Here I go again…

What better way to return to the blogosphere than on the back of this classic piece of pomp rock from Whitesnake (and by the way a special nod to the friend who suggested ‘Hello, Hello I’m back again’ (by convicted paedophile Gary Glitter)…I make my living advising people not to fall into precisely that kind of beartrap thank you very much).

I’ve spent much of the last six months working in Abu Dhabi and it’s been a fascinating experience – although also sufficiently full-on to curb my blog output.  With an extended spell back in the UK beckoning I thought I would muse a little on my experience of the communications landscape here, as a means of breaking myself back in…

First things first – some context.  This is a land in the midst of the most incredible social, economic and financial development; a nation with an incredibly short history, but making its mark on the more established world in an increasingly visible way.  There is much to admire about the way the region is using its new found wealth to diversify its economy for the greater good of its people; while the Gulf is not immune from the effects of the credit crunch, rulers and policy makers have continued to invest as a means of building out the local infrastructure.  There has been an element of schadenfreude in recent reporting by the western media of the impact of the downturn on Dubai, but the train has left the station and it’s not turning back.   In my humble opinion, therefore, it makes sense to be on the train, rather than throwing spears at it from afar.

There are tremendous challenges for communicators working in an environment where the media has traditionally been relatively closely controlled.  So far as the media landscape is concerned things do seem to be evolving.  The National, launched last year, caters for its diverse readership with distinction.  The Financial Times has an excellent local bureau in Abu Dhabi and has been at the forefront of breaking news as the Emirate’s Sheikhs have flexed their financial muscle, buying stakes in iconic businesses such as Barclays, Daimler, Ferrari and GE.  Most of the main international newswires now have operations in Abu Dhabi.  And there is of course a strong contingent of local media including Gulf News and Khaleej Times for the English speaking contingent and the Arabic Al Ittihad, Al-Bayan and WAM, the Emirates News Agency.

For the communicator there is a tremendous opportunity to be in on (or at least relatively near to) the ground floor, helping to shape the UAE’s approach to media and stakeholder engagement.  Mubadala Development Company’s recent annual report - the first such document to be published by any of the UAE’s different Government-owned investment bodies – is genuinely ground-breaking in its depth, detail and disclosure.  Other investment arms such as IPIC and even the Abu Dhabi government itself have tapped the debt markets through bond issuance, opening themselves up to a level of scrutiny by Credit Ratings Agencies, investors and potential investors that was hitherto unknown.  As the UAE engages more openly with the established economies of the world, expect to see this driving demand for an ever-more proactive approach to communications.

All of which augurs well for the development of the communications discipline in the UAE.  In these still-difficult economic times, for those of us in the financial communications space this is in many ways the hottest game in town with the relative financial strength of the region driving corporate activity.  I see no slackening in the pace of development in the future – and, therefore, no decrease in the demand for communications expertise locally.

So that’s it; I’ve broken the drought at last.  Henceforth I will return to my more usual fare of musings on financial issues of the day.  And, in a nod to my wife (or numberonerobbiefan as her Ebay nickname would have it), I hope to be Back for Good.

Money (that’s what I want)…

Since the Bank of England reduced its base lending rate to an historically low 2% on Thursday UK media commentary has been dominated by a ‘will they, won’t they’ analysis of which banks are planning to pass on the full value of the 1% cut to their mortgage customers and which are not.  At the time of writing, those passing on the full rate reduction are in the minority but it is clear that this issue will be played out in the court of public opinion as much as behind the closed boardroom doors of our leading mortgage providers.  After all, public (and Government) pressure has already seen two of our leading lenders – Nationwide and Halifax – remove the ‘collars’ that were designed to prevent their bare-rate tracker products from dropping below a certain minimum level. 

With few outside friends it is a brave bank CEO that is prepared to stand up to the inevitable criticism that will follow any foot dragging on this issue, however solid arguments about protecting savings rates or the need to repair a broken balance sheet may be.  Regaining control of the economics of their business will be an uphill journey.

I have written in the past about how the banks – particularly those that have been part of recent Government bail-out measures – need to accept the new reality of their circumstances, and recently consolidated these thoughts into a contribution to a wider series of essays published by Edelman to coincide with the ‘Outlook 2009′ event referred to in my previous post.  The full text of my contribution is below, and the complete Edelman document, titled ‘Public Engagement in the Conversation Age’, can be accessed here.

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No industry has felt the cold blast of the credit crunch more than the Financial Services sector.  Whilst the turmoil and upheaval in the global Banking system has dominated recent newspaper headlines,the industry in general is experiencing a collective collapse in Trust and confidence which has also affected Insurance companies, Asset Managers and Hedge Funds in equal measure. Having gradually reduced to no more than a ‘hygiene factor’, suddenly Trust is once again a commodity to be cherished, protected and preserved.

To some extent the ’sudden’ collapse of Trust in the Banking system – and indeed in our established Financial Institutions generally – has been long coming. For the last decade, Edelman’s Trust Barometer has tracked the growth in credibility of peer-to-peer Communications at the expense of the top-down, CEO-led programme and, what we see today, is merely a practical application of that trend. What is beyond dispute is that Trust in the Banking industry has all but melted away – not just amongst consumers but most damagingly (and most tellingly) within the market itself.

This collapse in Trust has coincided with – indeed perhaps even been caused and/or exacerbated by – the new Digital Democracy we reference elsewhere. With the internet placing power in the hands of the Citizen as never before, this is the first recession of the true Digital Age. The challenge the industry now faces is to overcome the current negative perceptions and re-build Trust.

The first lesson that needs to be heeded is that life, as we have always known it for the banks, has changed forever. So far as the media is concerned, every pound the banks spend comes out of ‘our’ pockets – in the current climate the normal rules of Business no longer apply and the banks’ usual licence to operate has, effectively, been suspended.

Events which were fully justifiable in the past (and can arguably still be justified now) have to be considered in the light of a new reality – that ‘our’ money is paying for them.  HBoS saw this principle in action in early November when it was fiercely criticised in the media for hosting two staff events. The reality is that the banks do still need to motivate and reward their staff. But the perception of massed ranks of bankers indulging in lavish celebrations as we head into a recession, and as the taxpayer digs deep to bail them out, is one that the banks have to take great care not to foster.

What of the rest of the Financial Services industry? Sitting next to the banks on the naughty step, and finding itself cast in the unwelcome role of chief scapegoat for the collapse of the Financial world as we previously knew it, is the Hedge Fund industry. Now most informed observers recognise that Hedge Funds play an important role in the Financial Markets.  Furthermore, the leading participants in the industry are some of the UK’s most active philanthropists, contributing substantial sums to charities in both the UK and globally.

But with a few notable exceptions, the industry has on the whole been poor at engaging with a wider group of external stakeholders. This has allowed prejudice to become accepted fact, with the result that the industry now finds itself short of friends when they are most needed. There is a clear risk of an excessive regulatory response to recent issues, borne of the ’something must be done’ school of policymaking, that could curtail the activities of one of our most innovative financial industries.  Once again, negative perceptions lead reality.

Set alongside the Banking sector and the Hedge Fund industry, the insurers have – with the very notable exception of AIG in the US – largely managed to avoid the most visible impact, and consequently the high profile fallout, of the Credit Crunch. The impact of the collapse in equities will undoubtedly feed through into the pensions sector but, again, to date this industry has managed to remain largely – though not exclusively – on the periphery of the debate.

The Financial Services industry finds itself at a key point in its continuing development. There is little doubt that the next twelve months are going to present major challenges to Communicators in the sector but this is not the time to adopt a bunker mentality. It is clear that stakeholders will be asking searching questions of our banks, Insurers and those that manage the wealth of the nation.

The organisations that emerge strongest from the economic downturn will be those that are most able to reach out to, and empathise with, the man or woman in the street. They will recognise the role of the internet and social media and adapt their communications strategies to address these channels effectively. And they will embrace the changing nature of Communications and take advantage of the collapse in traditional hierarchies.

The restoration of Trust between Financial Institutions and their customers is not something that can be achieved overnight. Management must be prepared to invest not only financially but in particular in devoting time to repairing relationships. It is well known that ‘nature abhors a vacuum’ and, in the absence of any engagement from the industry or individual firms, our new breed of Citizen Consumers will draw their own conclusions.

Title from the Beatles

Do You Know Where You’re Going To…..

 

OK – first some self-justification. I realise that this song doesn’t exactly enhance my credentials as the wild man of PR.  Unfortunately it’s the most appropriate one I could come up with in what is a necessarily short space of time and, having set out the parameters for titles myself – most importantly that they should have some relevance to the subject about which I am actually writing – I feel I need to adhere to them.  Anyone who wants to suggest something better should feel free to do so – I will happily credit better minds than mine.

Which enables me to segue neatly into today’s post. One of the more fortunate aspects of my professional life is that I am sometimes lucky enough to get access to the thoughts and opinions of some very wise people.  This morning at Edelman’s London head office we hosted an ‘Outlook 2009′ event featuring a panel of some of the most high profile commentators on business and the global economy; Vince Cable, Deputy Leader of the Liberal Democrats and the people’s politician; David Frost, Director General of the British Chambers of Commerce, representing the heart and soul of UK industry; Jim O’Neill, Head of Global Economic Research at Goldman Sachs and the man who invented the BRIC acronym; and John Waples, City and Business Editor at the Sunday Times, the UK’s leading Sunday broadsheet.  The event was excellently and expertly facilitated by former Sunday Telegraph editor, now Barclays Bank non-executive director, Patience Wheatcroft in front of a standing-room only audience of Edelman clients and contacts. 

The views of the panel on prospects for the next twelve months were pretty downbeat with all of them agreeing that 2009 will be a very difficult year.  Edelman’s website will shortly be carrying a brief summary of the content by Patience Wheatcroft and a video of the proceedings in full later today, but a taste of some of the comments of our experts includes:

• Jim O’Neill revealing that Goldman Sachs has reduced its forecasts for UK growth in 2009 from 2.6% in September to just 1% now, and is forecasting a drop of 5% in output in the US in the fourth quarter of 2008;
• John Waples arguing that after the Lloyds TSB/HBoS merger it is now possible to ‘think the unthinkable’ in business terms – what price a Sainsbury/M&S merger, or BP/Exxon?;
• David Frost saying that despite the entreaties and assurances of Government his members are still experiencing problems securing funding and finance from the high street banks preventing them from being part of the solution as opposed to part of the problem;
• Vince Cable pointing out the inconsistencies the economic turmoil has thrown up – bank shareholders wiped out, while bank depositors are protected; elderly people seeing the equity in their homes collapse, while those with large mortgages are protected by the Government.

Fascinating stuff.  And very scary.

 Title by Diana Ross

Killer Queen…

It’s an indication of the constantly changing state of the financial world – and the Government’s introduction in draft form in May of many of the bills presented – that today’s Queen’s Speech has been largely shrugged off in the City.    While there were certainly murmurs of discontent from business groups such as the British Retail Consortium and the British Chambers of Commerce over the increasing burden of taxation and red tape, interest today has centred as much on what wasn’t in the bill as what was with Business Secretary Lord Mandelson’s confirmation this morning that the Government would be extending flexible working rights for 4.5m working parents with children as old as 16 also falling foul of the BRC and the BCC.

After the events of the last six months it would have been a shock not to see the Government taking steps to address issues that have arisen in the banking sector, however, and the banking Bill, which is already on its way through the House of Commons, addresses a number of high profile issues.  These include a strengthening of the Bank of England’s hand with the creation of a new Financial Stability Committee; the establishment of a new regime in which the Bank has greater latitude to support any bank that does find itself in trouble (for instance by providing short-term financial support  without making this public); and a Special Resolution Regime that will allow the authorities ultimately to sell a failing bank to another bank; nationalise it; or to transfer it to a ‘bridge bank’ controlled by the Bank of England.

Savers are also the beneficiaries of additional support from the Government with a commitment to legislation that will “ensure fairer and more secure protection for bank depositors”.  In addition there will be a new savings scheme for people on low incomes that will see the government add 50 pence to every £1 saved, up to a maximum of £300 after the account-holder has been saving for two years.

With the Government shying away from anything that could depress the economy, however, and the legislative programme in general very thin on the ground today’s speech very much feels like tinkering at the edges.  With a clear view of the direction of economic policy having been given in last week’s Pre-Budget Report anyone looking for further enlightenment today will probably be disappointed.

This article also appears in Edelman Public Affairs’ summary of the Queens speech which can be found here.

Title by Queen

Heaven knows I’m miserable now…

A week that began with a lukewarm reception for the fiscal stimulus package contained in Alistair Darling’s pre-budget report seems set to end with our beaten and battered economy no closer to getting itself up off the canvas.   In London today more than 30 stores have staged special 7am openings in an attempt to ensure that they don’t follow the slide of Woolworths and MFI into administration but it’s clear that the cumulative effect of one economic shock after another has eroded consumer confidence in a very severe way.   To return (briefly) to a favourite theme, it’s now no longer possible to establish the difference between perception and reality – they are both pretty dire.

The collapse of Woolies has been laid at the door of its bankers who, despite the 11th hour intervention of the Government, would not sign up to the beleaguered retailer’s business recovery plan.  It looks as though the assurances allegedly wrung from the banking industry to support business following the taxpayers’ £37bn bail out of three of its major players have proved to be unreliable.  Hence the renewed threat from Mr Darling of full nationalisation of one or more of the (non) lenders – presumably, in the words of Voltaire, “pour encourager les autres“.  Perhaps with the Government now left owning 57.9% of RBS after the bank’s emergency rights issue it will be able to do a better job of things itself.

It’s worth taking a step back and pondering the furore caused by Mr Darling’s remarks.  Mainly because there wasn’t any.  Not a word.  No right wing politicians bemoaning “this intolerable interference in the free market economy”.  Which just shows what a mess we are in.  When the US Government declined to step in and save Lehman Brothers the global prevailing view was that this was the right decision.  With the benefit of hindsight, however, it is now generally agreed that this inaction was perhaps the single biggest aggravating factor in this latest, most virulent phase of the downturn.

It seems that we are all suddenly fans of state ownership.

Which begs the question – what next?  Is the banking sector special because of its role as chief oiler of the wheels of industry?  Well, yes…it probably is to a point.  But what about other industries?  I wrote last week about the special pleading of the US car industry, responsible for millions of jobs in the States.  Is the retail sector also a special case, with 30,000 jobs now under threat at Woolworths potentially the tip of the iceberg?  And, on a related point, is there any value in cutting taxes to create disposable income if consumers are too scarred by events , and too scared for their jobs, to  spend their extra cash?

What about the airlines?   The sight of Sir Stelios warning yesterday against Easyjet’s plans to order 109 new short-haul jets for delivery over the next four years underlines the thin margins in operation within that industry.  I travelled to and from Milan yesterday on a crammed-to-the-rafters BA flight - a plane jam packed because Alitalia, Italy’s crisis-hit flag carrier, cancelled both my pre-booked flights at 3pm on Wednesday afternoon, fourteen hours before I was due to depart.   Good news for BA on this occasion, but again a sign of another industry in crisis.

It all just serves to underline the importance of sentiment to business.  Which is where those of us in the communications industry really earn our corn.  You can’t ignore the economic facts of life but within these margins there will be winners and losers and the successful firms will be the ones that are able to listen to their customers and clients and adapt their offer to these straightened times.  At a time like this, courage is an essential element in business, and no less so in business communications.

Post title from The Smiths

Brown Sugar…

And there it was gone.  The most eagerly anticipated – and heavily trailed – pre budget report since PBRs began (admittedly only ten years ago) has taken place against a backdrop of political discord and disagreement between the three main UK parties.  The Government has moved in a single leap from Prudence to Profligacy, hoping that an extra tenner or so off that £500 Plasma TV will be the difference between a sale and no sale and will get the cash tills ringing again in the run up to Christmas.  In the meantime, taxes and national insurance are set to rise in April 2011 to fund this economic largesse.  Edelman’s Public Affairs team has produced an excellent summary of the PBR which you can access here.

It’s clear from the subdued nature of the Labour benches as the Chancellor delivered his statement  that the borrowing figures were a huge, sobering shock and it has to be doubted whether today’s package of measures will really be enough to get people spending again, rather than saving anything they do get to guard against the uncertain nature of the job market.  Shadow Chancellor George Osborne’s comment that the statement is “all about the political cycle and not the economic cycle” echoes my own comments on Friday’s blog. 

As usual, the Liberal Democrats’ Vince Cable seems to have cornered the market in common sense from a political perspective, claiming that income tax rather than VAT cuts would have been more effective in stimulating the economy and would have more clearly targeted those in most need of help – after all, VAT is already zero rated on most essentials.

Still, there is now an ocean of clear water between the various parties approach to management of the economy which is something to be grateful for as we head towards the end-game in this particular parliament; the level of financial redistribution this budget implies positions it as an ‘old labour’ response to ‘new labour’ problems.  But with the Tories in particular having to date seemed leaden-footed in their response to the unfolding financial crisis, the issue now is whose medicine is the most effective as we move from the intensive care unit to the recovery room.

Title by the Rolling Stones

Dazed and confused…

Today’s Daily Mail front page lead caught my eye.  Under the headline ‘Banks: Now it gets Ugly’ it says that “Alistair Darling is so exasperated by the ‘moral failure’ of banks to help small firms and families that he is poised to toughen the law.”  Apparently the particular target of the Chancellor’s ire is those banks that signed up to the Government’s bail-out package last month, which, according to the reports, are not meeting the expectations of their new Government paymasters.

“Moral failure” is an interesting premise on which to base potential legislation in the banking sector, particularly if this is effectively code for stimulating lending activity.  Because isn’t it the bank’s past lax lending policies, in particular in the sub-prime mortgage sector, that brought us to this particular pass, and aren’t we just running the risk of repeating that error here?  I’m pretty sure that someone once said the definition of insanity is doing the same thing over and over again and expecting a different result.

What we have here is a situation where the banks are being positioned as the primary architects of all our current financial ills.  Now don’t get me wrong – I’m not here to act as an apologist for the shortcomings of the banking sector.  Anyone thinking I might have a rose-tinted view only needs to read my wife’s account here of the shambles that befell our own financial arrangements when we tried to get a temporary increase to an overdraft to pay for some home improvements.   On the whole the industry’s public reponse to the current crisis has been ineffective, with RBS’s belated apology to shareholders yesterday the bare minimum necessary to begin to rebuild trust.

I just can’t help but feel, however, that with the heavily trailed fiscal stimulus package expected to be unveiled in Monday’s pre-budget report we are scrabbling around to kick start the economy by any means possible, and without regard for the future implications of current measures.  And the driving force for all of this activity is not so much the urgent needs of the British householder/consumer/small business but the sound of the clock ticking loudly down towards the next general election, now little more than 18 months away and the need for the Government to engineer an economic recovery within that period if it is to give itself a fighting chance of winning.

Title by Led Zeppelin

Cars

On one level, the current debate over the fate of the Big 3 Detroit car companies – and specifically whether the US Government should extend a further $25bn of public money to help the industry weather its own current financial crisis – puts me in mind of the “what have the Roman’s ever done for us” sketch from Monty Python’s Life of Brian.  After all, not only do the three companies in question – GM, Ford and Chrysler – account for around 240,000 direct jobs but it’s estimated that each of these jobs accounts for another seven employed indirectly in the various businesses that support the automotive industry. 

So it sounds like the industry is pretty central to the economic health and welfare of the US.  Yet despite this, the noises coming out of the States suggest that those arguing in favour of forcing these giant manufacturers into Chapter 11 Bankruptcy are gaining the upper hand.  It’s as if the catastrophic bankruptcy of Lehman Brothers, which by common consent is now regarded as the catalyst for the total meltdown we have seen in the banking sector, never happened.   

While I suspect that some form of compromise will be reached by which at least publicly-quoted Ford and GM – if not Private Equity-owned Chrysler – do get access to Government money, the fact that this debate is even taking place shows how in difficult times negative perceptions can get in the way of business or social logic.  The motor industry in the US is seen by many as having been slow to grasp the nettle of change and address issues of environmental impact, with the result that cross-party goodwill is in short supply.  If, as I suspect, Government money is committed to the industry it seems inevitable that – as with the UK Government’s bail-out of its high street banks – this seems almost certain to come with pre-conditions that require the car makers to address these perceived shortcomings.

Yet again the lesson here is that the rules have changed for business in general and, in particular, for organisations and industries that are looking to their Governments to provide financial support to help them navigate the recession.  The (understandable) price for financial support will be an inevitable reduction in management control and a need to stand-up to far closer public scrutiny. 

Footnote: I raised in my last entry how the new reality of the financial services sector means that the popular media will closely scrutinise every penny the banks spend, so it was not too surprising to see HBoS and RBS exposed in the News of the World and Mail on Sunday respectively this weekend for hosting recent staff and customer events. This focus also extends to the US as this entry from my boss Richard Edelman’s blog explains.

Title by Gary Numan

Suspicious minds…

There is no situation so bad that can’t be made even worse with a “lavish staff blowout” as yesterday’s News of the World front page story about HBoS’s Annual Star Gala event, which took place in Edinburgh last week, and the Sunday Mail’s exclusive about the bank’s planned December event in Birmingham for 1,500 mortgage staff proved.  Having been freshly rescued by the taxpayer and heading towards a life-saving (although potentially job-threatening) merger with Lloyds TSB, HBoS’s decision to press ahead with a high profile staff bash was manna from heaven in a media environment where every pound spent comes out of ‘our’ pockets and every senior banker is a heartless fat cat.

HBoS did try to defend its position, telling the Sunday Mail that as well as briefing its staff on plans for the mortgage business its Birmingham event will be “a thank you for all the hard work during what has been a challenging year for everybody.”  A spokesman told the News of the World, meanwhile, that the Edinburgh event cost “a modest amount” – estimated by the newspaper to be £330,000. 

Predictably these arguments cut little ice with the media.   What the banking industry in general, and the banks that have participated in the Government’s bail-out in particular, needs to appreciate is that in the current climate the normal rules of business no longer apply; their usual licence to operate has, effectively, been suspended.  When it comes to spending money, the banks need to be above suspicion, just like Caesar’s wife.   Events which were fully justifiable in the past (and can arguably still be justified now) have to be considered in the light of a new reality – that ‘our’ money is paying for them. 

There is an echo in all of this of a previous fat cat scandal – and possibly some lessons to be learned as well.  Back in the mid-1990’s the privatised utilities came under fire for much the same reasons as HBoS now finds itself in the spotlight – in this case for cutting back jobs and staff perks while the management continued to enjoy the trappings of executive life.   The lightning conductor for criticism of these businesses was Cedric Brown, chief executive of the relatively recently privatised British Gas. 

In March 1995 I was head of PR for NatWest Bank’s UK operations and, as part of our ongoing hospitality programme (!) I entertained a number of media contacts at an England vs Scotland rugby international at Twickenham.  One of my guests was Clinton Manning of the Daily Mirror (now City and Business editor of the Mirror).  We were settling down to watch the match when lo and behold Cedric Brown himself sat down a couple of rows in front of us. 

Clinton took out his camera and snapped a few shots of Cedric, then after the match had finished wandered round asking a few questions.  The outcome was the following article in the Mirror the next Tuesday, under the headline of ‘Cedric’s £13,000 blowout’:

‘GAS chief Cedric Brown has put the boot into his staff – with a £13,000 rugby beano for VIPs.  The £475,000-a-year boss hosted a party for around 20 guests at the England-Scotland match in London on Saturday. The company paid #650 a head for the tickets-and-hospitality packages.

Last night, union leaders accused 60-year-old Mr Brown of insulting his workforce at a time of job cuts and pay curbs. UNISON public service union chief Rodney Bickerstaffe fumed: “This is gross hypocrisy.  Plush perks for the bosses when workers risk losing their jobs and have been told they might not receive pay rises cannot be justified.”

But British Gas defended the Twickenham bash as “an enjoyable way to do business.”‘

In the end Cedric was effectively forced out of his job by institutional pressure.  As with BG so with HBoS and all the banks, the issue is one of perception and reality.  The reality is that the banks do still need to motivate and reward their staff.  But the perception of massed ranks of bankers indulging in lavish celebrations as we head into a recession and as the taxpayer digs deep to bail them out is one that the banks have to take great care not to foster.

 

Title from the King.

Down down…

Is the Governor of the Bank of England sending a signal to the banks with today’s shock 1.5% reduction in interest rates?  This is the view of my colleague Susan Eastoe, Edelman’s Deputy CEO and Public Affairs guru who says that in dropping base rates to their lowest point since 1955 it looks like Mervyn and Co are telling the banks: “if you won’t reduce your rates we’re going to do it for you”.   I think Susan is right, but it’s clear from early comment within the banking industry that, notwithstanding this action and the comments of Messrs Mandelson and Brown in the last three days, there will be resistance from many banks to the idea of passing on the full drop in rates to mortgage customers.   

In fairness to the banks – not an expression I expect to be using too frequently – the Bank of England rate is only one element to be taken into account when deciding where they pitch their rates.  And many of them will in any case be more focused on shoring up their own financial position than that of their customers.  But this has the potential to become another huge PR issue for the industry, which will need to be on the front foot and articulating its position very loudly and very clearly if it is to avoid another humiliating retreat at the hands of the Daily Mail.

Footnote: bearing in mind my comments on Tuesday about those banks that have participated in the Government bail out now being at the mercy of “Government whim and political convenience”, two items of particular note struck me today.  First, it has been reported that ahead of the announcement Northern Rock and Lloyds TSB withdrew all their tracker mortgages.  And, subsequent to the announcement of the rate cut, I note that the first bank out of the blocks and announcing that it would be implementing the rate cut in full was Lloyds TSB.  More nudge nudge, wink wink policymaking?

Headline courtesy of Status Quo