2010 March Economic Report from Rocket

1. ECONOMIC UPDATE
Economic and
Market Overview
as at March 1st 2010
Do you wait for
the market to
thaw?
Or do you defrost
it for yourself?
At Rocket Performance Group Taken stock of the current
we believe you can influence conditions If you would like help to get
your own success Clarified or modified their started or to refine your approach
…..regardless of the market vision and objectives in a particular area please feel
conditions you operate in. Yes Established a team work free to ask. We would be happy
ethic with a clear sense of help.
the market is still a very
different place and yes some purpose
To help our existing clients to
companies face very difficult Engrained a ‘can do’ take stock we developed the
challenges as a result of the attitude Strategy Toolkit, a collection of
credit crunch but few of us can Built and called upon allies 30 strategic planning tools aimed
afford to sit back and “just hope Created clear measures of at helping you to assess your
things work out”. success position in the current market
and to refine your strategic plans.
Some of our clients have been No surprises here then….. Well This is provided as part of our
amongst the first to recognise no surprises but a few service to existing clients and for
this and we are now helping them challenges…..just think about it a small fee to future clients.
to secure new funding lines, find and ask yourself “exactly what
businesses and portfolios to we would have to do to achieve The Toolkit is contained on single
acquire, re-shape business areas each of these traits”. Exactly how memory stick, the size and shape
and develop new business do we move from where we are of a credit card, and provides a
lines…many of our clients have to where we need to be? range of tools for you to select
never been busier and I can from and use. For more
confidently predict they will be There are numerous solutions information or for a free trial
and these differ for each please feel free to contact me at
amongst the most successful of
organisation, but by the following email
2010.
concentrating on the “how”, an neil@rocketperformancegroup.
organisation gives itself the co.uk
So what is it that makes them
opportunity to shape its own
different? What is it that makes destiny …..and then by “taking
Best Wishes
us confident they will succeed? the first step” it can move closer
We would suggest that our more to achieving its vision and
successful organisations appear producing results that are the Neil Ward
to have: envy of its peers. Email:
neil@rocketperformance.co.uk

2. ECONOMIC UPDATE
Key Economic Data Summary
as at 26/02/10
CPI 3.5% Up from 2.9% in December
RPI 3.7% Up from 2.4% in December
Retail Sales Fall (ONS 19/02/10) but
Employment 72.4% Down by 0.1% this quarter February Bounces Back (CBI 26/02/10)
Unemployment 7.8% Down by 0.1% this quarter
Poor winter weather drove UK retail sales
BoE Base Rate 0.5% As of 05/03/09 (no change this month) down by 1.8% between December and
LIBOR (GBP 3M BBA) 0.6425 Rates up marginally January, the sharpest drop in 18 months,
official figures have shown. The fall was
Crude Oil $79.84 a barrel Prices rising this month more than three times faster than analysts
Gold $1096.50 per oz. Down slightly over the month. had forecast. However the figures were
weighed down by the inclusion of petrol
in the official figures for the first time as
National House Price Index January drivers stayed at home in the snow. The
data, from the Office for National Statistics,
2010 (source Lloyds Banking Group as at 04/02/10) adds to concerns about the fragility of the
UK economic recovery. Sales by value
Average House Price £169,777
were up 0.9% from January 2009.
Monthly Change 0.6% E n c o u r a g i n g l y, t h e q u a r t e r l y
Annual Change 3.6%
Confederation of British Industry (CBI)
report has revealed shoppers returned
the High Street in their droves in February
Personal Loan Rates (as of 26/02/10) - Based after UK retailers reported their strongest
growth in sales volumes for two years in
upon £5K (unless noted) over 36 months ex insurance early February.
and subject to underwriting
Lender APR Notes
Complaints about financial services
Sainsbury's Finance 9.9% Higher rate
firms rise (BBC 25/02/10)
Tesco Personal Finance 8.9% No change
Santander UK 8.9% No change The number of new complaints made to
Post Office 9.9% No change the Financial Ombudsman Service (FOS)
Nat West/RBS 12.9% No change about financial firms rose by 18% in the
last six months of 2009. The FOS
M&S 12.9% Borrowers haveto be a UK resident aged 30
or over or a house owner received 82,136 complaints, up from
Halifax 9.9% Loans available to existing Halifax customers
69,841 in the first half of the year.
only. Minimum advance £7000 However, the proportion of complaints
HSBC 9.9% Rate increased restrictions apply
upheld by the ombudsman fell from 59%
to 53%. The five biggest banking groups
Lloyds TSB 11.3% Min Advance £7500 accounted for nearly 47,000 of the new
Barclays Bank 10.9% New higher rate for existing customers only complaints received by the FOS - 57% of
Clydesdale / Yorkshire Bank 13.9% No change the total. These were the Abbey (recently
AA Personal Loans 8.9% to 15.3% Restrictions apply renamed Santander), Barclays, HSBC,
Co-Op Bank 12.9% No change Lloyds and RBS groups, which included
not only their traditional High Street outlets
but also their subsidiaries dealing in
Mortgage Costs - Standard Variable insurance and investments. As a result,
thousands of complaints were made about
Rates (SVR) (as of 26/02/10) the banks' general insurance businesses,
Please note these rates may be subject to deposits/loan to value levels and underwriting as well as about their banking and lending
arms.
Lender Aug ‘09 Comments
SVR
Credit Card Rates at 12 Year High
Halifax 3.5% (15/02/10 Moneyfacts)
Nationwide BS 2.5% Existing customers only
New research has revealed that millions
Santander UK 4.24% New Name for Abbey / A&L / 11/01/10 of credit card holders could face severe
Lloyds TSB/C&G 2.5% debts after card providers have put interest
Northern Rock 4.79%
rates up to a 12-year high. The Bank of
England’s base rate has been at the
Barclays (Woolwich) 5% Calculated on Barclays base rate currently 5% plus 0.95% historically low rate of 0.5% for almost a
RBS 4.00% year but despite this, average credit card
HSBC 3.94%
interest rates have risen to over 18% -
the highest level since 1998.

3. UK economic growth revised up
ECONOMIC UPDATE
House Price News (source Lloyds Banking 04/02/10)
House prices increased by 0.6% in January. Prices rose for the seventh to 0.3% (ONS 26/.02.10)
The UK economy grew by 0.3% in the
consecutive month, but January's rise was the lowest during this period and final three months of last year, faster than
was significantly below the 1.1% average over the previous six months. previously estimated. The revision was
Prices have risen by 9.9% since reaching a low in April 2009; an increase due to stronger growth in services and
in the average price of £15,287 over this period. This follows a decline of production. The initial estimate released
23% between August 2007 and April 2009. The average house price is now last month said the UK economy had
£169,777. grown by 0.1% in the last quarter of 2009,
meaning it had emerged from recession.
House prices in January were 3.6% higher on an annual basis. This is the However, the size of the overall contraction
largest increase in the annual rate of change - measured by the average for in gross domestic product (GDP) during
the latest three months against the same period a year earlier – since the recession increased, from a 6% fall to
February 2008. The comparable rate a year ago was –17.2%. a 6.25% drop. Output in the service sector
rose by 0.5% between October and
Housing market activity continues to pick up albeit from a low base. House December, up from a fall of 0.3% in the
sales in England and Wales in October were 34% higher than a year earlier, previous quarter, the Office for National
according to the latest Land Registry figures. Bank of England industry-wide Statistics said. Output from production
figures show that the number of mortgages approved to finance house industries rose by 0.4%, compared with a
purchase – a leading indicator of completed house sales – in the final three 1% fall between July and September.
months of 2009 was significantly up on the number in the same period a Household expenditure was up by 0.4%.
year earlier (176,517 against 91,221). This was despite a marginal monthly
The better-than-expected revision confirms
fall (-1.7%) in December; the first decline since November 2008. Approvals the UK's economic recovery. But analysts
were still 22% lower than in December 2007. said there was still a chance that the
Low mortgage rates have reduced the burden of servicing mortgage debt. economy could contract again in the
Nationally, typical mortgage payments for a new borrower have fallen from current quarter as a result of a weak
a peak of 48% of average disposable earnings in 2007 Quarter 3 to 32% in January caused by the bad weather and
2009 Quarter 4. the accelerated sales in December as VAT
and other stimulus ended.
Low supply of properties for sale has been another factor pushing up house
prices. There are, however, some signs that the improvement in market Unemployment Falls
conditions since last spring is leading more homeowners to try to sell their ( O N S 1 7 / 0 2 / 1 0 )
property. Instructions to sell increased for the seventh successive month The number of people unemployed in the
in December, helping to increase the stock of properties available for sale. UK has fallen slightly, figures show. Total
(Source: RICS monthly survey, December 2009.) unemployment stood at 2.46 million for
the three months to December, down 3,000
Banks Report Results (various to 26/02/10) on the figure for the previous three months.
Lloyds Banking Group has announced it lost £24bn on bad loans in 2009, forcing the bank heavily But long-term unemployment, covering
into the red. The bank posted an operating loss of £6.3bn - slightly less than analysts had those out of work for more than a year,
expected and less than the £6.7bn loss the group made in 2008. On a pre-tax profit basis, the rose by 37,000 to 663,000, the highest
group made a profit of £1bn. The bank blamed the massive losses on commercial property loans
made by Halifax Bank of Scotland (HBOS), which it took over at the start of last year. figure since 1997
Royal Bank of Scotland (RBS), which is 84% state-owned, posted a full-year loss of £3.6 billion.
RBS is the second major UK bank to report its 2009 results. Last week, Barclays announced House Price Rise Stalls; but is this
record profits of more than £11 billion - a 92% rise on the previous year. However, RBS’ loss is just a ‘blip’? (BBC 26/02/10)
not as bad as analysts were expecting, many had predicted losses of around £5 billion. Furthermore,
the figure is much lower than the £24.1 billion loss. UK house prices fell for the first time in 10
months in February as icy weather put off
house hunters, the Nationwide building
society has said. Average property values
In Marketing, Public Relations, Training & Development
dropped by 1% compared with January,
and Corporate Development with the average home worth £161,320.
Our three distinct business disciplines share one common goal - to give our clients a
But the annual rate of increase accelerated
performance edge to 9.2% because prices dropped
After many years in corporate business leadership, we struggled to find the type of results
faster a year ago.
focused, entrepreneurial people who could make the type of positive contributions we Mortgage lending also slowed at the start
were looking for to drive our businesses forward. People who were knowledgeable,
energetic, results focused and fun to work with, people we could trust as friends. of the year owing to the hangover from
To create such a support service was our goal and now seven years on we continue to
the stamp duty holiday. A separate Land
grow remaining true to this original vision. Across the UK, Europe and beyond we are Registry survey of house prices in England
proud to be making a valued contribution to the businesses and above all people with and Wales found that in the previous
whom we work. From training and development, through public relations and marketing
and on to major corporate development we are delighted to share our expertise, energy month, January, prices rose strongly by
and results focus. 2.1%. That was the eighth monthly rise in
We love what we do and our passion comes through in everything we do. a row reported by the Registry and pushed
"We Bring Focus to Deliver Results"
the average house price up to £165,088
- 5.2% higher than in January 2009.
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
All Right Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic, mechanical, photocopying,
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
for property development. All information is believed to be correct at the time of publication, in so far as it summarises the topics at a very high level it cannot be guaranteed. Please
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
for actions taken based on any information that may subsequently prove to be incorrect. © Rocket Performance Group 2010