Pulse Fromtheheart of thebusiness worl d northEAst
OCT-NOV2026
Business owners: your mental healthmatters too 1
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Regional news
Business in focus
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Inside this edition Click a headline to jump to an art icle
Feature Business owners: your mental health matters too
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News Freeze from the Bank of England as UK economy risks feeling the chill
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Focus How AI could make us work even harder The autonomy paradox: how more work freedom can leave you feeling powerless Why government debt is growing: public spending explained
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Regional Leeds architect backs future of housing by building own low-energy home Your Event Solutions moves forward as ALTOUR
Pulse
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by 3
Business owners: your m 4
Feat Feat ure ure
mental health matters too 4
By Advance Copy 5
Feat ure
News
When we hear about mental health in the
Because everything is on you. Sure, it?s what
workplace, it?s usually about ways to support
you sign up for in this game, but even the
staff. Like how you need to take it seriously,
most driven person has to admit: it?s a lot,
to follow proper policies and procedures,
isn?t it?
and to help your people through their issues
All that pressure. Long days. Short sleeps.
as best you can.
And you can add home and family life into
But what about you, the small business
the mix, too.
owner? Who?s there for you and your mental
Whether you?re starting your business or
health? Who?s giving you support and
growing it, nothing seems to let up. It?s
advice?
always more, more, more... and then some
After all, you?re clearly not the kind of boss
more. That?s the life of an entrepreneur.
who sits out of sight of your team, twiddling
When you think about it, it?s pretty amazing
your thumbs while everyone else gets on
what you can achieve, isn?t it? But that
with the work (and if you are, please let us
doesn?t mean it?s easy. And it doesn?t mean
know how you?ve managed that). No, you
that it comes without consequences.
wear many hats. You?re the HR department. You manage the finances. You?re marketing,
Survey
research and development. You?re many
According to Simply Business in
roles and more to keep your business not
collaboration with Mental Health at Work (a
just going ? but improving. And if something
programme by the charity Mind), 56% of
goes wrong?
small business owners said they?ve had poor
You better believe that?s on you.
mental health at some point over the
6
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Feat ure
previous year. The biggest issues they
needs time to be restored. When it doesn?t,
reported include anxiety (59%), financial
it?s not just mentally taxing, it hurts you
worries (41%), depression (38%) and
physically. And that?s burnout.
loneliness (22%).
Burnout
It seems like the weight of responsibility as
Burnout is difficult to describe. But if you?ve
a business owner is the major cause of those
had it, you know it. The way it affects people
problems, working far more hours than
is different from person to person, but it?s a
anyone else ? way above the national
form of chronic stress that takes hold over
average ? yet taking fewer days?annual
extended periods. You might not even notice
leave. In fact, 73% of respondents said
you?re experiencing it. For example, as an
they?ve haven?t even taken 20 days off (some
entrepreneur, you may be used to pushing
Americans reading may shrug their shoulder
forward, working hard, skipping weekends
at that one).
and holidays, but gradually, a form of
Even if you?re someone who thrives from
detachment from your work may drift in. So,
being ?on the go?all the time, energy isn?t an
you?re doing the work while also being
endless resource. It gets depleted, and it
absent and feeling tired with no way of 8
Feat ure News Feat ure
turning it around.
up control, taking on the bulk of the work
On the other hand, you could hit a wall and
and feeling like anything important is their
suddenly find yourself unable to get out of
priority. But if you only delegate the ?easy?
bed for days on end, foggy brained and
jobs or the ones you like to your team, that
heavy bodied, as your body shuts down and
leaves you with all the stress-causing tasks.
forces you to rest and recover whether you
And if someone in your team has a problem,
have time for it or not. And there are
who?s it then on to sort that out?
a host of other possible ways burnout can
You, of course.
affect you.
That?s a case of building a team with
Which is why for business owners like you,
responsibility but with no authority. Then,
it?s important to recognise stresses early and
it?s on you to coach the team to be able to
fix the root causes now, rather than try to
do the work properly. It might feel easier to
treat the serious mental and physical
either give them the solutions or think, ?I?ll
symptoms later.
just do it myself,? but doing so adds to your mental capacity, which could be close to or
Cont rol Business owners often find it difficult to give
8 over its limit. It?s easy for staff to fall into a
state of ?learned helplessness?where they 9
Regional Feat ure
rely on their boss ? that is, you ? to fix
burnt out.
everything. That?s not the way it should be.
St ress
So instead, it?s guiding the team to find the It seems that the UK is a stressed workforce.
solutions to problems themselves,
For those who are well into their careers, it?s
freeing you up for a more focused,
frustrating to work in an economy that has
manageable workload.
stagnated since pretty much the 2008 Of course, that?s just one example of a
financial crash. It seems like there is more
limitless number of scenarios you might
work to do than ever, but without the wages
face, and while it might sound obvious, it?s
to reflect that ? plateauing as costs rise and
always important to remember to set
rise with inflation. As Pulse covered in the
boundaries by learning to say no. Rember to
last edition, that seems likely to get worse.
delegate, delegate, and delegate some more.
Much worse.
Outsource if you need expert support. And take breaks and holidays ? your body and mind (and business) will thank you for it.
And then there are those at the start of their careers. In 2024, the BBC reported that for the first time ever, more younger people
Remember, your work won't thrive if you're
than older people were out of work due to By Advance Copy 10
Feat ure Regional
their mental health.
levels), but the UK?s stagnating wages, living
Meanwhile, the climate today for those who
standards and rising costs make things feel
are looking for a job is dismal. There is
worse than before. But humans have never
currently little demand for employers to take
had to face the levels of information and
on the least-skilled levels of staff to train
stimulation we have now through the
them up. Plus, the recent increase in
internet and social media, which are
minimum wage for 18-20s as well as
designed to keep users hooked
employer?s national insurance have both
through spiking our cortisol ? AKA the
raised the cost of hiring, especially in
stress hormone.
sectors like hospitality where younger
Add that to the challenges or running a
people normally dominate staff numbers.
business and home life, plus fewer third
You can?t get a job if there aren?t any jobs to
spaces and social interaction as the world
get. And without enough money, mental
migrates further online, it?s no wonder that
health seriously suffers.
poor mental health is so common. But with
Focus
every downturn ? whether societally or individually ? eventually, there?s an upturn.
It?s a strange time. This is the safest and most affluent the West has been in history
If you focus what?s within your control ? by
(and worldwide, poverty is at its lowest ever 10 giving up some control ? and taking the time to care for yourself (especially away from 11
Pr oviding ADR licensed chemical and pow der tr anspor tation since 20 12
074332094394 Pr em ch em lt d@yah oo.co.u k 12
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How AI could make us work even harder Malte Jauch Lecturer in Management and Marketing, University of Essex
NAVEEGOLFUnveils Smart Golf Ecosystem at Alwoodley Golf Club
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Regional Focus Technological progress has taken more than
their jobs might be lost to automation,
its fair share of the workload from humans
research shows they may be inclined to
over the years. Washing machines clean our
increase their efforts as a way of
clothes, tractors plough the fields and
signalling to employers that their labour is
computers sort out the admin.
still valuable.
Meanwhile, economic growth and
My research on the rat racessuggests that
redistribution of wealth means most
this kind of response is to be expected.
workers in industrialised countries do not
Employers must continuously decide whom
need to spend most of their waking hours
to hire, promote or dismiss. In making such
on gainful employment. The 12 hour working
decisions, employers seek to reward
day that was common during the 19th
productivity. But productivity is often hard
century has been largely reduced.
to measure, so employers rely on
So will developments in AI help us gain even
alternatives metrics such as the amount of
more free time?
time spent working.
Not necessarily. In fact, AI might actually
Checking whether a work station is still
cause working hours to increase.
occupied after everyone else has gone home
One reason for this has to do with the
is much easier than assessing the accuracy
effects of AI on people?s bargaining power in
of a complex project. And from a worker?s
the workplace. If workers are fearful that
point of view, increasing the time they spend at work seems like an effective way of
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setting themselves apart from other
Researchers recently found evidence for this,
(apparently less motivated) workers.
noting that workers in AI exposed industries
But when everyone pursues this strategy, it
like financial services and IT are literally
becomes self-defeating. No one gains a
switching off their office lights later than
positional advantage, while everyone
those in less exposed industries.
works more.
Another problem is that employers can
The introduction of AI to workplaces can
overestimate the extent to which AI boosts
turbocharge this dynamic. Existing AI tools
workers?productivity. The availability of AI
have already automated some tasks, like
tools to improve efficiency creates an
data entry, creating an expectation that
expectation among employers that workers
entire roles will be redundant soon.
can do more than they could before in the same amount of time. However, when these
Against this backdrop, the rat race becomes more cut throat. Workers reasonably expect large scale restructurings of their companies
expectations are overblown, they can lead to additional work intensification or longer work hours.
and seek to make sure that they will retain their jobs in the process.
Working nine ?t il? ? Finally, the adoption of AI causes significant 16
Focus
frictions. Established routines are
over AI?s design and implementation is not
overhauled, existing roles change and new
left to employers and large AI firms.
roles are created. Workers must be trained in
It is possible in theory to design and
the use of AI tools and must learn to work
implement AI in ways that improve workers?
alongside them.
skills, enhancing their areas of expertise,
But what makes this particularly challenging
making their workSoph more valuable ia Th e Robot and
is that existing AI tools are continuously
thereby enhancing their bargaining power
being improved and new tools developed at
with employers. An empowered workforce
a rapid pace. All of this places additional
would be able to bargain for favourable
demands on workers?time.
working conditions, including working
It may be sobering to contemplate that AI
time patterns that fit with people?s lives
might not improve our lives by relieving us
and preferences.
from toil. Overwork and burnout might even
And if developers were to prioritise
increase over the coming years.
augmentation and empowerment, AI could
But that situation is by no means inevitable
be the ultimate tool that helps to tackle
or unavoidable ? especially if future control 16 widespread resentment and disenchantment with our working lives. 17 www.paramountmedia.co.uk
Leeds architect backs the futureof housingby buil dingapioneering l ow-energy homeof his own 18
Regional Leeds architect Ian Collins is putting his
Passivhaus expertise within its team and
own design principles to the test by
describes its own approach as?Pract ically
building a pioneering low-energy family
Passive?? taking the best ideas from
home designed to dramatically reduce
Passivhaus and applying them sensibly to
energy use and keep household bills low
real-world projects, whether or not a client
? as millions of UK households prepare
ultimately chooses to pursue formal
for another rise in energy costs.
certification.
The project comes at a timely moment
Ian Collins said:?For us, this is the future of
for homeowners, with Ofgem?s energy
the business and the future of the built
price cap set to rise by four per cent
environment.
from October, taking the typical annual household gas and electricity bill from £1,663 to £1,723. Against that backdrop, the co-founder of Leeds-based Mesh Architects believes the way homes are designed and built
?Buildings use an enormous amount of energy and we think the responsible thing to do is improve their performance wherever we realistically can. ?It doesn?t necessarily mean spending a fortune or completely changing what
can play an increasingly important role in reducing their exposure to high and unpredictable energy costs. Collins is creating a highly energy-efficient home for himself in the city, using Passivhaus principles to demonstrate how intelligent design, insulation and construction can create comfortable homes that require significantly less energy to heat and run. Passivhaus buildings can reduce heating demand by as much as 90 per cent, demonstrating the potential for good design to make a significant difference to a home?s long-term running costs. The project comes as Mesh invests further in its low-energy expertise, recruiting architect Patrick Roobottom as
Light ing & Cont rolsSoph Solut ion ia Th e Robot Provider Offering a t urnkey solut ions for a wide scope of sectors, from init ial consultancy & design t hrough to specificat ion, supply & project management .
the practice responds to growing demand for more sustainable homes and targets further growth. Mesh already has experienced
w w w.ai-ligh t in g.co.u k 18
01925 444735 19
Regional Focus
Soph ia Th e Robot
somebody wants from their home. Often it?s
what that home costs you to live in for the
about making better decisions at the
next 20, 30 or 40 years.?
beginning and having people around the
Collins?own home is providing perhaps the
table who understand how to get those
clearest demonstration yet of that
decisions right.
philosophy and will be officially certified as
?We want Mesh to be at the front of that.
a Passivhaus Low Energy Building.
?And with energy bills continuing to rise, it?s
Having lived in Chapel Allerton for around 30
another reminder that the cost of a home
years, he is building on a tight infill plot
isn?t just what you pay to buy or build it ? it?s
between existing Victorian terraces in the 20 www.paramountmedia.co.uk
Regional Focus
John B Hewitt / Shutterstock.com
neighbourhood he has long called home.
He said: ?There?s sometimes an assumption
The property has been designed to require
that an energy-efficient house has to be a
very little energy to run, using high levels of
box with tiny windows. It absolutely doesn?t.
insulation, carefully positioned glazing,
?First and foremost, it has to be a great place
airtight construction and controlled fresh-air
to live. It needs light, views, spaces that work
ventilation.
for the person living there and those little
But Collins is equally determined that
moments that make a house feel special.
sustainability should not dictate how a home looks or feels.
20 ?Technical performance matters enormously,
but good architecture should also bring you 21
DRL Plant Hire Ltd Unit 5, Chapel Hill Industrial Estate Longridge Preston, PR3 3BU
PLANTHIRE Mobile Cranes Lorries Telehandlers
01772 782925 07970 066559 22
Regional Focus
joy. The exciting part is bringing those two
through planning, finding the right
things together.?
contractors and managing the project during
The project also reflects the personal
construction.
approach Mesh says has helped build much
Meanwhile, 25-year-old Patrick Roobottom,
of its business through recommendation
originally from North Wales, joins from
across Leeds, Harrogate and York.
Wighton Architects in Farsley after
Rather than simply producing drawings and
completing his Masters in Architecture at
stepping away, the practice works with
Leeds Beckett University.
homeowners from the earliest conversations 22 Having recently passed his exams, Patrick is around ideas, budgets and feasibility
now a fully qualified Passivhaus Designer 23
Regional
and will work across Mesh?s residential and
and, while Collins expects the team to grow,
commercial projects, bringing particular
he has no ambition to turn Mesh into a large
expertise in sustainable architecture and
corporate architecture business.
low-energy buildings alongside graphic
Instead, the firm expects to remain at
design and visualisation skills.
around 15 people, allowing Collins and fellow
His appointment forms part of a deliberate
director Martin McWilliams to stay closely
strategy by Mesh to build specialist
involved with clients and projects.
knowledge in an area Collins believes will
?We don?t want to become administrators
become increasingly important to
who never design anything anymore,?
homeowners, developers and the wider
Collins added.
construction sector. ?We enjoy being architects. We want to know The practice currently employs 12 people
the projects, know the clients and bring our 24
Regional own experience to them.?
retail, hospitality, health and fitness, with
Mesh?s growing sustainability portfolio
projects completed across Yorkshire and
includes work at Stainbeck Church, where
further afield.
improvements are targeting reductions of up
For Ian, however, the firm?s future remains
to 85 per cent in heating bills; a major
firmly rooted in Leeds.
low-energy retrofit of a bungalow at West
He said:?I came here 30 years ago not really
Park Road; and a 38-apartment zero-carbon
knowing the city and fell in love with it.
development in Leeds?Climate Innovation ?Leeds has this attitude of getting on with
District.
things and making things happen. People are Alongside residential work, the practice
open, straightforward and friendly, and that?s
delivers architecture for developers and
very much how we want Mesh to operate too.?
commercial clients across sectors including
Source: businessmondays.co.uk
s t e r it e c h e n g in e e r in g @g m a il .c o m
0 79 6 7 8 3 7 3 74 24
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The autonomy paradox: how more freedom at work can leave you feeling powerless
By Andreana Drencheva Senior Lecturer in Entrepreneurship, King's College London
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Focus News You may know the feeling. You?re supposed
Research shows that workers with a high
to have finished work for the day, but later,
degree of autonomy struggle to leave work
during your evening meal, you start mentally
behind at the end of the day. When you have
preparing for tomorrow?s meeting. Or just
control over your job, it can stay on your
having a quick check of your emails while
mind as you run through decisions and
you half watch TV.
ponder unresolved problems. Switching off
You might not mean to, or even want to. It?s
becomes difficult.
just something that you end up doing as part
But the capacity to stop thinking about work
of the price of enjoying some autonomy at
during personal time, what?s known as
work.
?psychological detachment?, is a form of
For a while now, research has claimed that
emotional and cognitive recovery. Without it,
professional autonomy was a good thing.
resources are never fully replenished. The
Being able to decide how, where and when
person who cannot switch off does not just
you worked was considered a major plus in
feel tired ? they go back to work the next day
terms of motivation, job satisfaction and
already running on empty.
overall health.
Autonomy can make this detachment harder
And although those benefits still exist, we
precisely because of the sense of ownership
now know that more autonomy can often
it brings. Responsibility does not respect
also mean more work and less downtime.
working hours, and the person who controls their own job carries it home in a way that
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Focus Regional
Rhyl?s biggest conve And £20m is o the person purely following instructions
but she could not stop. For her, the work and
does not.
the self had become the same thing ? the
Research my colleague and I conducted with
result of a working life in which she alone
40 entrepreneurs ? people whose working
was responsible for every outcome. No
lives are especially autonomous ? reveals
changes to her evening routine could help
another problem arrives when your work and
her separate the two.
identity are entwined. When work becomes
Another told us that she felt guilty if she
bound up in who you are, detachment
separated her business from the rest of
becomes virtually impossible.
her life.
One woman in her 20s told us that she would
Working from everywhere
regularly lie awake at night, unable to stop
Separate research confirms that workers who
thinking about her work. She explained: ?I
have a high degree of autonomy over their
feel the pressure. I am still struggling with
schedules and tasks end up working more,
[what it means] to be an entrepreneur.?
not less. When people have autonomy, they
?Sometimes, I feel I am not giving enough to
repay the trust with extra effort.
the company. Like [at] 11pm, should I just
This is especially the case in situations
work an extra hour and a half ??
where autonomy removes visibility, such as
She understood that this was unsustainable,
when people work from home. 28
Focus News Regional
versation starts now s on the table Being seen less in the workplace can mean
And that problem cannot really be solved
having more to prove. In these situations,
with legislation. Things like the
some workers end up showing their
?right-to-disconnect? or flexible working
commitment by replying quickly, being
policies tend to address intrusions from
online late or taking on extra projects.
outside ? the manager who emails at 9pm, or
The shift to working from home and the
the meeting which clashes with the school
technology which allows it, has brought a big
run.
change in what it means to stop working for
Laws can do nothing about the work
the day.
pressures inside employees?own minds.
When work requires being in a specific place,
Because in many cases, organisations have
the end of the day has a physical logic to it.
not simply given workers more freedom, they
You leave that place
have also given the job of managing that
But for many that shift has gone and been
work onto the worker themselves.
replaced with constant availability.
While autonomy is still worth having, it often
Being reachable shows commitment. Not
comes at a personal cost.
being reachable requires explanation
It can mean less power and more work ?
and justification.
28 which is unacknowledged and unpaid.
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Regional Regional
Cl os e Pr ot ect i on Secur i t y Event Secur i t y I ndust r i al & Commer ci al Sec ur i t y Mobi l e Pat r ol s
Door Super vi s or s Res i dent i al Pr oper t y Secur i t y
www. pr osecl t d. co. uk i nf o@pr osecl t d. co. uk
07876508660
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News
FreezefromtheBank of Engl andas UKeconomy risks feel ingthechil l -
-
The Bank of England has kept Bank
Susannah St reeter, Chief Invest ment
Rate on hold at 3.75%.
St rategist , Wealt h Club
Policymakers voted 6-3 to make no
?Inflation is the fever central bankers want
change, with three members voting for
to bring down, but the Bank of England is
an increase by 0.25 percentage points.
holding off administering the bitter medicine
The Fed moved first, given the US
of an interest rate hike. The UK economy is
economy is growing more robustly,
fragile, and already feeling the chill of
with resilient spending, strong
sluggish growth and a cooling jobs market,
productivity and investment, while
and for now this should offset the risks of
demand remains weaker across the
steamy energy costs being passed easily
UK. 32
Focus through to hotter consumer prices. With shoppers worried about rising borrowing costs and bracing for higher bills to land, they may be less likely to spend if price tags become more expensive. However, the longer the war with Iran continues to rage and keeps crude and gas prices elevated, the greater the chances of a hike later this year and next, especially if data shows consumer price inflation continues to rise. Already three members around the table wanted to hike rates immediately to 4%, and they may well be joined by more if the chronic energy crunch continues. So, a hike on November 5th still looks like a distinct possibility if the bonfires of inflation intensify. The US is a more robust patient, with the spending might of AI hyperscalers pulsing through the veins of the economy, supporting strong job creation, which is why the Fed moved to douse down inflation by hiking rates yesterday. What will t his mean for borrowers
info@litemygroup.co.uk
Equestrian Lighting Specialists www.litemyride.co.uk
and savers? Borrowers shouldn?t assume that today?s hold means mortgage rates will stay frozen. Fixed
01925 594120
mortgage rates are guided by swap rates, which reflect expectations for where interest rates are heading, rather than simply where Bank Rate stands today. With markets still pricing in further rate hikes, swap rates have been pushed higher, and lenders have already been raising some fixed mortgage rates. So even though the policymakers have kept their hands firmly in their pockets for now, borrowers coming off fixed deals could still face higher rates when they remortgage. However, savers could have more time to benefit from higher rates on cash, particularly if the Bank is forced to keep rates elevated for longer,
32
although 33
News Regional the rates on offer will vary as banks adjust
eligible investors to hold semi-liquid
their pricing.?
private market funds within a tax-efficient
Wealt h Club
pension wrapper.
Founded in 2016 by former Hargreaves
Wealth Club is also the UK's largest broker of
Lansdown director Alex Davies, Wealth
Venture Capital Trusts (VCTs) and Enterprise
Club is the UK's leading non-advised
Investment Scheme (EIS) funds.
investment service for high-net-worth and
Today, Wealth Club has more than 70,000
sophisticated investors.
members and 14,200 clients, who have
The company provides access to a wide
invested over £1.8 billion through the
range of tax-efficient, alternative and private
platform. The business has been
market investments. Through the UK's only
profitable since 2017 and has received no
Private Funds Supermarket, sophisticated
external funding.
investors can access private market funds
Headquartered in Bristol, Wealth Club
managed by leading global firms across
employs 43 people and provides wealthier
private equity, private credit, infrastructure
and sophisticated investors with access to
and real assets.
tax-efficient, alternative and private market
In 2025, Wealth Club launched the UK's first
investments alongside expert research
dedicated Private Markets SIPP, enabling
and analysis.
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Regional
Despite the perception that Gen Z is always on their phones, they value sincerity and experience over digital convenience. 34 In-person interactions are your brand's opportunity to stand out 35
News Regional
Your Event Solutions mo After 25 years building one of the most
Together, these strengths enable ALTOUR to
trusted specialist businesses in meetings
address a broader range of needs with
and events, Your Event Solutions (YES) is
greater consistency, visibility and control.
becoming ALTOUR. The transition brings
"YES earned its reputation over 25 years by
together the expertise, creativity and
combining extraordinary creativity with deep
relationships that have defined YES with
care for its clients. This is how we honor that
ALTOUR's award-winning business travel
legacy: not by replacing what YES has built,
management services under one global
but by giving the same talented team a
brand.
larger platform," said Gabe Rizzi, President of
Effective today, YES will move forward as
ALTOUR.
ALTOUR, expanding the support available to
"ALTOUR is already trusted to manage
clients, from managing complex corporate
complex global business travel programs.
travel programs to delivering every stage of
Bringing YES' fully under our brand broadens
an event, including strategy, sourcing,
that partnership, giving clients one
creative development, technology and
accountable global partner for how their
reconciliation. The name is evolving, but the
people travel, meet and connect ? with the
expertise, relationships and care behind it
scale, intelligence and creativity to turn
remain.
every interaction into measurable value.
Clients will continue to benefit from the
Together, we can be as big as our clients
creativity and personal service associated
need us to be and as small and focused as
with YES, now backed by ALTOUR's global
they want us to be."
reach, buying power and technology. 36
News
moves forward as ALTOUR By bringing strategy, sourcing, creative
incredibly proud of what we have built and
development, delivery and reconciliation
excited to see it grow further within ALTOUR,
into one framework, ALTOUR helps clients
opening up new possibilities for our clients
reduce fragmentation, strengthen
without losing the personal touch that has
governance and improve visibility while
always defined YES."
preserving local flexibility.
As YES celebrates its 25thanniversary, this
Powering this model is ALTOUR iQ, ALTOUR's
next step honors the expertise, culture and
connected intelligence and data analytics
client relationships the business has built
platform, which brings event intake,
since its founding. The Halifax office will
approved budgets, delivery, reconciliation
remain a key part of ALTOUR's operations
and experience analytics into one real-time
and the home of the people, culture and
view. This gives clients greater financial
expertise at the heart of YES's Yorkshire
oversight, a complete audit trail and a
heritage. Under ALTOUR, that legacy will
clearer understanding of event impact.
continue as part of an expanded global
"When I founded YES 25 years ago, it was
offering that connects leading business
with a belief that extraordinary events begin
travel management with end-to-end
with understanding people ? their
meetings and events expertise. This broader
ambitions, their brands and the moments
scope allows ALTOUR to support more of the
that matter to them," said Sue Gill, founder
needs surrounding every business
of YES. "That belief, and the care and
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world to bringing them together with 36
purpose. 37
Why the government current public spending 38
Focus
John B Hewitt / Shutterstock.com
nt?s debt is growing: ng pressures explained 38 David McMillan Professor in Finance, University of Stirling
39
Focus Pressure to make cuts in public spending has
have implications across the economy,
intensified in recent weeks, with increased
including for government spending and tax
calls on Prime Minister Andy Burnham to
decisions, investment by firms and mortgage
find savings urgently.
rates for households.
The need to reduce expenditure has become
Spending scrut inised
more pressing as the cost of loans used to
The question is why are yields rising,
pay for services has shot up.
especially for the UK?
With the bill on the government?s borrowing
The level of government debt is at record
rising sharply there is less room for
highs. The US has just passed £29.6 trillion,
manoeuvre in the public finances ahead of
the UK owes around £3 trillion, Japan £6
new Chancellor John Healey?s first budget on
trillion and France over £2.5 trillion.
October 28. These levels of government debt have So, why is this happening, and what is
worried the market and investors because of
causing the interest to grow so quickly?
concerns about the ability of governments to
When governments borrow money, they do
repay the loans. While debt rose through
this by issuing bonds. These are essentially
policy responses to the financial crisis in
IOUs in which the government agrees to pay
2008-09 and the Covid pandemic with little
back the borrowed sum on a certain date,
impact on long-term yields, markets
with interest paid in the meantime. These
are now scrutinising current government
bonds are then bought by a range of
spending closely.
investors, including pension and insurance
This was seen with the Liz Truss
companies, commercial and central banks,
?mini-budget? of September 2022 and when
hedge funds and private investors.
Keir Starmer reversed proposed welfare cuts.
As these bonds change in value according to
In each case, the UK bond yield rose
market fluctuations, their cost to the
noticeably. This is now an issue confronting
government varies. The amount in yields
the new Burnham government that has
paid to investors on the bonds goes up or
already committed to higher spending such
down accordingly, and when the yields rise it
as a VAT cut on energy bills, a bus fare cap, a
is more expensive to issue new bonds.
rough sleeper commitment, council house
Long-term bond yields have risen to
expansion, and an increased defence budget.
multi-decade highs. The UK is not alone in
With the autumn budget coming up, bond
seeing such expensive yields and, therefore,
markets are sending a warning shot to the
high government borrowing costs, but has
UK government to present a plan to control
seen the largest rises among major
spending. The UK has the highest long-term
economies.
bond yields of comparable countries as a
The UK is experiencing a notable switch from
result of a greater sell-off of UK bonds by
low to highest rates. These higher yields
investors worried about a new bout of 40
Focus
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41
government borrowing.
cargo traffic through the Strait of Hormuz
Bond markets are reflecting concerns that
has inflated prices.
the UK government may seek to cover some
The increase in Middle East hostilities has
of its increased spending though higher tax
seen the crude oil price rise around 30% in
rates, which will have a dampening effect on
the last two months, from the high US$60s
future economic growth and employment.
(£44) in early July to near US$90 now. In the
Debt is not the only reason behind the
UK, the effects of higher oil and gas prices
increase in bond yields. Higher inflation and
are seen in the energy price cap, which has
the view that it may remain elevated, largely
recently risen and is expected to do so again.
due to the re-escalation of the Iran conflict
The effect of the Iran conflict and
and associated higher energy costs,
restrictions on cargo passing through the
also contributes.
Strait of Hormuz have broad effects across
The Middle East conflict and restrictions on
fuel, energy, shipping and food prices. This
Guilherme Klein Martins Lecturer in Economics, University of Leeds
42
Focus
drives up inflation and expectations for
billion in debt.
future inflation. This may also lead to
This all adds to the total amount of bond
increases in the Bank of England base
supply, resulting in investors requiring
interest rate, which directly affects
higher returns.
mortgages. Cuts in the rate expected This brings us back to the budget next
at the start of the year will certainly
month. The bond market is sending a clear
not materialise.
signal that the UK needs to control spending There is a further factor driving up bond
given its current level of debt, its exposed
yields. While governments are issuing bonds
position to inflation and global energy prices
to cover spending gaps, technology firms are
plus the uncertain outlook for sustained
also issuing bonds in order to invest in AI,
economic growth.
because they believe that this sector will see large future growth. This year, to date, tech companies have issued US$220
This creates difficult choices for the new 42
prime minister and chancellor. 43
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