Indian summer 'sparks cash spree'

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4 October 2011 Last updated at 11:05 GMT Record temperatures were recorded for October in England More money was withdrawn from UK cash machines last Friday than on any other day so far this year, thanks to the hot weather, the Link network has said.

Some ￡577m was taken out from Link's machines that day as daytrippers prepared for the warm weekend, it said.

This was the highest amount withdrawn since Christmas Eve of last year, said the company.

Temperatures in England reached record levels for October, with the mercury hitting 29.9C (85.8F).

Cash spending

There are 64,000 cash machines connected to the Link network in the UK - that is nearly all that exist across the country. The latest figures do not include withdrawals when a customer used their own bank's ATM, so represents about 65% of total withdrawals.

Under this measure, the ￡577m withdrawn on 30 September was 14% higher than the amount taken out of cash machines on the same day a year earlier.

The cash spree - and the hot weather - continued through the weekend. The ￡252m withdrawn on Sunday was 11% more than a year earlier.

"The good weather really seems to have encouraged people to withdraw cash in preparation for increased spending over an unusually sunny weekend - confirmation that the right combination of feel good factors can boost short term spending and that cash is a very popular way of paying for these kinds of goods and services," said John Howells, chief executive of Link.

Pay day

Other factors behind the peak may include consumers choosing cash over cards when buying things outdoors, and that more people were in the UK enjoying the sunshine than would have been the case during the summer holiday season when many families go abroad.

A week ago, some retail analysts suggested that the unseasonal weather could hit early sales of autumn fashions.

Friday lunchtimes are commonly the most popular time of the week for cash machine use, with consumers preparing for weekend spending. Last Friday came at the end of the month, at a time when many workers are paid.

Previous busy times this year included the Thursday before the Royal wedding and long bank holiday weekend.

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Growing trade ties between Indian and Pakistan

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2 October 2011 Last updated at 16:04 GMT By Shahzeb Jillani BBC News Pakistan's commerce minister (right) took a large delegation with him Business leaders from India and Pakistan say there's new optimism about the efforts their governments are making to improve trade ties. But critics warn that overcoming decades of mistrust may not be that easy.

For the first time in 35 years, a Pakistani commerce minister led a business delegation to India last week. The entourage included nearly 80 leading industrialists, traders and high-ranking officials.

Peace talks between the two nuclear-armed neighbours broke down in 2008 after the attacks in the Indian city of Mumbai, which India blamed on Pakistan-based militants.

Nearly three years on, as if to emphasize a sense of normalcy, the Pakistani Commerce Minister, Makhdoom Amin Fahim, was hosted at the city's iconic Taj Mahal Hotel - which was one of the main targets of the 2008 attacks.

There, leading Pakistani traders got a chance to mingle with their equally eager-for-business Indian counterparts.

Between them, they spoke not just of the profits their individual businesses could make if their governments removed the long standing hurdles in their way. But also of how much the people of their two countries, and indeed the wider region, stand to benefit from freer movement of goods, money and commodities.

Win-win situation Continue reading the main story

The only way I see realization of trade potential between our two countries is for India to remove its non-tariff trade barriers and for Pakistan to reciprocate by granting the MFN status to India”

End Quote Hasan Khan Former advisor to Pakistan's Ministry of Finance Vijay Kalantri, president of All India Association of Industries, said traders on both sides feel business between India and Pakistan is a win-win situation for everyone.

"Why are Indians and Pakistanis forced to trade unofficially via third countries like Dubai or Sri Lanka?" he tells the BBC from Mumbai.

"All we are asking is, let there be direct business-to-business contact between us."

After the talks in Delhi, ministers from the two sides announced their agreement to boost their annual bilateral trade from current $2.7bn (￡1.7bn) to $6bn by 2015.

They also pledged to ease business travel and promote bilateral trade through the land route.

For Pakistan, a significant announcement was a pledge by India to drop its opposition to the European Union's plan to grant Pakistan tariff waiver on select commodities to help it recover from the devastation of 2010 floods.

There was hope that Pakistan might reciprocate and grant India the Most Favoured Nation status (India granted Pakistan MFN status way back in the 1990s).

Even though no such announcement came, Pakistan committed itself to a road map to implement preferential trade ties with India, as prescribed under the South Asia Free Trade Agreement (SAFTA).

Trade barriers

There are a number of explanations why Pakistan has so far withheld the MFN status from India.

At present there are a number of barriers to prevent trade between Indian and Pakistan

First is political. Pakistani leaders have often linked it to the resolution of the core issue of Kashmir.

It's a stance which has long been propagated for mainly domestic consumption.

But there is a sense in Pakistan that while the country should continue to push for a negotiated settlement of the Kashmir issue, trade and commerce should not be held hostage to resolution of political disputes.

The second is protectionism. For years, domestic industry in Pakistan has feared it would be swamped by imports from India. But even there, the mood appears to have shifted.

Senator Haji Ghulam Ali, president of Federation of Pakistan Chambers of Commerce and Industry, says there's a consensus that Pakistan should open up to Indian business.

"Everyone now recognizes it will be beneficial for both sides. It's just a matter of time before it's done," he tells the BBC from Delhi.

Business leaders say that less trade barriers would benefit firms in both countries

However, the last, and more plausible, obstacle is the issue of non-tariff barriers.

"In my experience, India has one of the most restrictive trade regimes in the region," asserts Dr Ashfaq Hasan Khan, a former advisor to Pakistan's Ministry of Finance. His view matters, given has decades of dealings with South Asian governments on trade liberalization.

He explains that despite granting Pakistan the MFN status, India has a variety of non-tariff barriers in place - such as, stringent certification codes, customs rules, security clearances and movement restrictions - which make it virtually impossible for Pakistani traders to do business in India.

"The only way I see realization of trade potential between our two countries is for India to remove its non-tariff trade barriers and for Pakistan to reciprocate by granting the MFN status to India," says Mr Khan.

He adds: "Unless there's political will to do that, everything else is just talk and photo-op."

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