Autumn is here

I hope that this contact finds you keeping safe and well.

With our feet firmly in Autumn the great British summer is now behind us, and we have Christmas adverts appearing on TV.

Saying that The Great British Bake Off and Strictly Come Dancing signal the run in to Christmas for me anyway.

I’ve been holding off on this update given we have seen some choppy markets in September with things like fuel shortages and gas price increases being a little over reported.

The markets have been searching for some negative news to sell off and they had their wish recently.

I’ve resisted the urge to add comments on these areas, and I’m sure you will be glad to read that I will not be adding any further comments.

What we saw before September is a positive 2021 and I have set this out below with a year to date chart.

As you can see, I have included the three most popular investment sectors and the FTSE100 as a reference point.

The second chart below shows you September and October to date and as you can see it was a very small sell off overall really.

Not overly concerning by any stretch but the markets do continue to search for bad news and things like Evergrande (Chinese property company) and increasing covid rates are targets for such news.

The rising energy/fuel prices has pushed inflation (our good old friend once more) higher and the last figures on this is now 3.25%. The expected 4% is now looking very likely, with some expectation that this will break the 4% ceiling.

The chancellor commented on this yesterday and the 4% “peak” will be with us for the foreseeable future.

However, I’m sticking my neck out here and think maybe more toward 4.5% to 5% with it then cooling next year as our consumerism in energy and goods (Christmas) reduces.

The threat of an increase in rates from the BoE is getting closer. In some part we need this and an increase in rates is expected. Furlough ending and with the bounce back loans now becoming payable may just hold this off for another month. Eyes toward the 4th of November for the next announcement.

In some forecasts it’s expected that there will be 3 rate rises in 2022 alone. From where we are currently that sounds scarier than it is.

Don’t forget the central rate is currently 0.10%

Again, a prediction, one increase pre-Christmas with more to follow early next year, say 2 in the first 6 months alone.

The markets are nervous about the central banks (as a whole) ability to influence inflation, and this is one of the reasons we have seen some investors selling off.

The Autumn statement thankfully didn’t have any surprises which I am really pleased about.

I will provide a separate summary on this very shortly to ensure we pick out the major parts of interest alone. As with all these budgets there are a lot of moving parts, and some do just not affect us directly for our planning.

So pre-Christmas look forward to increases in fuel and energy prices, a shortage of products on shelves and an interest rate increase.

As always, we are here to support you any way we can, so if you do have any questions or if you want to review your planning then please just get in touch.