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British economy contracts in Q4 2010 - how does this impact you?(25-Jan-2011)

As per the latest report released by the Office for National Statistics (ONS), the British economy contracted by 0.5% in the last three months of 2010. If the seasonality effects are removed, the results would be flattish. ONS has made it clear that bad weather has a lot to do with the negative growth.

While these numbers certainly do raise concerns about the recovery of the economy and the outlook for businesses in 2011, the government believes that they should carry on with their large public spending cuts programmes. The Chancellor, George Osborne, said the numbers were disappointing. But he added the government would not be "blown off course" from its austerity programme. The speed and scope of the coalition government’s deficit reduction programme has been criticised by the shadow chancellor Ed Balls.

What is the reality? - with higher than expected inflation figures, rising fuel prices, high food and commodity prices, no commitment from the banks on increased lending to businesses, falling exchange rate against the dollar, rising unemployment…there is no doubt that 2011 will be yet another challenging year for almost all sectors, exception being manufacturing which has expanded by 1.4% and is predicted to remain strong in the coming months.

Stuart Boseley, Director Best Insurance commented on the figures and warned that if inflation continued to remain at the current levels and banks do not increase lending, businesses will have no choice but take the difficult decision of cutting their staff costs further. This will no doubt lead to increased number of redundancies, but the businesses will have no other choice to see through these difficult times. He added that redundancy insurance should be seriously considered as no one is insulated in these uncertain times.

Best Insurance specialise in redundancy insurance covers and have a wide ranging income protection and payment protection policies. The free specialist service offered by Best Insurance is used widely by even those who have bought redundancy insurance elsewhere as they want to be certain that their final fall back option is robust.