It seems such a short time ago that people who invested all of their money in the stock market were regarded as being "risqué," and those who kept their money in the bank in short and long term deposit accounts were described as being "sensible". Well that role has certainly been reversed over the last crazy year or so, when the financial world turned upside down for so many.

Nowadays people who still have money on deposit at the bank are regarded as being some form of masochists, and no less than the banks themselves. With interest rates seemingly stuck forever on 0.5%, money left in a bank account is not only gathering dust, it is also paying for the privilege. On the other hand, the FTSE can almost do no wrong. And it has been that way for more than half a year, when the first indications that the global economic downturn might not last forever began to look evident. Sufficient to say that, the FTSE 100 rose by 21% in the third quarter of 2009, and 45% since March the highest percentage rises since the exchange was created in 1983. At current interest levels, investors would have to leave their money in the bank for around 7 years to earn that kind of return on their investment.

Leading economists argue that by trying to jump start the economy, the UK government has damaged national growth for the foreseeable future, with the only way that the situation can be reversed is to put an end to the stimulus passage and increase interest rates. They go on to suggest that as soon as the government does increase interest rates, only then will the stock market boom begin to fizzle out. That will be the time for the smart investor to release their equity exposure and return most if not all their capital to their bank account and earn some reasonable interest. Like the good old days.

financial

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Tags: Bank Account, Banking, British Economy, British Pound, Credit Crunch, Currency, Economic Downturn, Economics, Economy, Financial News, FTSE, Global Credit Crisis, Interest Rates, Investment, Money, Money Management, Recession, Savings, stimulus passage, stock market, Stock Markets, Stocks and shares, UK Banks, UK Banks, UK Economy, UK government, UK Recession

As the dust finally begins to settle on what has been the UK’s toughest recession since World War Two, facts and figures show that the epi-center of London chic survived and possibly even prospered while High Street shopping not only in Britain but around the World took a major dive.

According to a recent comprehensive survey of the world’s top shopping areas, London’s most expensive shopping streets have not only withstood the economic downturn better than almost all other rivals, but have emerged form it in very good shape.

Some of the highly exclusive retail stores situated in New Bond Street were happily absorbing rental increase of around 7 per cent in the year ending June 2008, one of the worst years in shopping history. At the same time sharp decreases in rental income were reported on many of the other famous centres of shopping for the privileged, with no less than New York’s Fifth Avenue featuring pretty high up on the list.

Property consultants speak in hallowed tones of the continued attraction of the West End of London for local and international shoppers. An attraction that made sure that rents remained resilient despite weakness in the rest of the UK.

In general, UK’s high street property income has witnessed a decline of 2.4 per cent during the year ending June. 2009

Despite the downturn in the economy and the retail sector in general, London’s West End continues to perform well and rental outlets remain almost impossible to find in such famous shopping institutions as Oxford Street, Regent Street and New Bond Street.

During the last six months, several internationally recognized retailers have opened their doors in Central London, among them the Sting, Pull and Bear, Missoni, Anthropologie, Kronometry and True Religion.

Despite London’s rises to supremacy as a key shopping centre for the rich and famous, Fifth Avenue remains the world’s most expensive street, where retailers can expect to pay an annual £1,000 per sq ft per year. Paris’s Avenue des Champs-Elysées remains Europe’s most expensive retail address, while Hong Kong’s Causeway Bay the most expensive in the Asia Pacific region.

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Tags: Anthropologie, Avenue des Champs-Elys, British Economy, British Pound, Causeway Bay, Credit Crunch, Economic Downturn, Economics, Economy, Fifth Avenue, Financial News, Global Credit Crisis, High Street shopping, Kronometry, Missoni, Money, New Bond Street, Oxford Street, Pull and Bear, Recession, Regent Street, Retail, Sting, True Religion, UK Banks, UK Economy, UK Recession, West End

How will small businesses make their payrolls if the credit crunch persists? This is the nightmare scenario facing many small businesses. The standard response you get from small business people is that “we always make our payroll, even if we don’t pay our suppliers”. The trouble with this thinking at a time like this is that everyone is thinking the same thing. Suppliers may not be getting paid as the firms further down the supply chain start to hoard cash to pay their own staff should things get just a little tighter. Once a firm at the bottom of the supply chain goes bust, the result cascades up the supply chain and could set off a chain reaction.

How does the government avoid this catastrophe? Simple…they bail everyone out…or they do nothing. My gut reaction is that they will do nothing. As banks pull 20 year old credit lines left and right, smaller firms, who in less tough times could have got a loan from the bank secured on their property are really struggling to avoid closing the doors for the last time.

Business groups called on the Conservatives to announce more radical policies to deal with the deteriorating economic environment. Miles Templeman, director general of the Institute of Directors said: “Both measures would give small businesses a boost during the economic downturn. However, they do not go far enough, and we hope that more ambitious plans will emerge in the near future.”

Liberal Democrat Treasury spokesman Vince Cable said: “My own preference would be that, if there’s room for tax cuts, to give ordinary people their own money back.

How many will go isn’t clear right now, but the unhappy fact is that many in the homebuilding sector have gone already and many more in the real economy look set to go bust unless some remedy is found. If the UK loses its small business base, the seeds of tomorrows multinational companies, then it’s isn’t just a recession or a depression, it’s a tragedy that could take a generation to fix.

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Tags: Credit, Credit Crunch, Economic Downturn, Economic Environment, Homebuilding, Miles Templeman, Recession, Small Businesses, UK Banks, Vince Cable