February has been a mixed bag for the financial and business sector, with record highs predicted on the stock market juxtaposed with sales slumps on the High Street. And as always, George Osborne warns the British public not to get too comfortable in our big boy boots.
Hopes of wage growth return as inflation hits four year low
Inflation dropped last month to the lowest rate since 2010, with the Consumer Price Index (CPI) growing by 1.9%. Economists say this is laying the way for the return of real wage growth later this year.
Workers' pay is currently still low but economists hope this will change and wages will continue to grow throughout the year. The fall in inflation has also taken pressure off the Bank of England’s Monetary Policy Committee to begin hiking interest rates.
Economic recovery “not yet secure”
Don’t get too excited, this is England after all. Despite rising growth and falling unemployment and inflation figures, the British economy remains vulnerable to economic turmoil around the world.
The Chancellor, George Osborne, has made it clear that he will not loosen the nation’s purse strings in the up and coming budget. He warned the economy is neither balanced nor sustainable and it is now integral to continue with caution. Nonetheless, Britain is currently leading the economic recovery in Europe.
UK retail sales slump
Retail sales in January fell by 1.5% from December, according to figures released by the Office for National Statistics (ONS).
The fall was greater than expected, regardless of the normal post-Christmas dip. However, the figures were up compared to last year, with sales growing an extra 4.3%. Household goods were the consumer’s choice, with an annual sales increase of 9.8% - the strongest rate since July 2007.
FTSE 100 hit 14 year high
London’s index of leading shares - the top 100 companies listed on the Stock Exchange - hit a 14 year high towards the end of the month and shows promise to continue rising.
Economists predict the FTSE 100 will hit 7000 points in the next few months, a record high that has enthused confidence in market investors. The index has been elevated by a £49bn cash-and-share payout from Vodafone going directly into investors’ pockets.
Companies are also feeling the benefit of the improving market confidence, with a ‘flurry’ of share sales over the recent months. The renewed confidence in business investment could also have a positive effect on small businesses and startups who rely heavily on shareholders and financial investment.
Female business ownership on the High Street doubles
Women are going full speed ahead in business this year, with female entrepreneurs doing more for the recovery of the British High Street than ever before.
These statistics were released by the Federation of Small business who, when their members were last surveyed some 20 years ago, found around 24% of High Street businesses (such as retail, hotels and leisure firms) were primarily owned by women. However an updated study has found that roughly half (49.5%) of new businesses in the same sectors are now owned by women – meaning the number of female-owned businesses on the High Street has more than doubled since 1994.
The study also found that women are less likely to take financial risks when setting up their new enterprise, on average borrowing £10,000 less than their male counterparts.
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