Business
UK Economy Faces Recession Soon – Report
The United Kingdom economy will enter recession in the first half of the year as households continue to cut back, an influential think tank has warned.
The National Institute of Economic and Social Research (NIESR) said the government should temporarily ease its spending cuts to promote growth, according to a British Broadcasting Corporation report on Friday.
It expects the economy to shrink 0.1 per cent in 2012, but to grow 2.3 per cent in 2013 if the eurozone debt crisis is resolved.
Niesr said, however, that deficit cuts had bolstered market confidence.
The UK is already close to another recession – defined as two consecutive quarters of economic contraction – after official figures in January showed that the economy shrank by 0.2 per cent in the final three months of 2011.
In its UK and World Economy Forecast, NIESR said, “We forecast a return to technical recession in the first half of this year, as households continue to retrench, credit conditions remain tight, and businesses are reluctant to invest given uncertainty about both domestic and foreign demand.”
Niesr said economic conditions will not improve in the short term, as both the private the public sectors are still focused on paying off debts. “Over the near term we do not expect economic conditions to improve,” the report said.
The think tank predicted that inflation would fall sharply, with the consumer price index down to 2.2 per cent this year and 1.4 per cent in 2013.
But there were grim forecasts on unemployment, which NIESR expects will rise to about nine per cent this year, from 8.4 per cent in the three months to November, and will remain above seven per cent in 2014.
“Unemployment at this elevated level for such a long period is likely to do permanent damage to the supply side of the economy, with large long-run economic costs,” the report said.
“As Niesr have said, the government’s commitment to deficit reduction has helped maintain market confidence,” said Treasury spokesman
Niesr suggests relaxing the government’s austerity programme. “The UK economy currently suffers from deficient demand; the current stance of fiscal policy is contributing to this deficiency. A temporary easing of fiscal policy in the near term would boost the economy,” the group said.
More investment would not derail the chancellor’s long term fiscal goals, Niesr said.
On Monday, the Institute of Fiscal Studies said the government could safely cut taxes temporarily, without worrying that the Bank of England would raise rates in response.
But the IFS that there was little scope for big or long-term tax cuts, which risked undermining investor confidence.
The chancellor faces his third budget with the economy and public finances in considerably weaker shape than he had hoped a year ago,” said Paul Johnson, director of the IFS.
Last month, Chancellor of the Exchequer George Osborne said he would continue with the coalition government’s efforts to reduce the deficit, despite criticism that it is choking off recovery.
A Treasury spokesman said, “As NIESR have said, the government’s commitment to deficit reduction has helped maintain market confidence.
“They expect the government to meet its fiscal mandate and for the UK economy to grow more strongly than the euro area this year and next.”
Meanwhile, NIESR forecast global growth of 3.5 per cent for 2012, led by China and India, and four per cent in 2013. It forecast US economic growth of two per cent this year. An independent Scotland could be more constrained on economic policy than at present, a study has suggested.
The report also considered the monetary and fiscal policy choices facing Scotland if it leaves the union.
Niesr concluded that retaining sterling would be “sensible” for Scotland, but warned that currency union could restrict fiscal policy.
Kolomoni Microfinance Bank has awarded grants to five female entrepreneurs to boost their businesses as part of its commitment to promoting women in business.
The initiative, organized to mark International Women’s Day, was themed “Accelerate Her Growth.”
According to the bank, the decision to support women was inspired by World Bank data, which shows that 41 percent of Nigeria’s micro-businesses are owned by women.
Delivering the keynote address, business strategist, Ebun Akinwale, emphasized that entrepreneurship requires resilience, creativity, and passion.
She illustrated this by recounting her own business challenges and highlighting the critical role passion plays in overcoming obstacles.
The event underscored Kolomoni’s mission to empower women and support small businesses in Nigeria.
Other speakers at the occasion were Odunayo Oyebolu, a seasoned entrepreneur; Victori Ajiboye, a marketing strategist with global experience; and Simi Ojumu, a finance expert.
The beneficiaries said the financial support was a validation of their hard work and a boost of confidence towards scaling through in their businesses.
The winners were selected after sharing their entrepreneurial journeys and presenting business proposals for financial assistance from the bank.
The 8th edition of the Nigeria Small and Medium Enterprises (SMEs) Summit and Awards (Nigeria SMEAwards) is set to take place in Lagos for the first time in its history, marking a significant milestone for this prestigious event.
Endorsed by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the annual awards celebrate the entrepreneurial spirit driving Nigeria’s economy.
The visionary convener of NigeriaSMEAwards 2025, Adedayo Olalekan, said, “Governors from Zamfara, Sokoto, Ebonyi, Borno, Enugu, Ekiti, Benue, and Kaduna States have all implemented transformative initiatives that have greatly benefitted local enterprises.
“Their contributions will serve as a beacon of inspiration for the nation.”
Speaking at a recent press conference in Lagos, Olalekan emphasised that the event would introduce a fresh and unique approach, moving away from tradition.
“Despite economic challenges, Nigerians continue to show an unwavering commitment to progress”, he said.
He noted that the awards will not only honor outstanding individuals, but also recognise the critical role state governments play in nurturing vibrant SMEs.
“State governments have been instrumental in fostering a supportive environment for SMEs, which in turn benefits both the awardees and the larger economy.
“With major banks like Providus, Access, and First Banks competing for top honors, the 8th NigeriaSMEAwards promises to be a night of celebration, recognising exceptional contributions to Nigeria’s SME landscape”, Olalekan added.
Amid global challenges such as inflation, geopolitical instability, and the ongoing conflict in Ukraine, Nigerians continue to show remarkable resilience.
Their efforts, according to reports, have contributed to job creation, economic growth, and overall prosperity, with SMEs at the forefront of this success.
This year’s awards will recognise governors who have made significant strides in advancing the SME sector within their states.
Small and Medium Enterprises (SMEs) consultants in Rivers State have called on entrepreneurs to be focused and avoid distractions.
The experts, who were speaking on the recent developments about the change of leadership in the state, said entrepreneurs need to put more efforts in their businesses in order to break even in the present situation in Rivers State.
Speaking in a chat with The Tide, an international SMEs consultant, Amb. Larry Goodwill Ajiola, said the political moves is capable of distracting SMEs who are not grounded in their businesses, adding that “the serious minded business men and women would utilise the opportunity to increase their revenues”.
Amb Ajiola, who is the President and Chief Executive Officer (CEO) of Rumuomasi Co-operative and Credit Society Limited, Port Harcourt, said, “Rugged entrepreneurs look out for business opportunities in situations around them, whether good or bad”.
He reiterated that the loan facility given to 3,000 SMEs in the state revived and expanded businesses, adding that the empowered businesses should continue to push, no matter the situation.
“credit is a powerful tool for achieving financial security.
“We can only keep imagin the economic value that the over 3,000 MSMEs would add to the positive economic dynamics of Rivers State and the Local Government Areas in terms of Gross Domestic Prooduct (GDP), increased tax returns, employment creation, income distribution, and production of goods and services”, he said.
Another SMEs Expert, a business consultant and SMEs trainer, Mr. Chisom Sam-Orji, in his advice, noted that every SME in the state should realize that change is the only constant thing.
He said SMEs should also know that “tough times never last, but tough people do”, adding the need for every entrepreneur to stay focused on creating value and remain resilient.
“This is not the time to be distracted by every noise around your space, but to maximize every time you have to focus on the essentials and keep creating value.
“For some people, it may just be the time to diversify, create new products and services to serve a new or existing market. But this must be based on the facts available to you via research and market surveys”, he said.
The SMEs expert also said the present time in the life of an entrepreneur is a time to cut off unnecessary excesses that surround one’s business.
“Those extra costs that may hamper your growth in this season and beyond, and focus on just essentials.
“SMEs should find certain leverages that are available to aid their business growth. This could be in form of grants, knowledge, and other leverage tools.
“Collaboration is one big way to grow in this season. Finding ways to collaborate with like minds instead of competing could enable a product or service gain advantage in the market and beyond.
“They should also find ways to sustain and grow their customer relationship as this is key to sustaining business flow. They must seek new and efficient ways to serve their customers and gain their loyalty”, he stated.
He further called on every entrepreneur to keep building capacity and never take their eyes off their visions, adding the need to muster every courage it takes to keep building and moving forward.
Lilian Peters