Breaking up is hard to do

After months of dialogue – and at the eleventh hour – Prime Minister Theresa May and the UK’s negotiators reached a deal with the European Union (EU) that will finally allow floundering Brexit discussions to progress to the next stage.   As the EU leaders  agreed to move Brexit talks on to the second phase they … Continue reading “Breaking up is hard to do”

US tax cuts: do the sums add up?

The US Senate recently passed its tax bill supporting the Trump administration’s tax reform measures, which call for a $1.5 trillion net tax stimulus. Supporters of these tax cuts have argued they will result in stronger economic growth, as did the tax cuts of Ronald Reagan in the 1980s and George W Bush in the … Continue reading “US tax cuts: do the sums add up?”

Fed raises US rates once again

The US Federal Reserve (Fed) raised its key interest rate by 0.25 percentage points at its December meeting. It is one of Janet Yellen’s final major acts as head of the US central bank.  The Fed left its rate outlook for the coming years unchanged from its projections in September.  This is the fifth increase … Continue reading “Fed raises US rates once again”

Outlook 2018: Another good year for investors?

As investors look ahead to a new year, they could be forgiven for wondering whether they will be as pleasantly surprised in 2018 as they were in 2017. A number of political worries on the horizon this time last year signally failed to materialise, including the likely shape of President Trump’s trade policies, the rise … Continue reading “Outlook 2018: Another good year for investors?”

Signal or noise? Political risk in 2018

Proliferation of weapons of mass destruction. Terrorism. Populism. A newly emboldened Russia. The world is an unsettled place, but financial markets are relatively calm. A few factors could yet jolt them. US equity markets have generated significant gains over the last year, despite the headlines speculating over possible Russian interference in the US presidential election, … Continue reading “Signal or noise? Political risk in 2018”

UK inflation breaches the BoE’s upper target

Higher food and energy prices have put further pressure on households ahead of the festive period. UK annual consumer price index (CPI) inflation rose to 3.1% in November – its highest rate since March 2012 and, more significantly, breaching the Bank of England’s upper target of 3%. The latest figures were higher than consensus expectations … Continue reading “UK inflation breaches the BoE’s upper target”

Where should investors look for opportunities in 2018?

After a turbo-charged 2017 investors have become nervous of a market sell-off. Among the signs: technology stocks have wobbled recently; high yield corporate bond spreads – the risk premium corporate bonds provide over government bonds – have narrowed to levels not seen since the financial crisis; and speculation has driven a bitcoin frenzy. But while … Continue reading “Where should investors look for opportunities in 2018?”

Why do some people like Bitcoin?

This week the Chicago Board Options Exchange allowed trading in Bitcoin futures. There has been great interest in the Bitcoin phenomenon all year, leading up to this partial recognition of it by the authorities. Those who had some money to spare for a high risk adventure have been able to do well from buying Bitcoin. … Continue reading “Why do some people like Bitcoin?”

Turbulence ahead: Politics is never far from the surface

November was a lacklustre month in terms of stock market returns. Japan and the US led the way with rises of 1.14% and 1.06% respectively, which resulted in the FTSE World index managing a rise of just 0.7%. Closer to home the FTSE All Share fell by 1.66%, as did Europe and Emerging markets which … Continue reading “Turbulence ahead: Politics is never far from the surface”

Be careful counting your chickens

Hopes are high for the OPEC meeting on 30 November. A programme of cuts to supply that was initiated last year by OPEC and some non-OPEC members (we’ll refer to the two collectively as ‘OPEC/NOPEC’) has resulted in the oil price steadily rising from its lows to just short of $60 a barrel at the … Continue reading “Be careful counting your chickens”

Germany shows there is still political risk in the Eurozone

When the Netherlands kept Mr Wilders out of power and Mr Macron swept into office in France, the immediate threats to the Euro disappeared. The recent collapse of coalition talks in Germany does not presage any undermining of majority support for the single currency in its heartland. The next major political issue facing the Euro … Continue reading “Germany shows there is still political risk in the Eurozone”

World pension ages on the rise: when will you retire?

State pension ages are rising around the world. Most countries will increase the point at which people can withdraw payments to 67 in coming decades. Some governments have been more aggressive. The UK and Ireland will increase the age to 68, and the British government has indicated that more even higher ages are inevitable. The … Continue reading “World pension ages on the rise: when will you retire?”

Budget November 2017: Third time lucky?

If the Chancellor suffers from claustrophobia, he’ll have been having a hard time of it in recent weeks. Mr Hammond has been hemmed in on one side by sobering economic and fiscal forecasts; on another by public services and national infrastructure showing the strain after seven years of austerity; and on a third by members … Continue reading “Budget November 2017: Third time lucky?”

Liabilities and the long-term effects of low rates

We lived through history earlier this month. The Bank of England (BoE) raised interest rates for the first time in ten years. But interest rates will stay low for a lot longer yet and this should encourage those with a long-term view. The move was symbolically important – a small, but significant, reminder that interest … Continue reading “Liabilities and the long-term effects of low rates”

Budget 2017 predictions

Chancellor Phillip Hammond will present his Autumn Budget to Parliament on Wednesday 22 November. The statement has been widely tipped to contain some concessions to younger voters but this will do little to relieve the pressure on maintaining fiscal targets. The Conservative Party conference in October outlined a number of policies aimed at courting younger … Continue reading “Budget 2017 predictions”