Insights into behavioural investing

Have you ever made an irrational or impulsive purchase you’ve later regretted? We all make decisions based on our emotions or personal biases, but when it comes to investing, such mistakes can be very costly. 

What is behavioural investment? 

Behavioural investment is an approach that acknowledges how our emotions and our biases can sometimes make decisions for us. During periods of geopolitical uncertainty and heightened risk, behavioural investment biases can become even more pronounced, tempting you into making poor decisions. Here are some impulses that often lead to bad investment decisions: 

  • Loss aversion: Investors worry about their investments falling further in value, so they sell them prematurely, locking in losses and missing out on potential rebounds 
  • Herd mentality: When markets fall, people tend to panic, follow the crowd and sell their investments. This ‘herd mentality’ means markets keep falling, as more people panic and sell, creating a spiral 
  • Confirmation bias: Investors let their own opinions dictate their actions and often seek out information that confirms their existing fears, ignoring evidence that contradicts their own impulses 
  • Overconfidence: Some investors believe they can predict the market’s reaction to geopolitical events, leading them to make risky bets that could ultimately backfire. 

Avoiding behavioural biases 

Investors often need to worry less about geopolitical events and more about avoiding making poor decisions. Worry not, you’re in safe hands. We can create a plan and stick to it, so we focus on longer-term goals, rather than risk getting distracted by short-term noise. We will build a resilient portfolio, spreading your investments across different asset classes to manage risk. Rest assured, we will make well-considered, researched investment decisions to increase your chances of achieving your long-term financial goals. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

What to consider when you buy a new build

Are you thinking of buying a new  build? The good news is there are more  regulations than ever that protect  buyers of newly built homes. It can be  difficult to keep up with these changes,  so here’s what you need to know.   

Codes of conduct   

Most developers are signed up to a code which lays out best practice for the marketing, building and  selling of new builds. Check which code your builder follows, so you know who is holding them to account if any issues arise. Many developers were signed up to the Consumer Code for Home Builders until 2021, when the New Homes Quality Board (NHQB) was launched.   

The guidelines   

Transparency is at the forefront of both the Consumer Code for Home Builders and the New Homes Quality Code from the NHQB. Consumers have the right to withdraw from the purchase if the housebuilder makes any changes to the home. Deposits must be protected and high-pressure sales tactics are prohibited to protect vulnerable customers. The housebuilder must also provide an after-sales service for up to two years after legal completion.   

Check for snags   

Defects with the property – otherwise known as snags – are a common problem with new builds. Buyers can commission a professional snagging company to inspect the new build before they move  in. If the developer is registered with the NHQB, they are required to rectify any snags within 30 days, unless there is a suitable reason for delay.   

Complaints procedure   

Each code has a process and timeframe for the handling of complaints. The New Homes Ombudsman Service is free for anyone whose developer is registered with the NHQB. Meanwhile, issues with housebuilders signed up to the Consumer Code for Home Buyers can be taken to the Independent Dispute Resolution Scheme.  

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments 

News in Review

“The construction sector appears to be in the early stages of a strong recovery” 

The release last week of a closely watched construction survey offered optimism for the sector and further evidence of the UK’s economic recovery. 

The S&P Global UK Construction Purchase Manager’s Index, a seasonally adjusted measure of activity in construction, jumped to 55.3 in July. This put it above the 52.2 recorded in June and, significantly, signalled a fifth consecutive month of growth. 

Analysts noted that the construction sector’s ‘strong recovery’ led to growth at its highest level in more than two years. Some pointed to Labour’s shake-up of planning laws as a possible reason for the boost in activity; others focused on increased customer confidence bringing stalled projects back into action. 

Andrew Harker, Economics Director at S&P Global, commented on the “pace of expansion roaring ahead in July”. He added, “Firms saw the strongest increases in new orders and activity since 2022 as paused projects were released amid reports of improved customer confidence.” 

An influx of new orders buoyed the growth in activity, experts agreed, with the data revealing the solid foundations of this growth. Indeed, all three key parts of the construction sector – housing, commercial building and civil engineering – recorded improved activity. 

Civil engineering led the way, with its sharpest growth for two-and-a-half years. Meanwhile, after a recent slump amid high interest rates, new housing projects saw a welcome return to growth. For the third consecutive month, construction firms also increased staffing. 

Commenting on the data, Peter Arnold, EY UK’s Chief Economist said, “As with the manufacturing and services surveys, the 2024 General Election appears to have injected some month-to-month volatility into the construction survey results, with a soft June followed by a stronger July as uncertainty cleared. The detail of July’s survey was also positive, with new orders growing at the strongest pace in more than two years and hiring and purchasing activity also increasing. After a challenging couple of years, the construction sector appears to be in the early stages of a strong recovery.” 

Boost to past growth figures 

In other good news for the UK economy, growth in 2022 has been revised sharply upwards in new figures published by the Office for National Statistics (ONS) last Wednesday. 

As the UK moved out of the pandemic, the economy picked up by 4.8%, ONS said, as opposed to the 4.3% figure originally estimated. According to the new figures, the UK economy was 2.1% larger at the end of 2022 than it had been pre-pandemic. 

Analysts called the revision a ‘boost for Britain’, as the country had previously been thought to be the slowest G7 economy in its pandemic recovery. Likewise, workers were more productive in 2022 than earlier estimates had believed, with output per hour of work up by 0.4%. 

While stressing that such revisions are a regular part of producing GDP estimates, ONS acknowledged that the past few years have been challenging for national statistical institutes. The challenges of taking reliable measurements during the pandemic have led many countries to revise initial estimates, ONS explained. 

Unemployment falls slightly 

UK unemployment figures released by ONS on Tuesday show a slight drop, at 4.2% in the three months to the end of June, down from 4.4% previously. In the same period, the employment rate was estimated at 74.5% and the economic inactivity rate was estimated at 22.2%.  

Meanwhile, wage growth continued to slow, rising at annual rate of 5.4% – its weakest in almost two years. 

However, ONS said pay growth remained ‘relatively strong’ with earnings continuing to rise faster than prices. 

Team GB success 

Team GB athletes have returned to the UK after collecting 65 medals at the Paris 2024 Olympics. The tally for Team GB was 14 golds, 22 silvers and 29 bronzes, matching their total medal haul from London 2012. It is also the joint-third-highest tally for Great Britain at a single Games, behind Rio 2016 (67 medals) and London 1908 (146). 

There is more to look forward to with the Paris 2024 Paralympics taking place from 28 August until 8 September. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (14 August 2024) 

Financial wellbeing is multifaceted

According to research1, 81% of the UK’s wealthiest individuals are ‘stressed’ about their finances, suggesting financial wellbeing is about more than just the totality of your wealth. So, virtually everyone has concerns about what their financial future will look like. 

Planning for the future 

The prime concerns for individuals centred around future planning and retirement, specifically maintaining a comparable lifestyle in later life (51%), the value of their investments (39%), providing for future generations (25%), the tax burden (24%) and falling victim to fraud (22%). 

Interestingly, almost three in five wealthy individuals (59%) in the UK are considering relocating overseas, to enjoy what they regard to be an improved standard of living (36%), lower property costs (28%) and a more favourable tax regime (21%). 

The importance of financial wellbeing  

Financial wellbeing is more than just having large sums of money. It’s a state of feeling secure and in control of your finances, both now and in the future. According to the Global Financial Wellbeing Report 20242, across all the countries surveyed, people’s top goal is to ‘feel secure’ (94%), noting that people who feel financially confident are ‘two times more likely to have goals, ambitions and dreams for their life.’ 

Finding your purpose 

While money can’t buy you happiness, as the saying goes, it can give you security and freedom. But to get there, you need to have a plan. A good starting point is to work out what’s most important to you and what you want to achieve. Wealth has the capacity to create a powerful purpose within our lives, provided we are able to unlock its true value by understanding your ‘why.’ Once you’ve established this, you can create a plan unique to you that you can work towards with purpose. 

Unlocking the real value of your wealth  

We can help you to develop a clear understanding of what you want to achieve with your wealth, as well as provide you with the support and expert advice to help you develop a financial strategy that brings you closer to achieving those goals. There’s no point in worrying about your financial future when you could be taking valuable steps now to take control and face the future with confidence. 

1Arbuthnot Latham, 2024, 2nudge, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Home Finance – In the news

Location, location, location 

Homeowners are willing to pay more for convenience, as a short walk to a town centre or high street could boost a home’s value by more than £80,0001.  In England, homes that are close to a town are worth 27.6% more than the average property.  Interestingly, proximity costs an extra 14.2% in the West Midlands, but East Midlands homes only have a 0.9% premium. So, buyers looking to get more for their money may wish to look a little further afield – provided they don’t mind going the extra mile for a high street!   

Surge in smaller homes        

The pandemic prompted many homeowners to move out of cities in favour of bigger homes, but this trend, coined the ‘race for space,’ is now possibly being reversed as data shows demand for smaller homes is increasing. Last year, 53% of homes sold with a mortgage were smaller properties – the highest proportion in nearly 30 years2. This highlights that, amidst the cost-of-living crisis and  ongoing mortgage affordability challenges, buyers are managing their expectations and settling for less space. It may not be surprising that many of these small homeowners are first-time buyers, 57% of whom purchased flats or terraced houses in 2023.   

1Yopa, 2024, 2Halifax, 2024   

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments 

Thinking about making a pension contribution with your bonus?

Receiving a bonus at work as a reward for a job well done is highly satisfying, but with bonuses subject to Income Tax and National Insurance Contributions, you face losing a significant portion of your hard-earned money. A bonus may even push you into a higher tax band, meaning that you receive an even smaller sum than expected. 

With 44%1 of workers who received a bonus last year choosing to pay some or all of it into their pension, depending on your financial priorities, circumstances and timescale, this may be worth considering. Pension contributions benefit from tax relief at the highest rate of Income Tax you pay – currently 20% for basic rate taxpayers and 40% or 45% for higher or additional rate taxpayers. 

Consumer Finance Specialist at Royal London, Sarah Pennells, commented, “There definitely isn’t a right or wrong way to treat your bonus if you receive one, but, while investment returns are never guaranteed, your bonus could be worth more in the longer run if you choose to invest it in your pension rather than spend it, and sacrificing your bonus into your pension is a savvy way to save on tax.” 

We, your financial advisers, can help you understand the tax implications of your bonus, advise you on how best to invest it to stand you in good stead to meet your financial goals, and review and adjust your existing financial plan to reflect your new circumstances. 

1Royal London, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

News in Review

“Inflationary pressures have eased enough that we’ve been able to cut interest rates”  

Last week, the Bank of England’s (BoE’s) Monetary Policy Committee (MPC) voted by a narrow majority of 5 – 4 to reduce Bank Rate by 0.25%, to 5%. Four committee members expressed a preference to maintain it at 5.25%.  

This is the first drop since March 2020. The rate had been held at 5.25% since August 2023 in an attempt to tackle rising prices across the UK. 

Commenting on the decision to lower rates, BoE Governor, Andrew Bailey said, “Inflationary pressures have eased enough that we’ve been able to cut interest rates today” but he went on to caution that policymakers need “to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much”. 

The MPC minutes stated, ‘inflation is expected to increase to around 2.75% in the second half of this year, as declines in energy prices last year fell out of the annual comparison, revealing more clearly the prevailing persistence of domestic inflationary pressures.’ The Committee also confirmed that monetary policy will need to remain restrictive for long enough to dissipate any risks preventing inflation from returning sustainably to the 2% target. 

Looking ahead, the next MPC meeting will conclude on 19 September. 

Business confidence boost 

Overall business confidence in the UK rose significantly last month, according to the latest Business Barometer, released last Wednesday by Lloyds. With a nine-point increase in July, business confidence equalled its highest level in eight years. After reversing the drop recorded in June, confidence levels returned to 50%, the same as the figure in May. 

Analysts suggest that July’s strong showing resulted from a combination of improved economic optimism and better trading prospects. On the first point, more than six in 10 respondents felt more positively about the economy in July, up from 55% in June. In contrast, just 17% felt more negatively. Likewise, 62% of businesses reported stronger activity in July. This represented a significant jump from the level in June (53%). Only 6% predicted weaker trading prospects (9% in June). 

The optimistic outlook will likely be good news for employment figures too. Staffing expectations also rose healthily in July – more than half of businesses surveyed now plan to expand their workforce, compared to just 14% who expect to reduce staffing. The resulting net balance is the joint highest since March 2017. 

House price news 

Nationwide’s latest house price index, released last week, showed strength in the UK housing market, with mortgage activity seen to be continuing at a ‘respectable pace’. House prices rose by 0.3% month on month in July, the figures revealed. Meanwhile, the annual growth rate picked up to 2.1%, from 1.5% in June, making it the fastest pace of growth since December 2022. 

Commenting on the release, Robert Gardner, Chief Economist at Nationwide said, “UK house prices increased by 0.3% month on month in July, after taking account of seasonal effects. However, prices are still around 2.8% below the all-time highs recorded in the summer of 2022.” He added, “Housing market activity has been holding relatively steady in recent months with the number of mortgages approved for house purchase at around 60,000 per month. While this is still around 10% below the level prevailing before the pandemic struck, it is still a respectable pace given the higher interest rate environment.” 

Summer’s arrival boosts clothing and beauty 

Latest data from the British Retail Consortium (BRC) has highlighted UK retail sales in the UK rose by 0.5% in July 2024 from a year ago. The growth was supported largely by consumers’ purchases of clothing and beauty products in preparation for the holidays. In the three months to July, food sales were up 2.6% year-on-year, while sales of non-food items declined by 1.7%. Helen Dickinson, Chief Executive at the BRC, said, “The late arrival of British sunshine led to a better month for summer clothing and health and beauty products as shoppers prepared for days out with friends and holidays away.”  

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (7 August 2024) 

Money – In the news

Financial goals fall by the wayside 

A poll has found that 57% of adults had money-related goals for 2024, such as reducing debt and wanting more disposable income1. However, two-thirds (67%) had given up on achieving their financial aims by the end of Q1; 16% said this was due to having unrealistic expectations, and 10% put it down to laziness. 

Retirement clients fear exhausting their savings 

A survey of financial advisers has revealed what clients are most worried about when it comes to retirement. Some 71% of respondents reported that the most common client fear is running out of money2. Meanwhile, 64% of advisers cited the cost-of-living crisis as a cause for concern, and 49% mentioned the costs of long-term care. 

Wedding guests have a price to pay 

About 9.5 million Brits have plans to attend a wedding this year3, but the celebrations come at a cost, as research suggests that an average guest spends £398 on a UK wedding. Getting married abroad is becoming increasingly popular, with guests typically expecting to pay about £1,000 each if they attend a destination wedding4. 

Gen Z most financially confident 

Younger generations are more confident about their finances, a study has found5. In a survey of employees from across the globe, 38% of Gen Z (born between 1997 and 2012) said they were very confident about reaching their financial goals. However, only 23% of Gen Xers (born between 1966 and 1980) felt the same. 

1NatWest, 2024, 2Aegon, 2024, 3Censuswide, 2024, 4Aviva, 2024,5nudge, 2024 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Economic Review – July 2024

UK growth stronger than expected 

Figures released last month by the Office for National Statistics (ONS) showed the UK economy grew faster in May than had been predicted, while survey evidence points to a more recent post-election pick-up in business activity. 

The latest gross domestic product (GDP) statistics revealed that economic output rose by 0.4% in May, twice the level that had been forecast in a Reuters poll of economists. May’s figure also represented a strong rebound from the zero-growth rate recorded in April, with a broad-based increase in output as the services, manufacturing and construction sectors all posted positive rates of growth. 

ONS also noted that growth was relatively strong in the three months to May, with GDP rising by 0.9% in comparison to the previous three-month period. This represents the UK economy’s fastest rate of growth for more than two years. 

Evidence from a closely watched economic survey also suggests private sector output picked up last month following a lull in the run-up to July’s General Election. The preliminary headline growth indicator from the latest S&P Global/CIPS UK Purchasing Managers’ Index (PMI) stood at 52.7 in July, slightly ahead of analysts’ expectations and up from a six-month low of 52.3 in June. Manufacturing output was particularly strong, with this sector expanding at its fastest rate in almost two and a half years. 

Commenting on the findings, S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The flash PMI survey data for July signal an encouraging start to the second half of the year, with output, order books and employment all growing at faster rates amid rebounding business confidence. The first post-election business survey paints a welcoming picture for the new government, with companies operating across manufacturing and services having gained optimism about the future and reporting a renewed surge in demand.”  

Fresh signs of cooling jobs market 

Last month’s release of labour market statistics revealed further signs of a softening in the UK jobs market with pay growth easing and another drop in the overall number of vacancies. 

Recently released ONS figures showed that average weekly earnings excluding bonuses rose at an annual rate of 5.7% in the three months to May. Although this was in line with analysts’ expectations, it did represent a modest decline from the 6.0% recorded during the previous three-month period and was the slowest reported rate of pay growth since the summer of 2022. 

ONS said the latest release suggested pay growth is now showing ‘signs of slowing again’ although it also pointed out that, in real terms, wage growth still stands at a two-and-a-half-year high. Indeed, after adjusting for inflation using the Consumer Prices Index including owner occupiers’ housing costs, regular pay rose by 2.5% in the three months to May. 

The data also revealed a further fall in the number of job vacancies, with 30,000 fewer reported in the April–June period compared to the previous three months. While at 889,000, the total is still significantly higher than pre-pandemic levels, this latest fall was the 24th successive monthly decline in the overall level of vacancies. 

ONS highlighted other signs of ‘cooling’ in the labour market as well, with growth in the number of employees on the payroll said to be ‘weakening over the medium term.’ Additionally, while the latest release did show the unemployment rate unchanged at 4.4%, ONS noted that the rate has been ‘gradually increasing.’ 

The statistics agency also provided an update on its plans to improve reliability of the labour market data. A switch to a new version of its Labour Force Survey, which had been due to take place in September, has now been delayed until next year.  

Markets (Data compiled by TOMD) 

On the last day of July, US equities were supported as investors contemplated the latest move from the Federal Reserve to retain rates, with indicators from Fed Chair Jerome Powell that a September cut “could be on the table.” 

The tech-oriented NASDAQ responded positively after a challenging few days as initial earnings from some tech mega caps disappointed. The NASDAQ closed July down 0.75% on 17,599.40, while the Dow Jones closed the month up 4.41% on 40,842.79. 

The UK’s blue-chip FTSE 100 had a boost on 31 July, with a series of strong headline earnings supporting, while traders await the Bank of England’s next interest rate decision. The index closed the month on 8,367.98, a gain of 2.50% during July, while the FTSE 250 closed the month 6.48% higher on 21,600.71. The FTSE AIM closed on 787.02, a gain of 2.96% in the month. The Euro Stoxx 50 closed July on 4,872.94, down 0.43%. The Japanese Nikkei 225 closed the month on 39,101.82, a monthly loss of 1.22%.  

On the foreign exchanges, the euro closed the month at €1.18 against sterling. The US dollar closed at $1.28 against sterling and at $1.08 against the euro.  

Brent crude closed July trading at $80.91 a barrel, a loss over the month of 4.56%. With Middle East conflicts escalating, crude prices were impacted as markets closely watch geopolitical developments. Gold closed the month trading at $2,426.30 a troy ounce, a monthly gain of 4.09%.  

Headline inflation rate holds steady 

Consumer price statistics published last month by ONS showed that the UK headline rate of inflation was unchanged in June defying analysts’ expectations of a slight fall. 

According to the latest inflation figures, the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – remained at 2.0% in June. This was marginally above the 1.9% consensus forecast taken from a Reuters poll of economists. 

The largest downward pressure on June’s CPI rate came from the clothing and footwear sector, which ONS said was due to a higher level of discounting in this year’s summer sales compared to 2023. Hotel prices, however, rose by a significantly greater extent this June than last year, while a comparatively smaller fall in the costs of second-hand cars also put upward pressure on the headline rate. 

Just prior to release of June’s data, the International Monetary Fund (IMF) warned that the UK was among a number of countries witnessing some ‘persistence’ in inflation, particularly in relation to services inflation. The IMF added that this was ‘complicating monetary policy normalisation’ with the ‘upside risks to inflation’ raising the prospects of interest rates staying ‘higher for even longer.’ 

Cooler weather hits retail sector 

The latest batch of official retail sales statistics revealed a decline in sales volumes after unseasonably cool weather deterred shoppers, while more recent survey data suggests the retail environment remains challenging. 

Figures released last month by ONS showed that total retail sales volumes fell by 1.2% in June, following strong growth during May. ONS said June saw a decline across most sectors, particularly those sensitive to weather changes such as department stores and clothes shops, with retailers blaming poor weather and low footfall, as well as election uncertainty, for dampening sales. 

Evidence from the latest CBI Distributive Trades Survey shows trading conditions have remained difficult, with its headline measure of sales volumes in the year to July dropping to -43% from -24% the previous month. The CBI described July as a ‘disappointing’ month for retailers, blaming a combination of ‘unfavourable weather conditions’ and ‘ongoing market uncertainty.’ 

The survey also found that the retail sector expects the weak outlook to continue this month, although August’s fall in sales volumes is forecast to be at a slower rate (-32%). The CBI also noted some glimmers of optimism, with a number of retailers expressing hopes for ‘an improvement in market conditions post-general election.’  

All details are correct at the time of writing (1 August 2024) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

“Last Week’s Kings Speech… has the potential to give businesses the confidence they need to grow, invest and drive economic growth” 

Although the latest Confederation of British Industry (CBI) Business Trends Survey showed manufacturer optimism tempered slightly in July, there is an expectation that output is set to increase over the next quarter, with overall sector growth predictions now at their strongest since March 2022. 

Looking ahead, investment intentions have strengthened and total new orders are expected to be stable, with stocks of work in progress set to rise at their fastest pace in over two years. CBI Lead Economist, Ben Jones, commented, “Sentiment among manufacturers has cooled a little over the past few months, as output growth consistently underperformed expectations, but the near-term outlook remains positive amid an ongoing recovery in the wider UK economy… Last week’s King’s Speech, with welcome measures to reform planning and speed up approvals for major infrastructure projects, has the potential to give businesses the confidence they need to grow, invest and drive economic growth.” 

Chancellor’s economic statement 

On Monday, Rachel Reeves made a statement to the House of Commons following a spending audit which identified a “forecast overspend” for this year of £21.9bn. The main announcements included: 

  • spending cuts worth £5.5bn this year, rising to £8.1bn next year 
  • scrapping Winter Fuel Payments for around 10 million pensioners who aren’t on means-tested benefits   
  • cancelling the adult social care charging reforms that were due to come into effect in October 2025 
  • most NHS workers, teachers and members of the armed forces will get above-inflation pay rises of 5.5% to 6%  
  • offering junior doctors in England a two-year pay deal worth 22% on average, in a bid to halt strike action 
  • VAT at 20% will be levied on private school fees from 1 January 2025 
  • non-domiciled tax status will be replaced with a new residence-based regime from April 2025 
  • the windfall tax on profits from energy and gas companies will rise by 3% from November. 

India trade talks 

Last week, Foreign Secretary David Lammy travelled to India to kick-start ministerial talks and meet with prominent business leaders, in an effort to secure a free trade agreement. Referring to India as an ‘indispensable partner,’ the government is keen to work hard to reset Britain’s relationship, just a matter of weeks into the new Labour administration. With India soon to be the world’s third largest economy, working toward securing a deal would be significant. 

Is cash king? 

New data from UK Finance has shown that last year 1.5 million adults favoured using money for transactions, the first rise since before the pandemic, likely due to people using cash to carefully manage their finances during the cost-of-living crisis. Last year, of the 48 billion payments made, six billion were made using cash, while paying with a debit card was the most common method, representing 51% of all transactions. 

Contactless payments leapfrogged direct debits as the third most popular payment method. The data also showed that most young people chose to make payments using their watches or smartphones, with 72% of 18 to 24-year-olds choosing this payment method. Older generations are yet to catch up, with only 27% of 45 to 54-year-olds using mobile contactless methods, reducing to 8% of those aged over 65. 

The future is electric 

The latest car manufacturing data from the Society of Motor Manufacturers and Traders (SMMT) has highlighted a dip in production of 7.6% in the first six months of the year, as the focus turns to electric models. A total of 416,074 cars were manufactured in H1 2024, 34,094 less than Jan-June last year. A decline of 26.6% was measured in June due to a series of model changes, an expected reduction as manufacturers ‘retool lines to make electrified models’ following £23.7bn of investment.  

SMMT Chief Executive, Mike Hawes, commented on the recent data and future for the industry, “The UK auto industry is moving at pace to build the next generation of electric vehicles – a transition that can be a growth engine for the entire British economy. The new government’s commitments to gigafactories, a decarbonised energy supply and a faster planning system will help boost our competitiveness and sustain employment in a sector that delivers well paid, skilled jobs nationwide.” 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (31 July 2024)