers who are
vulnerable are treated not only fairly but
also with empathy and sensitivity to their
circumstances is a growing priority. The
Taskforce, which brings the financial
services industry together with charities
and consumer groups, has outlined steps
designed to build on the work already
undertaken by many institutions.
Chief Executive of the Money Advice
Trust, Joanna Elson OBE, who chaired the
Taskforce, says this issue has never been
higher on the agenda:
“This report, which builds on and
amplifies the Financial Conduct Authority’s
Occasional Paper on vulnerability last
year, represents a significant step
forward in improving the experience of all
customers, no matter what their personal
circumstances.
“The real test of the Taskforce’s work,
of course, will be whether customers
who are vulnerable begin to experience
improvements in the everyday service
they receive – whether they are accessing
a current account, managing a loan or
making any other interaction with financial
service providers of all kinds. I have every
confidence that firms will rise to this
challenge, and that real results on the
ground will follow.”
moneyadvicetrust.org
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