August 2010 Monthly Newsletter

1. ECONOMIC UPDATE
Economic and
Market Overview
as at August 1st 2010
“Is innovation a nice to
have or an essential
ingredient for
success?...
“Innovation” can be a source
of excitement or a frustration
and sometimes both. What is record; it is true that property
certain is that innovation or an innovation has led to new
adaption of an idea from architectural styles, new types of
another area can create building and in banking we now 1. How do you identify
have products such as ISAs, tracker meaningful innovations
competitive advantage, a
mortgages, fixed and capped rate 2. How do you develop and
widened product range and an loans. The difficulty comes in launch them successfully
enhanced profile. deciding whether the innovations 3. What innovations might be
are essential to success or not. adapted from another sector
I think few would argue “innovation” After speaking with a number of our
has been a core ingredient in 4. How do you manage the risks
clients their consensus appears to (to ensure they are not abused)
Apple’s success; their new products be: failing to innovate in areas such
have created markets and redefined 5. How do you best realise the
as the above would have resulted benefits.
the way their customers interact in a “choice not to compete” in those
with technology. areas. Some areas are sufficiently Innovating can be a frustrating
niche not to cause a concern process, yet it is likely that the
Google consider it so important that however others have been so
they allow their staff an innovation problems you face in innovating
significant that they provided the have been faced and solved by
day a week to work on “their own innovator with a significant
ideas”. Innovation is clearly an others and that an ‘outside in’
advantage. perspective can see the scope for
essential within the technology
industry but can the same be said creating a solution using experience
On the flip side they were also able in other sectors. Working across
for other industries such as food, to quote examples where the
banking or property? different market sectors we have
innovation was implemented poorly the breadth and imagination to help
or abused and where they wished so if you would like to discuss how
In the food industry packaging
it had not taken place. The use of we can make innovation a reality
innovations such as the tetrapack
securitisation vehicles to move on drop me an email at:
have led to extended shelf life that
subprime loans was perhaps the neil@rocketperformancegroup.co.uk
have resulted in a plethora of new
most significant example.
products being possible, new flavour
innovations have led to new Regards
So if we define “Innovation” as the
premium crisp brands and snacks
and distribution innovations have development or improvement of a
resulted in the spectacular growth new or existing product or service
in fresh food ranges. to improve the strategic strength of
Neil Ward
the organization” (i.e. we focus on
Tel: 07711 197058
In property and banking innovation the positive innovations)
Email:
has a somewhat “mixed” track The key questions might become:
neil@rocketperformance.co.uk

2. ECONOMIC UPDATE
Key Economic Data Summary
as at 21/07/10
CPI (May) 3.2% Down from 3.4% in May.
RPI (May) 5.0% Down from 5.1% in May. General Market News
Employment Qtr to May 2010 72.3% Slight rise in this qtr to May 2010 Consumers Repay Rather Than Borrowing
Unemployment Qtr to May 20107.8% Slight fall over the quarter
(BBC 23/07/10)BBA figures show that
consumers' safety-first approach to unsecured
BoE Base Rate 0.5% As of 05/03/09 (no change this month). borrowing has continued throughout the year.
LIBOR (GBP 3M BBA) 0.73719% Rate continues to rise.
Repayment of consumer credit has
outstripped new borrowing by 2.7% over the
Crude Oil $76.96 a barrel Prices have risen this month. past year. Borrowing on credit cards rose by
Gold $1185.900 per oz. Prices down this month.
£120m in June, but repayments of personal
loans and overdrafts outstripped new
borrowing by £314m. New lending in personal
loans was 19% lower than a year ago.
National House Price Index June 2010
(source Lloyds Banking Group as at 08/07/10) UK interest rates to stay at record low 'until 2014'
(www.bbc.co.uk)
Average House Price £166,203
The Bank of England has kept UK interest
Monthly Change (0.6%) rates on hold at a record low of 0.5% for the
Average Change 6.3% 16th consecutive month. The Bank's Monetary
Policy Committee (MPC) also decided not to
inject any more money into the economy
Personal Loan Rates (as of 21/07/10) - Rates under its policy of quantitative easing (QE).
sourced from lenders websites on 21/07/10 - Based upon £5K (unless
noted) over 36 months ex insurance and subject to underwriting UK unemployment falls to 2.47 million
Lender APR Notes The number of people unemployed in the UK
fell by 34,000 to 2.47m in the three months
Sainsbury's Finance 10.0% 8.8% for Sainsburys Nectar card holders to May, official figures show. That took the
Tesco Personal Finance 8.9%
No change jobless rate to 7.8%, the lowest for a year,
the Office for National Statistics (ONS) said.
Santander UK 8.9%
No change The number of people in work rose by 160,000
Post Office 9.9%
No change in the three months to May, the biggest rise
Nat West/RBS 12.9%
No change since August 2006. However, the increase
M&S Borrowers have to be a UK resident aged 30
12.9% was due to a record 148,000 rise in the number
or over or a house owner of part-time workers, while full-time workers
Halifax 19.9% Loans available to existing Halifax customers increased by just 12,000. The ONS said the
only. percentage of workers in part-time jobs was
HSBC 17.9% New higher rate for lower advace 27%, its highest since records began in 1992.
Lloyds TSB 13.9% Llods TSB customers only
Barclays Bank 10.9% Barclays customers only Credit card market back open for business
Clydesdale / Yorkshire Bank 20.9% Significantly higher rate for lower loans Source: Moneyfacts.co.uk 7.6.10
AA Personal Loans 8.9% to 15.3% Loans available from £7.5k to £14.95k
Co-Op Bank 12.9% No change The credit card market has seen a resurgence
in recent months as card providers once
again put the ‘open for business’ sign in the
Mortgage Costs - Standard Variable window. In the last year the number of cards
charging no interest on new purchases for
Rates (SVR) (as of 25/06/10) at least 10 months has increased by 450%.
Rates sourced from www.lovemoney and lenders websites on 24/06/10 In the same period, the number of cards
- rates may be subject to value levels and underwriting. offering 0% on balance transfers for at least
10 months has increased by 20%.
Lender Aug ‘09 Comments However, interest rates charged on cards
SVR continue to increase, with the average credit
Halifax 3.5%
card rate today standing at 18.7% APR. Since
Standard Mortgage Rate (SMR) is 3.99% however Nationwide customers with
the start of the year the following providers
Nationwide BS 3.99% (SMR) 2.5% (BMR) deals reserved on or before 29 April 2009 will revert to the variable Base Mortgage have increased rates for new customers:
Rate (BMR) which is currently 2.5%
Santander UK 4.24% Barclaycard – rates increased by up to
From 1 June, new borrowers, or current ones who switch deals, will have to revert 2.0%
Lloyds TSB/C&G 3.99% to an SVR without any ceiling, currently set at 3.99%. The decision does not
affect borrowers with Halifax and Bank of Scotland. Capital One Bank – rate increased by 5.0%
Northern Rock 9.79% Egg – rate increased by 1.0%
Barclays Base Rate 2.49% typically caries an additional m1.99% premium on
Barclays (Woolwich) 2.49% products MBNA Europe Bank – rate increased by
RBS 4.00% 1.0%Sygma Bank – rate increased by 2.0%
HSBC 3.94%

3. ECONOMIC UPDATE
Halifax House Index Key Facts
• House prices fell by 0.6% in June. This followed a 0.5%
decline in May.
• Prices in the second quarter of 2010 were 0.1% lower than in the
first quarter of 2010. This continued the slowdown in the pace of
house price growth since the beginning of the year and compared
with a 0.6% rise in 2010 Quarter 1.
In Marketing, Public
• House prices in June were 6.3% higher on an annual basis as Relations, Training &
measured by the average for the latest three months against the Development
same period a year earlier. This was below the 6.9% increase in and Corporate
Development
May, which was the highest since October 2007 (8.9%).
Our three distinct business
• Prices are 7.5% above their April 2009 trough despite the modest disciplines share one
decline over the past few months. The average house price is now common goal - to give our
£166,203; 17% below its August 2007 peak. clients a performance
edge
• The increase in the number of properties for sale is curbing the After many years in
upward pressure on house prices. Estate agents have reported a corporate business
sharp increase in instructions from new vendors following the recent leadership, we struggled to
find the type of results
abolition of HIPs, reinforcing the recent trend as more homeowners focused, entrepreneurial
have been encouraged to sell following the improvement in house people who could make the
prices in 2009. The ratio of house sales to the stock of unsold type of positive contributions
we were looking for to drive
properties on surveyors' books fell for the fifth time in the past six our businesses forward.
months in May. (Source: RICS monthly survey, May 2010.) The People who were
easing in this ratio indicates a moderate loosening in market conditions, knowledgeable, energetic,
reducing the support for house prices. results focused and fun to
work with, people we could
• Housing market activity has eased. Bank of England industry-wide trust as friends.
figures show that the number of mortgages approved to finance To create such a support
house purchase – a leading indicator of completed house sales – service was our goal and
now seven years on we
were largely unchanged between April and May, at a seasonally continue to grow remaining
adjusted 49,800. Approvals in the three months to May, however, true to this original vision.
were 3% lower than in the preceding three months, indicating a Across the UK, Europe and
beyond we are proud to be
modest softening in housing market activity. making a valued
• In separate research, Halifax has found that the cost of owning and contribution to the
businesses and above all
running a home in the UK has declined by 6% over the past two people with whom we work.
years. Between April 2008 and April 2010, the average annual cost From training and
associated with owning and running a home fell by £544 from £9,564 development, through public
relations and marketing and
to £9,020. In real terms (i.e. after allowing for retail price inflation), on to major corporate
the cost of housing has fallen by 9%. Housing costs in the UK are development we are
now equivalent to 27% of gross average full-time earnings, down delighted to share our
from 30% in 2008. expertise, energy and
results focus.
• The fall in the cost of housing since 2008 has been driven by a 19% We love what we do and our
(£881) decline in mortgage payments (interest and capital repayments). passion comes through in
The average mortgage rate paid by existing borrowers fell by 2.13 everything we do.
percentage points between April 2008 and April 2010 from 5.80% to "We Bring Focus to
3.67%. Deliver Results"
The Rocket Performance Group
Rocket Marketing Associates Rocket Training & Development Rocket Corporate Development
Lanark, Scotland Ross-on-Wye Beaconsfield
Email: info@rocketperformance.co.uk www.rocketperformance.co.uk
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recording, or otherwise, without the prior permission of the publisher Rocket Performance Group. This report has been created to provide a summary overview of the market environment
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note that all information is provided in good faith, whose accuracy we are not always in a position to guarantee. As such Rocket Performance Group can accept no liability whatsoever
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