Austerity measures not working, say brokers

Monday 6th August 2012

More than four out of five brokers think the Government is not doing enough to stimulate economic growth and two-thirds say the economic climate is having a negative impact on their business. Most think the austerity measures are not working.
 
The new survey, carried out by United Trust Bank among brokers operating in the bridging, development finance and asset finance sectors, found that 82% of brokers felt that the Government could be doing more to get the UK economy back on its feet.
 
The findings come soon after figures from the ONS revealed that the output of the economy fell by 0.7% between April and June 2012, deepening the recession.
 
A total of 67% of brokers responding to the survey indicated that the current economic climate has had a negative effect on their business, with 75% describing the three-year outlook for the UK economic climate as ‘unsettled’. A further 18% described it as ‘gloomy’.

However, 25% of brokers suggested that their business had been positively affected by the economic climate.
 
Brokers calling for a further reduction in interest rates were heavily outnumbered by those who believe the 0.5% base rate is fine where it is. Three-quarters of brokers believe the Bank of England should leave rates alone and 16% feel the rate should come down even lower, while 8% think interest rates should rise.
 
When asked what the Government’s main fiscal approach should be, nearly half of brokers would like to see a lowering of personal and/or corporation taxation and 18% would like an increase in public spending. Just over one in five believed we should continue with the current austerity measures.
 
Harley Kagan, managing director of United Trust Bank, said: “It’s clear from this research that most brokers want more action from the Government to get the economy moving forwards.

“Although some brokers have taken advantage of the economic turmoil and seen opportunities to grow their businesses, many want more support during this economic downturn.

“However, it does seem there’s little appetite for a further reduction in interest rates.”