The implosion of the News of the World and News International may be grabbing all the headlines, but nestled underneath is news that the UK economy has posted another quarter of low growth. A harbinger of doom or a step in the right direction? Less contentious is the call by small businesses for more state support.
The UK economy grew by 0.1% for the second quarter of 2011 according to the National Institute of Economic and Social Research. Clearly, such performance is no cause for celebration, but it seems equally churlish to use the figures as a reason to forecast doom and despair. The British Chambers of Commerce has said that the performance is positive overall, pointing to fewer working days over the three-month period and modest improvement in the services and manufacturing sectors.
Nevertheless, the economy is still weak, a fact underlined by a recent report from the financial sector that recorded a sharp rise in the number of SMEs calling for more state support for coping in these austere times. A reduction in VAT and a simplification of lending criteria were the most popular requests.
Given the economic go slow, giving the SME sector a boost would be a timely move but, at the same time, it is important that these companies do as much as they can independently in terms of maintaining cash flow. Invoice finance, including invoice discounting and factoring, and asset finance are two ways the sector can be more proactive.
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