Industry news

The chances of the US federal reserve raising interest rates at the next meeting have been dealt a blow. Lael Brainard, a cautious voice on the federal open market committee explained that the case for raising rates was now “less compelling”. Low inflation, ‘slack’ in the labour market and weak demand from abroad were all cited as reasons for the delay. However other committee members are up for a rate rise creating a bit of uncertainty among business and markets as to the direction of US monetary policy.

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Deputy Governor Minouche Shafik is leaving the Bank of England at the start of 2017. She has been with the bank since 2014 and will also leave the Monetary Policy Committee and Financial Policy Committee when she departs for a new job at the London School of Economics. Bank of England governor, Mark Carney, said: “She helped drive vital reforms on the domestic and international stages. This has been alongside the invaluable insight she brings to all three main policy committees of the bank and the inspirational leadership she gives to her colleagues”.

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Related news: Governor Defends Brexit Policy

The Bank of England’s new bond buying programme will benefit electricity companies the most according to documents published by the bank yesterday. The £10 billion worth of debt the bank will be buying will be spread over many industries but the bank expects nearly a quarter will go the electricity firms. The package will get underway on the 27th of September in the hope of encouraging firms to borrow in sterling and reduce borrowing costs, however to be eligible, a firm must ‘make a material contribution’ to the UK economy and issue investment grade debt. This comes as news arrives that UK inflation in the year to August was 0.6%, slightly below analyst predictions which gives the governor more evidence to support the bond buying scheme.

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Related news: Governor Defends Brexit Policy

Standard & Poor’s, the ratings agency, has warned that the bounce in economic performance in August may be a ‘mirage’ as uncertainty around Brexit leads to firms delaying investment and hiring. S&P warned that the rebound in August only recovered what was lost in July and that the long-term outlook for the UK economy remained cloudy. S&P claimed that the cut in interest rates may have caused a reaction that boosted the economy in the short term. The S&P noted that with many sectors cancelling losses in July with gains in August, the UK gave the picture of a “broadly stagnating” economy.

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Related news: Studies Reveal Brexit Aftermath

The Coal Authority, the body which manages the legacy of past coal mining in Britain, is moving supplier sourcing, management and purchasing to the cloud. With a focus on improving spend visibility and supplier compliance across its £30 million annual expenditure. web3 will digitise the entire Source to Pay process, from sourcing suppliers through to raising purchase orders and e-invoices, to issuing payment. Paul Frammingham, Chief Finance and Information Officer for the Coal Authority, said: “We wanted to make it as easy as possible for our colleagues to buy from approved suppliers at the right price. So we turned to Wax Digital’s web3 technology to meet our requirements.”

For more information on Wax Digital and web3, visit www.waxdigital.com

For more information on the Coal Authority visit www.gov.uk/coalauthority

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Brexit has only minor effect on the economy according to a recent study by BDO. The study by the accountancy firm notes that business confidence has jumped back in August after hitting a three year low in July but the firm believes that a slide into recession is now ‘not likely’, however a slowdown in economic activity appears to be occurring. Also today, the British Chamber of Commerce downgraded its UK growth forecast from 2.2% to 1.8% in 2016 citing uncertainty in investment.

For more information on the BDO study, click here.

For more information on the BCC study, click here.

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Outsourcing in the UK is booming with a recent update from the arvato Outsourcing Index which £3.91 billion worth of contracts being signed in the first 6 months of the year. This is nearly a 20% increase year on year while local government spending on outsourcing has nearly doubled in the same period. However, thanks to Brexit, terms have changed and the industry and risk management must adapt to the changes that we will learn about over the next two years.

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Related news: Studies Reveal Brexit Aftermath, Outsourcing and bots post-Brexit

Finance departments are most at risk from insider threats reports computing.co.uk. The survey also suggested IT and sales and marketing were also a concern for employers while legal and the supply chain were considered more guarded against threats. 83% of respondents believed that a lack of understanding of data security issues lay behind the issue. However, 60% of respondents claimed to be satisfied by the balance struck by companies between security and freedom.

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The University of California has come under siege after its decision to offshore about 80 jobs in its IT sector. The work will now be done by HCL of India after a $50 million contract was set up with the company to provide infrastructure and network related services. Peter Eckstein, president of the IEEE-USA (an engineering association) has branded the move as another example of ‘profit before people’. With American jobs and employment being a key policy area for the upcoming election, it is unlikely to be the last story about outsourcing in the USA in the next few months.

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The ‘Future of Outsourcing’ report was an exciting read for the industry, offering up insight and analysis on the future and direction of outsourcing. Covering big news, such as the reaction to Brexit and reports on the future of sectors like robotics, there was a lot of content to be excited about. The report suggests plenty of opportunity in outsourcing across a range of sectors and how attitudes in business and employment are adapting to the digital world.

If you missed the paper supplement but want to read more, click here.

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