Released, 11 October 1998.

The McCannics e-survey, month just ended September 1998

Too Little, Too Late

Interest Rates Cut Too Little, Too Late, Say e-businesses

The most recent McCannics e-survey reveals that only 5 per cent of internet-connected UK businesses expect that the recent (8 October 1998) interest rates cut will have a significant positive effect on their business.

Almost 80 per cent of the 55 survey responses were received within 12 hours of the interest rates cut being announced and questionnaires being sent out. This demonstrates the unique way in which the McCannics e-survey, carried out by e-mail, can address topical issues as quickly as a telephone survey, at a fraction of the cost.

The e-survey has been operating on a pilot scale for a little over a year and is now ready to show its full potential. Organisations which would like to collaborate and can encourage a significant number of UK internet-connected businesses to volunteer to take part in the survey should contact McCannics. Individual UK-based businesses which would like to take part in the survey should send a blank e-mail to volunteer@mccannics.demon.co.uk.

49 per cent of e-businesses expect that the interest rates cut, of 0.25 per cent to 7.25 per cent, will have only a slight positive effect. 44 per cent think that the cut will have no effect on their business and 2 per cent actually believe that it will have a negative effect.

Many of the respondents to the e-survey are exporters and they are particularly worried about the level of sterling, despite recent falls in the exchange rate. One respondent said of the interest rates cut:

"I suspect this is another case of 'too little too late'. It certainly will not stop the recession and I doubt if it will slow it down."

More comments from respondents...

The Bank of England has today
(8 October 1998) cut interest rates
by 0.25 per cent to 7.25 per cent.
What sort of impact do you expect
this to have on your business?

Sales and Prices

Although e-businesses do not appear to think that the recent interest rate cut will have much effect on their businesses, they did report a slight improvement in economic performance during September 1998.

Some 58 per cent of the firms said that their sales were higher in September 1998 than in September 1997 and 27 per cent said that they were lower. The resulting balance (the proportion saying higher minus the proportion saying lower) of +31 per cent was about the same as in April 1998, after four months when the balance has hovered around +20 per cent (see chart).

Some 36 per cent of the firms said that their selling prices were higher in September 1998 than in September 1997 and 16 per cent said that they were lower.

"Was your sales turnover in the month just ended higher, about the same, or lower than in the same month last year?"

Note: Chart shows percentage balances (percentage saying higher minus percentage saying lower). Earlier surveys include late responses and so may differ from figures published elsewhere.

The fifteenth e-survey questionnaire was sent out on 8th October 1998 and by 11th October responses had been received from 55 businesses across the UK.

Owners or managers of businesses in the UK which would like to take part in the survey should send a blank e-mail to: volunteer@mccannics.demon.co.uk

All individual replies will be kept strictly confidential. Only anonymised results will be published, and your e-mail address will not be passed on to any third party.

Details of the sample were included in the first survey.

E-mail us with comments, queries or suggestions for future topical questions at: esurvey@mccannics.co.uk

e-survey: