What’s going on?

By Caroline Anstee, Managing Director of Anstee & Co.

 

As Marvin Gaye sang in 1971 “What’s going on?”. A question many clients are asking at the moment.

More Interest rate rises, the triple lock on pension in question, inflation rising?

“A week is a long time in politics” – (Harrold Wilson mid 1960s). As I write, the Prime Minster has resigned along with the Home Secretary and they are not sure whether the Chief whip has resigned or not!  I will try and summarise the last few weeks.

The mini budget on the 23rd of September by the now ex-chancellor was characterised by tax cuts for individuals and corporates, together with a generous energy funding scheme. This resulted in a repricing of UK Government risk, as the increasing cost of Government borrowing, already rising due to inflation was further exacerbated. The Bank of England had to take drastic measures to bring some order to the Gilt markets. The fall in Gilt prices and therefore Sterling was also painful. A very challenging year, not a repeat of the financial crisis in 2008 but a perfect storm, including the war in Ukraine and excessive Covid policies in China all adding to the rise of inflation.

A new Chancellor.

Following the resignation of the chancellor on Friday 14th October, the PM’s position is weakened. On the 17th of October, the new Chancellor Jeremy Hunt announced his fiscal plan and some of the tax cuts have been reversed.  More volatility will ensue until it becomes clear that policymakers and decision-makers are acceptable.

Households across the country are looking for reassurance, confidence and leadership. There is some good news though, just hard to see it through all the political noise. The key is to sit tight, as the saying goes, “It isn’t, timing the market, it’s time in the market”. Sometimes, it can be very hard to understand what is going on globally and having the nerve to stick with your plan, is even more reason to make sure your investments are well diversified, have a strict asset allocation, global and currency exposures and are managed effectively. All the investment houses and mortgage lenders we recommend are working very hard to foresee the current and future economic climate and we are keeping very close to them.

How Anstee & Co can help you.

Although everything seems to be moving at a fast pace and therefore difficult sometimes to keep up with the political landscape, Anstee & Co. does our best to explain to our clients why and how it is affecting their investments and their mortgage rates.

We are here to help.  If you have any concerns at all please get in touch with your adviser, never has it been more important to seek good financial advice.

If you have any thoughts on this article, “What’s going on?”, then we would love to hear from you.

Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).