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Top story
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Interest rates could fall to zero
As the Bank of England today moved to reduce UK interest rates to 1 per cent from 1.5 per cent, experts in the North West were predicting that rates could reach zero this year. “Markets were expecting a 50 basis point cut, and will be relieved to have got it,” said Simon Allport, senior partner at Ernst & Young. “The economy is in a deep recession and further interest rate cuts may be on the cards. We expect interest rates have further to fall – possibly to zero.” And Patrick Loftus, practice senior partner at Deloitte in the North West, said: “The MPC needs to take unprecedented action and we could well see 0 per cent interest rates this year. At these levels, there is growing unease for savers. Whether this will encourage savers to start to invest in other assets – in particular, property – remains to be seen. Confidence is still probably too low to expect an immediate change in investment sentiment.”
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Deals
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Bank announces SME funding
NatWest and The Royal Bank of Scotland (RBS) are set to make an extra £250m of funding available to small and medium-sized businesses in the North West this year, to be delivered through a locally administered package of funding choices from today. As well as providing traditional debt finance, the new funds will offer businesses the opportunity to access other avenues available to help them manage their capital and cashflow through the current economic downturn. Bill Ratcliffe, managing director of NatWest and RBS Business and Commercial Banking in the North West, said: “Small and medium-sized businesses are the driving force behind the region’s economy. The new regional fund shows our commitment to continue to support and reassure North West businesses.”
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Business
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Toll freeze on Merseytravel agenda
Merseyside’s Passenger Transport Authority will this afternoon discuss freezing tolls in the Mersey tunnels as businesses and commuters look to cut costs wherever possible. A proposal to keep toll levels at £1.40 for cars and motorbikes until April 2010 is on the agenda for the meeting. Although a 10p increase to £1.50 would secure an expected £2.5m in a year, Merseytravel chairman Mark O’Dowd said: “We appreciate the difficulties people are facing in the current economic climate.” 
We’re going to the zoo
Law firm Hill Dickinson has been appointed as the sole legal advisor for Natural Vision, the recently announced £225m project that will see the development of Chester Zoo into Europe’s largest conservation, animal and leisure attraction. A planning application for the £90m first phase is due to be submitted later this year and will include the development of a domed ecosystem, as well as a 90-bed hotel and a conservation college.
GB heads into the black
A successful third quarter for identity management specialist GB Group has helped the Chester business to declare revenues 30 per cent up year on year at £16.59m. For the nine months covered in today’s interim management statement, the group reported a pre-tax profit of £440,000, up from a loss of £860,000 in 2007. Revenue in January was approximately 10 per cent ahead of 2007’s figure as the group continued to trade profitably into the New Year.
Oil prices fuel NWF boom
Profits at fuel and feeds distributor NWF rocketed by 68 per cent in the six months to 30 November 2008 on the back of record oil prices. All three divisions of the Nantwich-headquartered business performed strongly. The distribution business doubled operating profit to £1m; operating profit in the feeds division climbed 16.4 per cent to £1.4m and fuel division profits went up 160 per cent. Total pre-tax profits were up 12.5 per cent, to £1.8m. Shares climbed to 89 pence this morning.
Only the strong can survive
The Northwest Regional Development Agency, Business Link Northwest, the Manufacturing Advisory Service North West and The Manufacturing Institute have joined together to launch the Manufacturers Survival Series to help the region’s manufacturers through the downturn. Free breakfast workshops will be held in March at three locations across the North West to advise businesses on accessing the business support and opportunities on offer in the region.
Public sector opportunities
Small companies in the North West are being encouraged to sign up to a government business website to take advantage of thousands of public sector contracts. More than 123,000 companies have already joined the supply2.gov.uk website, which provides details about government contracts for small businesses. On average more than 3,000 contracts are advertised on the website every month and the North West has the highest number of opportunities in England outside of London and the South East. Beverley Hughes, regional minister for the North West, said: “Every year the government spends many billions of pounds on public sector contracts and it’s vital that we’re able to help small and medium-sized companies in the North West take advantage of them.”
Insolvencies set to rise
KPMG Restructuring predicts that insolvencies will rise dramatically in 2009 and reach 5,000 by the end of the year. This compares to 3,225 insolvency appointments in 2008 to 23 December and 2,230 in 2007, a 45 per cent increase in appointments from 2007 to 2008, according to KPMG’s figures. Brian Green, of KPMG Restructuring, said: “The downturn is now firmly entrenched in the real economy and there are hardly any sectors that have not been hit. Confidence is a key driver behind consumers’ and business’ willingness to spend money, and right now confidence is at a low ebb.”
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Property
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If you build it…
Tony McDermott, leader of Halton council and a Northwest Regional Development Agency board member, has this week said that the funds to build a second Mersey crossing will be found, despite a reported £22m shortfall. The government will not release funding until the project is approved by a public inquiry, which will not start until May at the earliest. Land acquisition for the Mersey Gateway scheme is expected to cost £28m.
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