Outlook For moneysupermarket.com, the price comparison site, the competition is tough: those darned meerkats, the public face of Compare the Market, are everywhere, not to mention that terrible opera singer, who sings on behalf of Go Compare. It should thank its lucky stars that confused.com, another potential rival, hasn't struck advertising gold for some time now.
Comedian Omid Djalili, Moneysupermarket's advertising star of choice, is not everyone's cup of tea, but his shouty humour is holding its own – the company's results for 2010, unveiled yesterday, were strong enough.
However, the longer term issue for Moneysupermarket and the rest is whether this is a market that is really big enough to support so many competing brands.
The good news is that the financial services sector is once again in expansion mode: the financial crisis, and the withdrawal of products it caused, particularly in the personal loan sector, hit the comparison services hard. With lenders and others returning to the market – and cash-strapped consumers as anxious as ever to find savings – it is getting easier to make money once again.
Then there is the prospect of international expansion. These businesses' forays into continental Europe have so far been tentative, but there is a growing opportunity in France and Germany.
And yet, the advertising spend required to keep your name in the public eye is too high for comfort. Moneysupermarket spent more than £21m on advertising last year, almost a seventh of its total revenues. As rivals step up their efforts to compete the bill will rise. Moreover were a new entrant to the market with deep pockets really to go for it – Tesco Compare has to date been a tentative venture, while the likes of Google have only flirted with price comparison services – these companies would be easily outgunned.
Consolidation is the answer. Not least for the sanity of television viewers confronted daily with a shouting match between talking meerkats, an out-of-tune opera singer and a brash Iranian comic.
The interest rate soap opera continues
The Treasury Select Committee is now being treated to regular displays of the bitter splits between members of the Bank of England's Monetary Policy Committee. At the last hearing featuring MPC members, the Bank's Governor, Mervyn King, had to listen to his colleague Adam Posen accuse him of being overtly political. Yesterday Mr King was almost as aggressive, slapping down Martin Weale's argument to MPs that an interest rate rise is necessary to dampen down inflation expectations as "self-defeating".
What we learned yesterday is that the Governor is even more doveish about interest rate rises than the evidence has previously suggested. Not only is he utterly unimpressed with the idea of trying to dampen inflationary expectations – not that he necessarily accepts these are in any case rising – but the risks he stresses are all on the downside case for growth.
So, for example, Mr King warned that the outlook for consumer spending is more uncertain than for any other constituent of growth this year. And he talked about how the fiscal tightening proposed by the Chancellor will further depress growth. The recovery will be "choppy"and even those sectors which do seem to be experiencing an uplift are not to be relied upon.
This, one senses, is not a man prepared to countenance an interest rate rise any time soon, unless there is a marked and unexpected shift in the evidence about how the economy is performing.
If not Mr King, which MPC members might be tempted to add their names to the three existing proponents of an interest rate rise? We can discount Mr Posen, who last month voted for monetary relaxation, in the form of a return to the Bank's quantitative easing programme. The other two external members of the MPC, David Miles and Paul Fisher, are also unlikely advocates of higher rates in the short term.
That leaves Charlie Bean and Paul Tucker, Mr King's two deputies. Of the pair, Mr Bean has seemed most hawkish, but only because Mr Tucker, who has responsibility for financial stability rather than monetary policy, has rarely spoken in public on this part of his responsibilities.
There is also a subtext here: the two men are the leading internal candidates to replace Mr King as Governor when his second term expires in 2013. Does either of them want to risk the wrath of George Osborne, the Chancellor, for whom low interest rates are a helpful counterpoint to ever tighter fiscal policy? It is Mr Osborne's view that will count for most when the Governor's post comes up – a black mark now might not be helpful for potential candidates.
Egg is a shell of what it might have been
Egg no doubt represents a decent opportunity for Barclaycard to pick up more customers and consolidate its market leadership. But the sale of the internet bank yesterday is a sad end to what looked, for a time anyway, to be a genuine departure for the financial services sector.
Dreamed up by Prudential in the late Nineties, Egg built a customer base of more than 2 million almost overnight and branched out beyond credit cards to a string of loan and savings products. The marketing was clever, service was slick and it stood a real chance of moving beyond its online origins.
Then the dot.com crash intervened, underinvestment followed and an eventual sale to Citgroup, which has managed the asset woefully (its chief achievement being a bungled attempt to close the accounts of 160,000 customers). Now it will presumably be subsumed by Barclaycard altogether.