Yesterday’s GDP figures for the UK showed that the economy grew by 0.5% in the third quarter of 2011. In itself a modest figure but acknowledged by some as showing some growth which is better than no growth.
However as we have seen many times in the recent past the real market driver was outside influences. Reports of a referendum to be held in Greece over the terms of the recently agreed bail-out was enough to spook markets again and across Europe shares nosedived as the spectre of a Greek default re-emerged together with the subsequent knock-on effects throughout the Euro zone.
In times like these it is impossible to insulate your company from these buffetings. The Banks stand in the forefront of this onslaught and their problems are well documented. As they look to shore up their own balance sheets their attitude towards funding and risk in general will be increasingly strict.
Expect a closer scrutiny of your monthly management reports and anticipate those “hard to field” questions which are bound to follow.
It may well be that difficult decisions need to be taken but it will be far better that the management of the company implement remedial action before somebody from the outside is appointed to do it.
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