Service Sector Slows in UK Causing Troubling Economy Growth

In the UK, economic growth hit a new low at a rate of only 0.3% for the beginning of the year. According to the Office for National Statistics, this drop in growth was due to a decline in the Service Sector. The last time economic growth hit an all-time low was in 2016 when the rate was at 0.8%. The fact that the January-to-March period yielded more than a 50% decrease from last year is cause for worry amongst UK officials.

As inflation continues to rise, economists had planned for a decrease in Gross Domestic Product growth. However, their estimate remained at a hopeful 0.4%. Unfortunately, the reality is much different. While a 0.1% difference may not seem important, it is statistically significant. IHS Markit Chief Economist Chris Williamson reports that the rising costs have finally reached household spending.

As the Service Sector accounts for roughly 78% of the UK Economy, the decrease in spending is being felt by businesses nationwide. Restaurants, hotels and distributors took the largest hit falling by 0.5%. Retail trade was also inhibited as rising prices are continuing from the constant inflation. Overall industrial production was able to grow by 0.3% in the the first three months of 2017 thanks to the rise in motor vehicle output. On the other hand, agriculture has seen a slight decrease during this first period.

All of this decrease in sales is resulting from a lack in household spending. The rising inflation in the UK has reached a high level of 2.3% this March. During the fist period of the year, retail sales saw their largest fall in seven years. Businesses of all sizes are feeling the effects of the rising inflation. While the period from January-to-March typically sees lower sales, many companies fear this trend will continue into the following periods. After all, the inflation issue doesn’t seem to be curbing.

Boris Explains How Brexit Could Promote Trade in the United Kingdom

The United Kingdom joined the European Union in 1973. Two years later, it confirmed its membership through a referendum. In the 1980’s, a move or decision to exit the European Union was supported. Unlike then, the same movement is highly discouraged currently. Of late, the news headlines have been labeled with bold statements screaming Brexit. Although the United Kingdom has not made a decision to exit the European Union, investors and politicians have started predicting the future of stock markets in the region, in the case of Brexit. Boris Johnson explains that amidst all adversities, Brexit could be a good move for the people of the United Kingdom.

Export Business

While giving his first speech in the completed general elections, Boris said that Brexit would allow Theresa May to enter into business with the United States of America and India. As a result, there would be a trade in the foreign exchange market. This is good for business in the United Kingdom. Boris made it to the general elections campaign amidst sources from people that Theresa May, the serving prime minister of the United Kingdom, would take full credit for his victory. Boris further added that Brexit could mark the beginning of a new, positive era in the world of business for the United Kingdom.

Trade

Citing haggis, the staple food of Scotland, was banned in the United States of America as one of the products that can be exported for business. He also added that Scotch whiskey would make an excellent export venture. This brand has a heavy duty tax in India. Boris added that while walking in Uxbridge, he encountered a wooden display of counter. The proprietors were selling Toblerones. This was in Saudi Arabia. If the United Kingdom could hack such markets, it means that Brexit can be a good thing in the end.

What do we expect after Britain Invokes Article 50?

Did you know that the British referendum was not legally binding? For the British people to leave the European Union, they must invoke Article 50 of the Lisbon Treaty that came to be in the year 2009. The Brexit is likely to affect European business in many ways especially now that Theresa May, the British Prime Minister has been authorized by the British Parliament to initiate the exit process. This means that if the European Union and Britain reach an agreement, all the treaties between these two bodies will cease to exist. Uncertainty is likely to increase if the European Union and Britain do not reach an agreement. Two years of negotiations will be added to undo all the treaties dating back to the formation of the European Union.

The British people have leverage in this deal allowing them to negotiate from a position of strength. This is from the fact that UK imports products from the European Union. However, experts say that if UK negotiators put a lot of emphasis on this notion, this argument will end up being counterproductive. There are concerns that if UK can gain better terms that when it was a member state, this is likely to encourage other member states to leave the European Union.

The European Union is also expected to accept some terms that portray is as weak just for economic gains. Experts also say that the stable nations in Europe economically are those nations that do trade with the United Kingdom. The major issues concerning Brexit are trade and immigration. Movement across Europe will become restricted for many Britons. Conducting business across Europe will also be complicated unlike before as they will be expected to produce more papers. It’s the desire of the British people to keep their relationship with the European Union as it is today. However, this is very unlikely, and a lot of changes are expected.

Manufacturing Output Growth Slows At End Of First Quarter Of 2017

The manufacturing PMI index decreased for the second consecutive month in March to 53.9 in March from 54.8 in February.

 

The Spanish manufacturing sector remained in the growth zone at the end of the first quarter of the year and business confidence remained high and well above the series average, which has already reached almost five years. Although there were also signs of a slowdown in the sector, as it is extracted from the PMI Index of the Spanish Manufacturing Sector made public today by Markit IHS.

 

Manufacturing production increased significantly in March, extending the current expansion sequence to 40 months. However, the pace of growth slowed for the third consecutive month and was the slowest since October 2016. According to Andrew Harker, senior economist at IHS Markit, the report data suggests some loss of momentum during the first quarter of the year.

 

The report notes that both production and employment rose in March, albeit weaker, and inflation has grown at its highest rate since April 2011 (71 months), just behind the January rise.

 

Markit stated that although there is still a strong monthly improvement in the health sector, the latest strengthening of business conditions was the weakest since October last year.

 

New orders also rose at a weaker pace, but higher customer demand continued to support overall expansion. New orders for exports increased sharply, but at the slowest pace of five months.

 

Pending orders continued to increase in line with the increase in new orders, but the pace of accumulation in March was moderate. Companies struggled to increase their capacity by hiring additional staff, but the rate of job creation slowed.

 

The rate of inflation of costs accelerated in March to the fastest in almost six years, having accelerated for the seventh consecutive month, and rose especially cotton, paper, plastics, steel, fuel and other by-products of the oil. There were indications of a shortage of raw material supply in March, the report notes in this regard.

 

Europeans Complain about McDonald’s

McDonald’s is facing complaints from groups in Italy, Germany, and France about its allegedly anti-competitive policies related to franchising. These complaints ask national competition regulators to look into chain’s practices, Investing.com reports.

 

The American fast-food chain has been accused of unfair franchising conditions and terms such as prices set for products sold at franchise units, which allegedly are higher than prices charged at company-owned units. This leads, the complaints state, to having franchisees charge higher prices than customers pay at outlets owned directly by McDonald’s.

 

So far, the French authorities have acknowledged that they received complaints but haven’t made any further comments. Meanwhile, the regulators in Italy and Germany haven’t responded yet.

 

More than 80 percent of all McDonald’s units are not owned directly by the company, instead they are franchised to private individuals and companies. So, any allegations that the franchisees are not treated fairly are of serious concern. McDonald’s has already responded. “Our franchisees set their own menu prices,” Terry Hickey, a spokesperson for the company claimed.

 

However, a large French consumer organization, Indecosa-CGT, claims that McDonald’s in France made franchisees charge higher prices. Meanwhile, several Italian consumer groups are withdrawing complaints made to the European Union, claiming the procedures are too slow. Instead, they’ll be proceeding with direct complaints to the Italian national competition regulators.

 

At the same time, other complaints involve claims of restrictions on suppliers, excessive rents for premises, and tying franchising deals with leases.

 

If found guilty of antitrust violations, the national competition authorities can fine a company as much as 10 percent of its global sales.

 

In 2016, McDonald’s Corporation had revenues exceeding $24 billion, with net profits of $4.6 billion. Its market capitalization exceeds $100 billion, placing it among the biggest companies in the world, and certainly one of the few dominant players in its industry.

European Union Leader Falls Further From Reality

The European Union bureaucrats get more and more ridiculous by the day. The European Commission’s President, Jean-Claude Juncker, just attacked Donald Trump for promoting Brexit, and threatened to support Texan independence as a revenge, states CNBC article. And it wasn’t April Fool’s Day joke.

 

“The newly elected U.S. president was happy that Brexit was taking place and has asked other countries to do the same,” Juncker stated. “If he [Trump] goes on like that, I am going to promote the independence of Ohio and Austin, Texas,” he continued.

 

In the past, Juncker had served as a Prime Minister of Luxembourg, an ultra-tiny nation of around half a million people. After, he has joined the EU’s bureaucratic ranks and is among the permanent faces on the European political scene.

 

The European Union bureaucrats are known for creating excessive and often ridiculous policies. In fact, the regulatory burden, on top of migration, was a reason for Brexit. The United kingdom has just began its two-year journey through exit negotiations. Some say, Britain is likely to be punished to prevent other member states from leaving.

 

Among the latest announcements, is the European Union’s plan to crack down on toasters and hair-dryers as devices considered to be harmful to the environment. The European Union also recognizes snails as fish, and bans bananas that have abnormal curvatures.

 

What’s more, the EU prohibits recycling of teabags and makes it illegal for children under 8 to blow balloons. Meanwhile, the taxes in Europe are high, deficits rising, while youth unemployment is high. In some countries, such as Greece, Spain, and Italy, it exceeds 20 percent.

 

The EU officials are out of touch with reality, and Juncker is just another example of how ridiculous the EU has become. Soon, this structure may as well collapse. Other nations are already considering their own “Brexits.”

 

Pullmantur Group Strengthens Cruise Routes For Spanish Speakers

To differentiate themselves in this competitive tourism market, the Pullmantur group boosts crossings for Spanish-speaking customers from Spain and Latin America

 

The golden rule of the cruise business is to specialize routes depending on the culture of the travelers to convert the ship’s stay into the customers’ home. The French want silence, good food, and hardly travel with children. Germans prefer entertainment activities, many attractions on ships, and frequent their breweries. Latinos often travel with family, especially on vacation; They like Mediterranean food and have free time on scheduled shore excursions.

 

Andres Molina, professor of the Master in Business and Maritime Law of Icade and independent consultant of passenger ships, explains that Spaniards travel well with people that share similar cultures, such as Italians, Brazilians, Mexicans, and other Latin Americans. Although the boat must be adapted to the customer of each country. The cruises are also specialized for different types of public. Gruppit Viajes has cruises for singles and Disney Cruise Line designs routes for children.

 

Responding to this reality, Pullmantur Cruceros has strengthened to be the Spanish-speaking operator, a language that dominates English in its four ships, designed for Latin Americans and with slight regional differences. Those dedicated to Spanish customers (on European routes, most of them depart from Spain) have Spanish food and customs schedules, a Mediterranean cuisine designed by Paco Roncero (cook with two Michelin stars) and two children’s areas with activities on each boat.

 

Pullmantur expanded European routes with a supply in the Canary Islands in 2016, which filled a boat throughout the season, and the success entrenched the idea of focusing on the Spanish-speaking market, leaving French, where it also operated. From this year, Pullmantur has a ship in the Caribbean and another in Spain throughout the year, and moves the other two from one region to another, according to the seasons. That means increasing 30% of the capacity in the Spanish market and 40% in Latin America.

 

Muga Wines And The Expansion To New Markets

The Muga Group invests 2.5 million euros in making 2,500 barrels and advances an agreement to produce Ribeiro.

 

The wine group founded in 1932 tries to maintain the production of its wines at the same time as it tries to improve the business by expanding it to new markets.

 

It isn’t an easy task. The production is tremendously oscillating, from one million to two million bottles. With a turnover of between 18 and 22 million euros, depending on the aging, the shopping race that the group undertook in recent times to reach 250 hectares of vineyard (they acquired 42 in 2016) has led them to have 60% Of the grape production in their hands. The rest, coming from 150 hectares, are supplied by farmers in the area supervised by the group.

 

They compete as a medium-sized player in a sector dominated by brands that reach a 30-fold increase in their turnover. For example, it is the country’s first winegrowing group with sales of 690 million, followed by Felix Solís (Viña Albali) in second place with 214 million and a range of 32 references.

 

Muga wines, far from competing for volume, are at the top of the segment in terms of quality. 82% of the family business is in the references of red (aging, special selection reserve, Enea gran reserva, Torre Muga and Aro) and the rest in white, pink and to a lesser extent, in cava. Soon, Ribeiro wines, one of Galicia’s most powerful names, will be added to its catalog. They will do so thanks to a collaboration agreement with a local producer that could crystallize, in the future, into an acquisition.

 

The group exports half of its wine to more than 50 countries, most notably the United States, the United Kingdom or Canada. In addition, it is in Taiwan, China, Hong Kong or Thailand, more complicated markets (in China since the late 90’s) because wine culture, they explain, is not so widespread.

 

What Is About To Happen With The Brexit Situation?

Anyone who has paid even the slightest attention to the news within the last year or so has surely heard the term “Brexit” thrown around often. One may wonder what the term means, what impact it will have on business, and why we should all be concerned with it.

 

Brexit is a slang term made up that means “the British exit from the European Union”. It was something that was put up to a vote in the summer of 2016. To the surprise of many, the vote passed and the British people decided that they did in fact want to leave the European Union and go about it on their own. This was despite the fact that leaders from all of the major political parties opposed this. In the end the vote to exit won by a narrow majority.

 

Following this vote the Prime Minister at the time was Conservative David Cameron. He stepped down from his role as Prime Minister largely because of the results of this vote. In his place the party put Conservative Teresa May in the Prime Minister’s seat. Given that she now runs the country, she is the one in charge of putting this British exit into motion.

 

Business Insider details how this process is going in terms of the actual implementation of the order. They say that the Prime Minister has signed something known as Article 50 which was a part of the formation of the European Union in the first place. It allows any country that wishes to leave the Union to do so. Theresa May has signed that order in accordance with the wishes of the British people.

 

Now that this has been set in motion it is a two year process to actually take the country out of the Union and negotiate a few topics that are important to this situation as well. For example, there is going to be some debate about how much money the United Kingdom will pay to the Union as a result of leaving. Given this, expect that it will still take some time before this story is completely hashed out. It’s impact on business will remain up in the air until such time that it can be completed.

 

Why It May Take Longer for Britain to Leave the European Union

Brexit came as a surprise to many people last year. While many people may have forgotten about it, Brexit hasn’t happened yet although the British government is working day and night to ensure the process goes smoothly as planned. Just a few days ago, British Prime Minister Theresa May invoked Article 50 signaling that the British government wants to leave the union as soon as possible. Following this move, European lawmakers have been quick to urge the European Union to withdraw all business conducted on British soil to European soil. During a press conference, the lawmakers expressed their desire to see European Union business conducted on European soil. Instead, the European Union should act swiftly to look for other financial hubs with Paris, Amsterdam, Dublin, and Frankfurt being suggested.

 

Many EU executives, on the other hand, have distanced themselves from this idea as it is likely to slow down the process. This decision is left to the European Commission which has the power to force a relocation. Advocates for this move say that it will help defend European jobs, strengthen the European Banking System and make it easy to monitor all processes of the European Union. From the look of things, London is in a weaker position to maintain a leading role in European Union Business.

 

Negotiations for Britain to leave the European Union are being led by a government department set up by Theresa May. This department is headed by David Davis alongside Liam Fox. These are two common figures that campaigned hard for Britain to leave the European Union. Borris Johnson is also joining them in the negotiations. After the British Government invoked article 50 on Friday, it will take them two years to completely leave the European Union. Britain could stay in the Union for more than two years if the other 27 members fail to agree. The European Union has been in existence for 43 years, and there are many treaties and agreements that have been discussed over these years. This is why Britain needs at least two years to undo these treaties that cover many subjects.

 

Britain should expect some hurdles on the way as some European countries are difficult to deal with.