Pictured above: Graeme Chaplin, Agent for the Bank of England in the West Midlands

West Midlands businesses met with Graeme Chaplin, the Agent for the Bank of England in the region, to share their experience of current economic conditions. 

Local businesses were speaking with Graeme Chaplin at an event hosted by lawyers of Midlands law firm Challinors, held at the firm's Halesowen office, Challinors White & Billingham, which is both a law practice and the town's largest independent estate agency.

Invited guests included representatives from some of the West Midlands' leading financial institutions, mortgage lenders, debt management specialists, accountants and construction companies, together with Raj Bains, managing partner of Challinors White & Billingham, and Paul Griffiths, Challinors' senior partner based in Birmingham.

All the firms represented agreed that West Midlands businesses are extremely worried about cash flow, which is aggravated by the banks' universal reticence to lend any extra cash to support commercial activities, when for many an injection of additional finances could make a real difference to sustainability and job creation.

In a similar vein, the firms' view is that the Enterprise Finance Guarantee (EFG) scheme and Enterprise Capital Funds (ECFs) has not helped many SME's who were either deemed not to fit the lending criteria, or that the banks demand personal guarantees as well as high arrangement fees, which made them a very difficult option. 

Attendees explained that commodity prices are the biggest challenge for the construction industry, particularly materials such as steel and aggregate, with prices changing within the timeframe from tendering for a project and arriving on site, which has a knock-on effect on the profit margins for construction projects.

Access to finance was voted the single greatest reasons and biggest problem for both consumers/homeowners and businesses in the West Midlands, which in turn is having an affect on the potential for the businesses so far surviving the downturn, to think about generating jobs.

Graeme Chaplin explained that his role as Agent for the Bank of England in West Midlands and Oxfordshire, was to canvass opinion from local businesses on the challenges they are facing, and feed this back to the Bank of England and the Monetary Policy Committee (MPC) for them to consider when making decisions over interest rates. He noted that no one can know what will happen in the future with any certainty.

"So it is the job of the MPC to set interest rates in order to best balance the risks that inflation will turn out either above or below the 2.0% inflation target in the medium term, and to react to the incoming information," explained Graeme Chaplin, "be it economic data or intelligence that the Bank's Agents gathered from business around the country.  As always, the MPC stands ready to do whatever is necessary to meet the 2% inflation target in the medium term."

Challinors White & Billingham's Raj Bains said: "This is the first of our Business Lunch Forums and sparked some interesting discussions, which I feel Graeme found illuminating and educational. I hope we will host further lunchtime discussion events with representatives from other sectors operating across the West Midlands."

Challinors has offices in Birmingham, West Bromwich, Wolverhampton, Halesowen and Nottingham. The firm has 22 partners and over 100 fee earners, and is ranked as one of the top legal firms in the West Midlands, being Number 1 in the Chambers UK Directory in a number of categories, including Clinical Negligence.