Catch up on the big issues in this week’s Small Business Bites. We cut through the noise to dig out stories that really matter to UK small business owners, from the last month. Here’s our roundup of things you need to know.
Interest rates expected to remain at an all time record low
In a recent poll, only 2 of 80 economists thought the Bank of England would raise interest rates for the country before 2019. Claims of Brexit uncertainty were used as a reasoning factor for this dismal financial outlook.
The interest rate currently sits at a record-low of 0.25 and according to this data, will stay this way for the next two years – not good news for anyone, including business owners. The interest hike was polled at being 20% likely when the Bank of England’s Monetary Policy Committee meet in August. The last time interest rates rose was 10 years ago in July 2007.
If a rise in interest did happen in this uncertain economic and political climate, businesses may suffer, especially smaller businesses as the pennies are pinched harder than before. Businesses should prepare for an inevitable rise in the coming years but make the most of the interest freeze as it is; employment opportunities are more crucial now than ever.
An economist at Morgan Stanley wrote to his clients stating they “assume that the economy will slow and keep [rates] on hold”. Keeping interest rates on hold is still better than reducing them further. The news will be certified in August.
Small and medium sized businesses hit with £2bn in late payment costs
Figures from BACS payment scheme found that small to medium sized businesses (SMEs) are owed over £14bn from customers, and are slammed with a huge £2bn in fines over late payments a year in the UK.
More than a third of SMEs say payments are prolonged longer than an agreed amount with customers. This can lead to bankruptcy for many, or it induces heavy fines that many small business owners simply cannot afford to pay.
Almost a quarter of businesses say they rely on borrowed money to stay in business specifically a high percentage with reliance on bank overdrafts. The Federation of Small Businesses stated that operating costs are currently at a four year high for SMEs.
This has led to a very unstable economy for small business owners, especially when this is coupled with worrying about customer’s late payments.
Gender stereotypes are being banned in adverts
Women washing up and men coming home from work may be a thing of the past in your TV adverts.
Research by the Advertising Standards Authority (ASA) found that these adverts are leading to “unfair outcomes” for people in their lives. There will be a renewed focus on equal representation and an attempt for adverts not to ‘mislead, harm or offend’.
This will not just affect TV adverts, however. Business owners will need to pay particular attention to any accidental gender stereotyping in advertising campaigns that could be deemed harmful. Equal representation and not encouraging sexism will now be scrutinised mor across all media channels.
In an interview with Sky News, ASA report author Ella Smilie said, “We know that depicting gender stereotypes in ads has the potential to reinforce expectations as to how groups or individuals should look or behave because of their gender – and that can have a potentially harmful effect on the way people consider their own aspirations and potential, as well as their expectations as to how others should behave.”