1% rate rise 'risk' to small firms

The Bank of England is expected to raise rates within months

The Bank of England is expected to raise rates within months

First published in National News © by

A rise in interest rates to 1.5% is likely to throw 218,000 small businesses into serious financial trouble, a survey said.

The Begbies Traynor Red Flag Alert, which looks at the financial health of UK companies, said a 1% rise in the base rate by the Bank of England would hit thousands of small firms because many of these businesses still carry heavy debts taken on during the recession.

It added that the number of companies that moved into "significant distress" rose by 60,000 in the third quarter of the year to 237,000, the third quarterly rise for firms in this category.

Expectations of a rate rise from its historic 0.5% low have been brought forward to this year, or early in 2015, due to stronger UK economic data.

Significant distress at larger companies fell 9% to 19,507 over the same period, due to easier access to bank or other market funding.

Begbies Traynor chairman Ric Traynor said: "While low interest rates and creditor forbearance continue to ensure that businesses are kept off the critical list, you just need to scratch beneath the surface to see clear signs of a twin track economy.

"While larger corporates have taken full advantage of the market opportunities available to them, a growing number of SMEs are overtrading and risk falling at the last hurdle."

However, the report did find that firms on its more serious "critical distress" list have fallen by 9% over the last year to 2,745, the ninth consecutive quarter of year on year improvement in this category.

Begbies Traynor partner Julie Palmer said: "Access to funding is still a major issue for a huge number of UK small and medium sized businesses.

"Although traditional bank finance is now widely available for those firms fortunate enough to comply with mainstream lending criteria, it remains a different story for businesses in complex or challenged circumstances."

Comments (1)

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9:52pm Fri 18 Jul 14

welshmen says...

Probably this could be the answer to our Countries ever growing debt, I pasted this.

A new concept has come to light within Nationalist banking circles that would eliminate the need for personal income tax by taxing, in the same way as VAT does today, all business transactions at source.

The idea offers to circumvent all the tortuous reforms within the banking and financial establishment that we require, as Nationalists, to rebalance the nation's financial circumstances.

A government supervised National Clearing Bank (NCB) would mean all current financial, investment and insurance services could remain intact and unchanged. The only provisor would be that to continue operating, just as with any other business with the UK, all their financial dealings would be obliged to pass through the nation's clearing bank, if they wanted to operate within the UK.

Even the Bank of England could remain as it is with its private shareholders and right to issue IOU notes as currency, providing, of course, they do all their business openly through the NCB.

Having this National Clearing Bank through which every legal financial activity must pass ensures that the government has the ability to observe, understand and control the nation's trading position first hand, without interference from a third party and according to Nationalist business protocol.

The NCB can control the flow of money throughout the whole nation, subtract tax at source, create and issue debt free currency, and define the form of currency acceptable for taxes. This allows for the gradual replacement, perhaps over two or three years, of old interest charged money for new debt free government issue currency.

The NCB could then instigate and operate Maynard Keynes' "bancor" trading system, so favoured by China and other BRICS and non-aligned countries, which obviates a need for a reserve currency, debilitating exchange rates, or the obligation to operate through the Bank for International Settlement.

"Bancor" is an international trading system which is a form of credit between one nation and another. This allows nations to trade securely outside the control of private banks on behalf of major companies. This will reduce trading costs and increase security and goodwill amongst trading partners.

Information provided by the NCB means that weak areas of the economy can be quickly observed by government. Any required injection of the nation's debt free currency to invest in new infrastructure, capital equipment or aid a local community suffering from a business failure, can be actioned quickly.

The idea of a National Clearing Bank comes from observing the effectiveness of the European Coal and Steel Community (ECSC) established in 1952. It changed the face of Europe for ever by taking absolute control of all coal and steel production in West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg.

The ECSC had the right to control prices, channel investment, raise funds through a tax on sales, and allocate coal and steel to which ever company it chose. Its decisions were binding and could not be contested by an individual nation.

Gradually, just as happened with the ECSC, financial and business institutions within Britain as well as those without, who wish to trade with us, would be obliged to operate according to British Nationalist thinking and ideas.

The national government would operate a financial monopoly just as the ECSC did in Europe. In the same way as the ECSC irrevocably changed western nations and their trading habits, so too the NCB would change Britain and her trading partners in to Nationalist compliant operators.

This way, the argument goes, Nationalists can ease out unacceptable forms of business, such as pay day loan sharks like Wonga or inefficient inflationary quantitative easing by the Bank of England. International investments can be fully monitored and absentee landlords and foreign ownership of British companies discouraged.

Ultimately the NCB could operate its own debit and credit cards through the nation's clearing bank. Authorised appointed agents would be licenced to issue card facilities such as high street banks, larger retailers or even national charities. This would allow us to operate the nation's finances outside the control of US and Zionist controlled banks.

Unfortunately, while this new idea seems on the surface to offer all the answers to our nation's banking problems, it does have a lot of drawbacks. The most obvious of which is does it give government too much power?

While the possibility of eliminating income tax altogether does seem possible, would the actual outcome be to stifle business with too much red tape and act as a brake on investment?

Would the international banking community be prepared to do business with a government controlled clearing bank, since most clearing banks throughout the world are privately controlled?

Despite the elimination of personal income tax because there is no national debt to pay on government debt free currency, would the people, the electorate, have confidence in a clearing bank owned by the nation as opposed to privately owned clearing banks?

Change of government after elections would inevitably mean that monetary policy would change every few years. The result might destabilise the nation's currency if in the hands of politicians alone. Would this cause worse financial crises than we already suffer?

While at first sight the idea of a British government owned National Clearing Bank seems to answer all our current problems, and as one observer recently commented it is "very radical and elegantly simple", it is clear it also has as many negatives, if not more, than just tinkering with the present system.
Probably this could be the answer to our Countries ever growing debt, I pasted this. A new concept has come to light within Nationalist banking circles that would eliminate the need for personal income tax by taxing, in the same way as VAT does today, all business transactions at source. The idea offers to circumvent all the tortuous reforms within the banking and financial establishment that we require, as Nationalists, to rebalance the nation's financial circumstances. A government supervised National Clearing Bank (NCB) would mean all current financial, investment and insurance services could remain intact and unchanged. The only provisor would be that to continue operating, just as with any other business with the UK, all their financial dealings would be obliged to pass through the nation's clearing bank, if they wanted to operate within the UK. Even the Bank of England could remain as it is with its private shareholders and right to issue IOU notes as currency, providing, of course, they do all their business openly through the NCB. Having this National Clearing Bank through which every legal financial activity must pass ensures that the government has the ability to observe, understand and control the nation's trading position first hand, without interference from a third party and according to Nationalist business protocol. The NCB can control the flow of money throughout the whole nation, subtract tax at source, create and issue debt free currency, and define the form of currency acceptable for taxes. This allows for the gradual replacement, perhaps over two or three years, of old interest charged money for new debt free government issue currency. The NCB could then instigate and operate Maynard Keynes' "bancor" trading system, so favoured by China and other BRICS and non-aligned countries, which obviates a need for a reserve currency, debilitating exchange rates, or the obligation to operate through the Bank for International Settlement. "Bancor" is an international trading system which is a form of credit between one nation and another. This allows nations to trade securely outside the control of private banks on behalf of major companies. This will reduce trading costs and increase security and goodwill amongst trading partners. Information provided by the NCB means that weak areas of the economy can be quickly observed by government. Any required injection of the nation's debt free currency to invest in new infrastructure, capital equipment or aid a local community suffering from a business failure, can be actioned quickly. The idea of a National Clearing Bank comes from observing the effectiveness of the European Coal and Steel Community (ECSC) established in 1952. It changed the face of Europe for ever by taking absolute control of all coal and steel production in West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg. The ECSC had the right to control prices, channel investment, raise funds through a tax on sales, and allocate coal and steel to which ever company it chose. Its decisions were binding and could not be contested by an individual nation. Gradually, just as happened with the ECSC, financial and business institutions within Britain as well as those without, who wish to trade with us, would be obliged to operate according to British Nationalist thinking and ideas. The national government would operate a financial monopoly just as the ECSC did in Europe. In the same way as the ECSC irrevocably changed western nations and their trading habits, so too the NCB would change Britain and her trading partners in to Nationalist compliant operators. This way, the argument goes, Nationalists can ease out unacceptable forms of business, such as pay day loan sharks like Wonga or inefficient inflationary quantitative easing by the Bank of England. International investments can be fully monitored and absentee landlords and foreign ownership of British companies discouraged. Ultimately the NCB could operate its own debit and credit cards through the nation's clearing bank. Authorised appointed agents would be licenced to issue card facilities such as high street banks, larger retailers or even national charities. This would allow us to operate the nation's finances outside the control of US and Zionist controlled banks. Unfortunately, while this new idea seems on the surface to offer all the answers to our nation's banking problems, it does have a lot of drawbacks. The most obvious of which is does it give government too much power? While the possibility of eliminating income tax altogether does seem possible, would the actual outcome be to stifle business with too much red tape and act as a brake on investment? Would the international banking community be prepared to do business with a government controlled clearing bank, since most clearing banks throughout the world are privately controlled? Despite the elimination of personal income tax because there is no national debt to pay on government debt free currency, would the people, the electorate, have confidence in a clearing bank owned by the nation as opposed to privately owned clearing banks? Change of government after elections would inevitably mean that monetary policy would change every few years. The result might destabilise the nation's currency if in the hands of politicians alone. Would this cause worse financial crises than we already suffer? While at first sight the idea of a British government owned National Clearing Bank seems to answer all our current problems, and as one observer recently commented it is "very radical and elegantly simple", it is clear it also has as many negatives, if not more, than just tinkering with the present system. welshmen
  • Score: 1
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