Managing director Alan Hawkins provides diyweek.net with his take on the economic situation, the interest rate cut and the increase to the National Minimum Wage.
Earlier this week the Bank of England announced a 0.50% cut to interest rates. Many businesses have welcomed the move but the benefits are yet to filter down to the high street.

"The surprise half percent cut in interest rates is overdue and welcome, but only a half-hearted gesture, when what we needed was a full-blooded full percentage point reduction", said Alan Hawkins, BHF Group managing director.

While welcoming the move, mirrored by the US Federal Reserve, the European Central Bank and the central banks of Canada and Sweden and Switzerland, Hawkins sounded a note of caution: "If this doesn't feed through to the benefit of real businesses on the ground then it will have been pointless."

He went on to remind central bankers that the headline bank rate tells only half the story. "In the UK the Bank base rate is no longer the benchmark for rates in the real economy. Last time the Bank rate went down, on the more usual Thursday, the main inter-bank lending rate went up on the Friday."

Workers across the UK benefited from a 3.8% rise in the Minimum Wage this month. Some employer groups fear that, with the current economic climate, the increase will threaten jobs as businesses struggle to cope with rising costs.

Mr Hawkins said: "BHF Group is pleased that this year's increase in the national minimum wage is lower than usual at around 3.8%, but this is still high compared with what many workers will be achieving in the next pay round.

"Of course, BHF's concerns go back to the inception of national minimum wage, which has seen a 63% increase in the adult rate since its introduction in 1999. Ultimately, and especially in the current economic climate, retailers have to balance to an overall budget, which may mean reducing staff hours or, in the worst cases, having to consider redundancy.

He concluded: "The knock-on effect for differentials with other employers earning slightly above the minimum rate cannot be ignored, nor can the fact that the national minimum wage rate has no regional adjustment, without taking note of local conditions".