The World In A Week - Biden and the UK economy both revisit old ground
Written by Chris Ayton.
While President Joe Biden enjoyed himself revisiting his heritage in Ireland, equity markets were also in a good mood with the MSCI All Country World Index +1.2% over the week. The UK equity market was even stronger, rising +1.9%. With incremental interest rate rises still expected, fixed income securities were generally more subdued as the Bloomberg Global Aggregate Index dropped -0.6% in GBP hedged terms over the week, although high yield bonds performed considerably better.
UK GDP growth data was released that showed the strike-impacted economy flatlining over February, but an upward revision to January’s growth figure means the size of the UK economy has finally surpassed where it was in February 2020, prior to the Covid pandemic. Sterling has also continued to be robust against the US Dollar, hitting a 10-month high of $1.2546 during the week, a level more than 20% above where it sat in the nadir of September last year.
In the US, better than expected Q1 earnings results from Citigroup, JP Morgan, and Wells Fargo eased some lingering concerns about the recent banking turmoil. Despite some signs of a softening labour market, US consumer sentiment also surprised on the upside, reigniting expectations of a further rate hike from the Federal Reserve in May.
China was a rare weak spot for equities, with MSCI China dropping -0.4% over the week. This was despite data showing export growth had surged 15% in March, driven by increasing sales of electric vehicles and their components as well as a surge in trade with Russia. With exports still a key component of China’s economy, the data provided some renewed hope that China can achieve the Government’s 5% GDP growth target for 2023.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 17th April 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - A shock to the system
Written by Shane Balkham.
One of the key economic metrics for determining the state of the economy that central banks monitor is employment. We know that both the Federal Reserve in the US, as well as the Bank of England, would like to see a weakening of employment, as this should in turn have a disinflationary effect on the overall economy. When employment is strong, it can create upward pressure on wages, and increase consumer demand.
Last week we had two data releases for US employment. The JOLTS (Job Openings and Labor Turnover Survey) showed that the number of official job vacancies in the US had dropped below 10 million for the first time since May 2021. The ratio for the number of jobs available compared to the number of people seeking jobs had reached more than 2x at some points last year; the latest measure has this ratio down to 1.7x. Wage growth has also slowed; on a year-by-year basis, wages have increased 4.2%, the lowest reading since the summer of 2021.
Another measure of the labour market in the US also showed jobs growth had slowed during March. Non-farm payroll data showed 236,000 jobs were added in March, slightly weaker than the expected 239,000.
Employment data is a lagging indicator and subject to revisions. The number of jobs recorded by non-farm payroll in February was originally recorded as 311,000 before being upwardly revised to 326,000, while in January the initial number of jobs added was 504,000 before being adjusted downwards to 472,000. Whilst still elevated, the numbers are trending downwards, which is important for those making decisions about the future of interest rates.
The signs of a gradual weakening in employment does suggest that inflationary pressures are easing in the US. However, whether this is sufficient for the Federal Reserve to pause its rate hiking cycle at its next meeting in May is unclear. The extent of the fallout from the banking sector turmoil has not yet been quantified, as the market is anticipating tighter lending standards and a slowdown in economic activity. Jerome Powell, Chairman of the Federal Reserve, has been quoted as saying that a tightening in financial conditions would be equivalent to another rate hike.
There are three weeks until the Federal Reserve Committee and Bank of England Committee meet to set interest rates. Whether the decisions are to hike or to pause, it does seem we are close to the peak of the interest rate hiking cycles.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 11th April 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week – Resilient Markets
Written by Cormac Nevin.
If the lay observer had followed the headlines on BBC News over the course of March, and attempted to apply them to what they could reasonably expect from markets over the course of the month, they might well end the month a little bit perplexed. One of the top performing market components over the month was the NASDAQ 100 Index of US technology companies, which returned +9.5% in local terms (+7.3% in GBP) during a month whereby the specialist Silicon Valley Bank collapsed into ignominy. While larger tech names have proved to be a safe haven of sorts, it does beg questions of the operating environment for some of their smaller and more dynamic peers.
This was followed by ongoing distress in multiple other small- and medium-sized US lenders such as Signature Bank. In Europe, the knock-on effect in confidence culminated in the coerced purchase of Credit Suisse by UBS, a bank which is one of the largest in the world. Again, markets were not particularly fazed by this, with the S&P 500 Index of broad US equities finishing the month strongly and returning +1.5% for the month and the MSCI Europe Ex-UK Index up +1.3%, both in GBP terms.
While markets in recent weeks were up despite negative headlines, it remains critical to not be complacent and retain diversified exposures. Macro volatility could be back.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 3rd April 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week – Cautiously hiking through a storm
Written by Millan Chauhan.
Last week in the US, the Federal Reserve announced a 0.25% increase in interest rates which was in line with some expectations. This was despite suggestions that the Federal Reserve would pause its tightening cycle amid the banking crisis which has seen the collapse of several regional US banks including Silicon Valley Bank, Signature Bank and Silvergate Bank. The European Central Bank (ECB) also moved ahead with a 0.5% interest rate rise at a point where UBS was agreeing to buy-out its Swiss rival Credit Suisse in an emergency deal aimed to stabilise financial markets. UBS has agreed to buy Credit Suisse at 60% less than its previous week’s market value.
The Office for National Statistics announced that the UK Inflation rate unexpectedly increased to 10.4% in the 12 months leading to February 2023 which was 0.5% above expectations. Inflation had been slowing down over the last three months; however, the latest inflation figure has interrupted this trend and was largely driven by upward pressure from the rising costs of vegetables/salads which was caused by shortages and bad weather. Food prices during the month of February rose 18.2% which is the largest increase since the 1970s.
Following the UK inflation data announcement last Wednesday and the banking crisis that has unfolded during March, the Bank of England also raised interest rates by 0.25% which was in line with expectations. Interestingly, out of the nine voting members within the Bank of England’s Monetary Policy Committee, two voted to keep rates unchanged but seven voted to hike rates which was identical to February’s meeting.
UK interest rates now sit at 4.25% as the Bank of England continues to seek to slow down inflation levels towards target levels of 2%. Whilst another interest rate rise, given the banking crisis may appear surprising to some, the Bank of England had been raising interest rates in a series of 0.50% and 0.75% instalments since mid-2022 with the latest rate rise being the smallest rate rise for 9 months and could signal that it is slowing the aggression of its hikes.
As ever, diversification is paramount within a portfolio when navigating periods of market stress and volatility which often present new opportunities.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 27th March 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - A week to remember
Written by Ilaria Massei.
Turmoil in the banking sector became the main focus over the last week, diverting attention from economic data releases for the first time in several months. A rapid outflow of customer deposits from Silicon Valley Bank (SVB) led to the biggest US bank failure since the global financial crisis. The Fed assured that all SVB depositors would have full access to funds on Monday morning and made additional funding available to banks to safeguard deposits and to address any potential liquidity pressures. This seemed to provide some confidence to markets that rebounded on Tuesday and coincided with the release of the annual inflation rate in the US which slowed to 6% in February from 6.4% in January.
However, on Wednesday, news broke that another banking giant, Credit Suisse, was experiencing problems and sent equity markets lower once again. In an environment, which is quite unlike 2008, where most European banks have strong capital cushions and are buying back stock, Credit Suisse was known to be more fragile. News that their core wealth management business was suffering major outflows led to a crisis of confidence and a rush of deposit withdrawals. The Swiss central bank stepped in with a £44bn credit line but the measure failed to stem the rush of withdrawals. Yesterday evening it was finally announced that UBS will take over the bank, trying to stop what could have triggered a global crisis of confidence in the banking sector.
Credit Suisse’s fall dragged down European Equities with the MSCI Europe Ex-UK and the FTSE All Share Index closing the week at -4.1% and -5.1% in GBP terms. On Thursday, the European Central Bank (ECB) raised interest rates by 0.50% to 3.0%, pressing ahead with its drive to combat elevated inflation. Policymakers also said that “the euro area banking sector is resilient, with strong capital and liquidity positions”, and that they were monitoring current market tensions closely. In the UK, the unemployment rate came out at 3.7 percent for the three months to January 2023, unchanged compared with the previous quarter. Total pay growth eased to 5.7% year-on-year in the three months to January from 6.0%.
Although banking stocks struggled, growth-oriented equities benefitted from a belief that the above may lead to a slowdown in the path of higher interest rates. In a flight to safety, bonds also performed much better with Barclays Global Aggregate Index up +1.4% for the week in GBP hedged terms. This reaffirms the benefit of maintaining an appropriately diversified portfolio by style and by asset class. We are also strong believers that taking a long-term investment perspective is the best way to navigate such uncertain and turbulent market conditions.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 20th March 2023.
© 2023 YOU Asset Management. All rights reserved.
Budget Statement Spring 2023 Summary
The “Back to Work Budget” could create a quiet revolution in financial planning outcomes
Chancellor Jeremy Hunt’s Spring Budget 2023 took place against a backdrop of great economic uncertainty, with interest rates rising, inflation stubbornly high and the banking sector beginning to wobble. Uncertainty over inflation, interest rates, the progress of the economy and even the banking sector abounds.
However, despite concerns about how much fiscal power this would leave the Chancellor in the Budget, he managed to introduce a series of measures that could lead to a radical rethink in terms of financial planning strategies.
Spring Budget 2023 – the key measures
Economic forecasts
The Office for Budget Responsibility (OBR) has issued fresh economic forecasts showing a modestly improved outlook for the UK economy.
It predicts the UK will no longer slip into a technical recession – two quarters of economic retraction – in 2023 but growth will instead flatline, before picking up in the middle of the decade: 1.8% in 2024, 2.5% in 2025, 2.1% in 2026, 1.9% in 2027.
Inflation is set to fall to 2.9% by the end of 2023, according to the OBR, down from a peak of 11.1% in October 2022, while it expects the Bank of England base rate to peak at 4.3% in the third quarter of 2023.
The fiscal watchdog has forecast higher-than-expected employment but predicts unemployment will rise to 4.4% in 2024 from 3.7% at the end of 2022, before returning to a structural rate of 4.1% by 2028.
Employment will increase in the long-term thanks largely to the State Pension age increase in 2028 and other measures in the Budget designed to encourage people back into the workforce, it says.
Real household disposable income is expected to fall by 5.7% over two years (2022-23 and 2023-24), 1.4 percentage points less than previously expected. The fall is thanks chiefly to rising energy costs for households and will be the largest decline since 1956-57.
As for the property market, the OBR sees house prices falling around 10% between the fourth quarter of 2022 and the end of 2025. However, it believes prices will have recovered by the end of 2027.
Meanwhile, it sees mortgage rates peaking much lower than previously, just above 4% in 2027 – 0.8 percentage points lower than it predicted in November.
Business and economic measures
The Government has pressed on with the previously announced hike of corporation tax to 25% from 19%. However, Jeremy Hunt stated that just 10% of businesses would end up paying this level of tax.
He also announced the replacement of the business tax super deduction with a ‘full capital expensing’ scheme, worth £9 billion a year over three years to businesses. The OBR forecasts this will increase business investment by around 3% a year.
The Ministry of Defence has had a spending boost of £11 billion over five years, while a new potholes fund of £200 million has been created for local councils to fix roads. The Chancellor is also setting £60 million aside to help local pools and leisure centres in financial straits.
Meanwhile nuclear power will be reclassified as sustainable for tax purposes alongside wind and solar, while a new ‘Great British Nuclear’ institution will be created to oversee a transition to more nuclear power for the country. The government will also tender for the provision of small nuclear reactors.
Personal taxation
Big change comes for pensions. The pensions annual allowance is rising 50% – from £40,000 to £60,000.
The big rabbit from Jeremy Hunt’s hat came with the abolition of the pensions lifetime allowance. It had been expected to be raised from £1.073 million to £1.8 million but it has been removed completely. The charge has been cancelled from the new tax year 2023-24, while it will be abolished entirely in a future finance bill.
Alongside this, the money purchase annual allowance (MPAA) and tapered annual allowance (TAA) have been hiked from £4,000 to £10,000.
Plus, the adjusted income level required for the tapered annual allowance to apply to an individual increases from £240,000 to £260,000. However, the pensions tax-free lump sum has been capped at 25% the original lifetime allowance or £268,275.
All these changes will take effect from 6 April this year. There are no changes to income tax thresholds or ISA allowances for the new tax year. There are also no new reductions to dividend or capital gains tax allowances, other than those already announced for the new tax year.
Households, lifestyle and sins
Among the Chancellor’s banner announcements were big changes to how childcare provision is funded and regulated in England and Wales. The childcare staffing ratio is being aligned with Scotland at 5:1 while nurseries will receive a significant funding uplift and all schools will begin to offer wraparound care from September 2026.
Hunt also announced a giveaway worth more than £6,500 a year on average for young families with the extension of free childcare hours to children aged nine months and over.
Any child over two years old will be able to receive 15 hours of free childcare a week from April 2024. From September 2024 this will be extended to nine months and over and from September 2025 this will increase to 30 hours. The policy is expected to cost the Government around £4 billion a year, according to the OBR.
The energy price guarantee (EPG) has been extended for a further three months. This will cap the average household energy bill at £2,500.
It is expected that the price of energy will fall below the guarantee level in the intervening period, making further guarantees from the Government unnecessary as average bills reach £2,200 by year end according to the OBR.
Fuel duty has been frozen for another year while the 5p reduction – introduced last year amid soaring prices – has been maintained for another 12 months.
As for sin taxes, alcohol duty is increasing in line with RPI. The Government is increasing draught relief – the level of tax on fermented alcohol bought from a pub (i.e., beer, cider and wine) – giving pubs an 11p tax advantage over supermarkets. Tobacco duties are increasing again by RPI + 2%.
High earners are failing to claim pension tax relief – how to claim
High earners have failed to claim around £1.3 billion in pensions tax relief in the last five years, according to figures obtained by pension provider PensionBee.
While the number of people failing to claim has fallen in the past five years, the amount of money going unclaimed is still too high. In 2020/21, the average amount that taxpayers failed to claim was £425 for basic rate payers, and £527 for higher rate payers. Anyone can claim tax relief on pension contributions, up to 100% of their income with a cap of £40,000. If you are a basic rate taxpayer, you’ll get a 20% top-up on your pension contributions, while if you’re a higher rate taxpayer, this increases to 40%. Additional rate taxpayers receive 45%.
The reason why higher rate taxpayers miss out on valuable extra contributions comes down to a technical way in which employers pay their staff. Those who pay to a pension provider using a “net pay” or “gross tax basis” arrangement will earn tax relief automatically. However, if your employer and pension provider operate on a “relief at source” method, the pension provider will claim 20% of the tax relief from HMRC and pay it into the pot. If you’re paying the higher rate of tax, the relief isn’t automatically applied at the higher level.
How to claim for higher rate relief
The first thing to do is check with your employer whether your pension payments are paid under relief at source. This also includes self-invested pension pots (SIPPs) that you contribute to independent of your employer. If that is the case, then to claim the additional tax relief you’ll need to fill out a self-assessment tax return. If you already do this annually that is good, you can use the form to make the claim. PensionBee says around 75% of higher rate payers already do this. However, this leaves one in four not claiming, while around half of additional rate taxpayers don’t either.
You can either fill out a self-assessment tax return, or instead contact HMRC to claim. Claims can be backdated for up to four years, which could add up to a highly valuable extra amount into your pension pot.
Pension savings are especially valuable because unlike in ISAs, your wealth is given a head start thanks to the tax-free element. This means over years of contribution and investment; your money will have more resources to grow with over time.
Of course, a pension is just one aspect of an overall wealth growth strategy. If you would like to discuss this or your options more broadly, don’t hesitate to get in touch.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th March 2023.
The pros and cons of getting a smart meter
Smart meters have been a contentious program encouraged by the Government as it looks to make the way households record their energy usage more efficient.
According to the most recent data from the Government, there are now over 30 million smart meters installed in homes and businesses around the country. Over half (54%) of all energy reading meters are now smart. Conversely, energy firms have been accused of pushing too hard on customers to install such meters, and much scepticism remains about their usefulness.
What do smart meters do?
Smart meters replace traditional meters in homes and businesses and allow for two key processes to take place. Firstly, they communicate directly with your energy provider using a mobile network signal and provide them with real-time information on your energy usage. This has the benefit that you won’t ever have to take a reading and update it manually with your provider. It also means that the energy firm you use can bill you as accurately as possible based on your usage. The second benefit is that you will get a portable monitor for your home that will show you a breakdown of your energy consumption. This has the benefit of showing you in real time how much energy you are using. If you turn on high-usage appliances such as tumble dryers or dishwashers, it should show you how much those appliances are using.
The Government also says smart meters have a benefit at a national level as they help it to ascertain an accurate picture of how the country is using energy. The Government has long-term goals relating to climate change that include reducing overall consumption, so this information is useful to it in this process. It also has secondary benefits such as alerting engineers and providers when there is a power cut and how to localise the issue to resolve it quicker. This saves them time and money, which theoretically ultimately leads to lower energy bills for households.
Can they save you money?
Smart meters can only save you money in the sense that they show you exactly how much you are using, and whether certain appliances in your home are using too much. They can also show you how much your base usage is. In other words, without turning on expensive appliances such as tumble dryers, you can get an idea of how much electricity and gas your home is consuming over the course of a typical day. It may be that you’ve got electronics or lighting that are using large amounts of electricity without you knowing. Or perhaps you’ve got the heating on too high, and this is driving up your gas usage.
In essence, all a smart meter can do to help you save on energy bills is to present you with a more accurate live view through the monitor of your consumption. However, it’s up to you to work out how to reduce that consumption if you feel your bills are too high.
The drawbacks of a smart meter
Smart meters present your energy provider with accurate and up to date information on your energy usage. If your usage goes up, this can lead to the provider adjusting your direct debit upwards to anticipate higher usage. Smart meter technology has also been criticised as unreliable. While less of an issue now, it was the case that when switching providers sometimes smart meters would not be able to carry over to the new provider, effectively turning them back into ‘dumb’ meters where you have to take a manual reading. While this is less of an issue with so-called SMETS-2 meters, ensuring a new provider is receiving the right information – if and when you do switch – is really important.
Smart meters can also suffer from technological foibles such as loss of signal, software issues and other problems that prevent them from accurately providing information to your energy supplier. It is important to keep an eye on it and your bills to ensure they’re charging you fairly and correctly.
Energy firms have also been criticised in the past for forcing smart meters on customers, using heavy-handed and pressure tactics to encourage adoption. The installation of smart meters can also be an issue for renters who manage their own energy bills but have a landlord who might not be willing to have one installed.
The energy outlook
Energy prices for households have been at record levels this winter, leading to eye-watering bills despite the Government’s energy price guarantee – which it has spent lots on protecting consumers from the worst rises. The good news is that gas prices – on which overall energy prices are reliant on – have mostly come down from record levels. This doesn’t unfortunately lead to lower energy bills immediately. This is because energy firms buy their energy from wholesalers on a longer-time horizon over many months.
Currently the energy price guarantee (EPG) ensures the average household will only pay a maximum of £2,500 a year for their energy. This figure can however be higher or lower based on a household’s usage as the guarantee relates to a cap on units of energy rather than the overall bill. The EPG is set to expire after March 2023. Energy consultancy Cornwall Insight has good news, however. It says that energy bills should on average come back down to below the EPG this year. Based upon current gas price levels, it believes average household bills should be around £2,200 by July-September 2023. While this is still well above historic levels, it should help to soften any further blows to household bills.
This outcome is still uncertain as Europe continues to suffer from energy market disruption thanks to the conflict in Ukraine. Much still depends on how governments respond to these ongoing geopolitical issues and how this ultimately affects wholesale fossil fuel prices.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th March 2023.
Could you soon be working a four-day work week?
Four-day work weeks could soon be the norm after a major study found considerable benefits for workers and businesses.
The study, which involved 61 firms from a range of industries, encompassing around 3,000 workers has been hailed as a major success as the majority were convinced of its practical benefits. Not only did worker turnover decrease, employees reported a lower level of burnout while some firms also experienced unusual increases in revenues – suggesting it made those businesses more productive.
The success of the trial has seen politicians call for its wider implementation while major businesses, such as Sainsburys and Dunelm, are considering adopting the practice. It’s safe to say that the four-day work week trend could soon be coming to your workplace. However, what are the potential financial implications?
How a four-day work week would affect you and your money
The trial was explicitly designed so that workers would enjoy more free time while continuing to earn the same amount of money as if they were working five-day weeks. From an earnings standpoint – no one should lose out.
There is also a potential impact on the success of the business you work for, in the long term, if the findings of the trial bear out more widely. If businesses are able to improve productivity and earn more money, it could lead to better pay rewards for workers too.
Another aspect that could be of benefit is what people do in their extra free day. While some may choose to spend more time on leisure activities, with kids or grandkids, or just relaxing, others may choose to pursue part-time work or even a side hustle business to earn extra money with their new-found time.
There are other important financial perks to consider such as the cost of childcare. The UK has some of the most expensive childcare costs in Europe, so as a parent or grandparent being able to help out with kids an extra day a week could be a financial, as well as familial boon. Since the pandemic, there has also been an increasing shift of older workers abstaining from the workforce. The reasons for this have been debated, with some citing wealthy retirement pots for many who don’t need to work, while others lay the blame on a healthcare crisis for older people. The introduction of more flexible working patterns such as a four-day week could be helpful for older workers looking for a softer reintroduction to the workplace, or flexibility to meet their lifestyles.
Drawbacks of a four-day work week
While there appear to be considerable benefits to a short working week, there are also some drawbacks.
Implementation may vary but some employers could ask workers to fulfil the same number of hours as they would over five. For instance, instead of working 5x eight-hour days employees could do 4x ten-hour days. Not all businesses will find shorter work weeks practical either, particularly those that rely on shift work. This could lead to staffing shortages in key sectors such as healthcare or hospitality.
Ultimately though, in financial terms, no one should be worse off from working less days in the week. Plus, with the freedom of an extra day to yourself, it could be an ideal time to start something new or spend more time on yourself.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th March 2023.
The World In A Week - Encouraging signs?
Written by Ilaria Massei.
Last week, equity markets ended mixed with the MSCI All Country World Index +0.1% (in GBP terms), following a week with a relatively light economic calendar. In the US, the weekly jobless claims’ report brought signs of growing weakness in the labour market, but investors appeared divided on whether to treat this as good news. Some viewed this release as a sign that the Federal Reserve might stop hiking rates whereas others viewed it as a further step towards an upcoming recession. Weekly jobless claims rose a bit more than expected and also continuing jobless claims, which measure unemployed people who have been receiving unemployment benefits for a prolonged period, rose well above market expectations, reaching its highest level since November 2021.
In Europe, we are starting to see signs of divergence within policymakers with regards to the decision of hiking rates. The minutes of the March meeting of the European Central bank (ECB) showed policymakers were split. The majority voted to hike rates, however, some members said they would prefer a pause until calm returns in financial markets.
In the UK, the annual UK consumer price growth in March slowed by less than expected to 10.1% from 10.4% in February, driven by surging food and drink prices. Data from the Office for National Statistics (ONS) indicated that wage growth also showed few signs of moderating in the three months through February. At the last meeting, the 0.25% interest rate rise was passed with seven in favour and two who wanted to hold rates still. However, these continued inflationary forces could lead the Bank of England to raise interest rates once more in its May meeting.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 24th April 2023.
© 2023 YOU Asset Management. All rights reserved.