“A Budget for hardworking families…”

Philip Hammond, the Chancellor of the Exchequer, delivered a Budget which he declared “shows the British people that their hard work is paying off”. Mr Hammond was under intense pressure to loosen the purse strings. He did announce several new cash injections, while suggesting that “the era of austerity is finally coming to an end”.
OBR FORECASTS The Chancellor began his statement by revealing the latest economic forecasts from the Office for Budget Responsibility (OBR) which showed a significant improvement in the public finances. Public borrowing for the current fiscal year was forecast to be £11.6bn lower than predicted in the Spring Statement and is then forecast to fall from £31.8bn in 2019/20 to £19.8bn in 2023-24, which would be its lowest level in more than 20 years. The OBR also raised its economic growth forecast for next year to 1.6% from 1.3%, while the 2020 growth forecast was revised up to 1.4% from 1.3%. Growth forecasts for 2021 and 2022 were maintained at 1.4% and 1.5% respectively, and a new forecast of 1.6% was unveiled for 2023.

Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future. It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest….

Growth picks up but Brexit fears loom large….

Although the UK economy recently recorded its fastest rate of growth in almost a year, Brexit-related uncertainties continue to cast a shadow over future growth prospects. Data released by the Office for National Statistics (ONS) shows that gross domestic product rose by 0.6% during the May–July period boosted by an increase in consumer spending thanks to the unusually hot weather and England’s strong World Cup performance. This was the highest growth rate since August 2017 and marks a distinct pick-up compared to the 0.4% figure posted in the three months to June.

SFFS Economic Review_Sep 18 (003)

Our monthly economic review is intended to provide background to recent developments in investment markets as well as to give an indication of how some key issues could impact in the future.

It is not intended that individual investment decisions should be taken based on this information; we are always ready to discuss your individual requirements. We hope you will find this review to be of interest.

INTEREST RATES UP BUT NO RUSH TO RAISE AGAIN

The Bank of England (BoE) has raised interest rates for only the second time in more than a decade, but stuck to its previous guidance that any further monetary tightening is likely to be only gradual and limited in extent.

On 2 August, the nine members of the Monetary Policy Committee (MPC) voted unanimously to raise the official bank rate by a quarter of a percentage point, from 0.5% to 0.75%. This took interest rates to their highest level since March 2009.

After making the announcement, BoE Governor Mark Carney suggested it was likely that further rate rises would be required over the next couple of years, in order to fulfil the BoE’s obligation of keeping consumer price inflation at around 2%.

SFFS Economic Review_Aug 18

SFFS Economic Review_July 18Warm weather and wedding boost growth.

The UK economy picked up some momentum during the three months to May as the hot weather and royal wedding sparked a modest rebound from the lacklustre performance recorded in the early part of the year. Last month saw a new monthly reading of gross domestic product (GDP) launched by the Office for National Statistics (ONS). This showed that the UK economy grew by 0.3% in May, compared to 0.2% in April and zero growth in March, while the average growth rate across the three months to the end of May was 0.2%. Commenting on the figures, Rob Kent-Smith, Head of National Accounts at ONS, said: “The first of our new rolling estimates of GDP shows a mixed picture of the UK economy with modest growth driven by the services sector, partly offset by falling construction and industrial output. Services, in particular, grew robustly in May, with retailers enjoying a double boost from the warm weather and the royal wedding.”

Retirement is often seen as the end of one chapter and the beginning of the next. Planning for it isn’t just about getting your money organised, although that’s obviously very important. Depending on your circumstances, you may want to take the opportunity to completely change your lifestyle, move home, start a new business, travel the world, learn a new skill or simply put your feet up. And like all big projects in life, the more time you can invest in thinking it through, the better the outcome will be.SFFS Simply Wealth_Summer 18