Economic Review – April 2023

Recent signs of economic resilience

While the latest gross domestic product (GDP) statistics revealed that the UK economy stagnated in February, recent survey evidence paints a more positive picture with signs of ‘encouraging resilience’ and ‘growth momentum.’

Official data released last month by the Office for National Statistics (ONS) showed that the economy saw no growth during February. ONS said that a strong rise in construction activity had been offset by a contraction in the services sector which was hit by a series of strikes by public sector workers, including teachers and civil servants.

Despite February’s flat performance, an upward revision to January’s growth figure from 0.3% to 0.4%, means that the UK is now likely to avoid a contraction across the first quarter of this year as a whole. Indeed, in the three months to February, the economy actually expanded by 0.1%.

Responding to the GDP data, Chancellor Jeremy Hunt said that the numbers showed there is “absolutely no room for complacency.” However, he did note that the economic outlook was “brighter than expected” and said that the UK does now seem “set to avoid recession.”

Survey data released towards the end of last month added to signs that the UK may now defy forecasts of an impending recession. The preliminary headline figure from the S&P Global/CIPS UK Purchasing Managers’ Index, for instance, rose from 52.2 in March to 53.9 in April. This represents the strongest reading for a year and was the third consecutive month that the figure had been above the 50 threshold that denotes growth in private sector output.

Commenting on the survey’s findings, S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The key takeaway is that the economy as a whole is not only showing encouraging resilience but has gained growth momentum heading into the second quarter.”

Inflation remains stubbornly high

The latest official consumer prices data showed that the UK headline rate of inflation remains in double digits, making it more likely that the Bank of England (BoE) will sanction another base rate hike at its forthcoming monetary policy meeting.

Data released last month by ONS revealed that the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – stood at 10.1% in March. Although this was lower than the previous month’s figure of 10.4%, it was well above the 9.8% predicted in a Reuters poll of economists and the 9.2% forecast that had been released by the BoE in February.

ONS said the largest downward pressure on March’s rate came from the transport sector as the price of motor fuels continued to decline. Further sharp rises in the cost of food, however, saw the CPI rate remain at a stubbornly high level, with prices across the food and non-alcoholic drinks category rising by 19% in the year to March, the fastest rate of increase for over 45 years.


March’s inflation statistics were the last significant data release before the BoE’s Monetary Policy Committee (MPC) next convenes and policymakers would have been disappointed not to have seen a more significant drop in inflationary pressures. The MPC is scheduled to announce its interest rate decision on 11 May with analysts now typically expecting another quarter percentage-point rise.

Recent comments made by BoE Deputy Governor Dave Ramsden appeared to confirm his desire to raise rates. Writing in The Times, the MPC member said, “When I look at where inflation is and where it needs to get to, I’m more focused on making sure that (we) stay the course in terms of the monetary policy decisions needed to get inflation back to target.”

Markets (Data compiled by TOMD)

At the end of April, global markets closed largely in positive territory. Although inflation remains a concern, stock markets closed higher as investors considered fresh economic data and a raft of corporate earnings.

In the UK, the FTSE 100 ended the month on firmer ground, supported by gains in energy stocks. The blue chip index closed the month on 7,870.57, a gain of 3.13%, while the mid cap FTSE 250 closed up 2.62% on 19,425.14, and the FTSE AIM closed April on 829.94, a monthly gain of 2.55%.

Despite weak economic growth in Q1, some positive earnings landed stateside, boosted by some strong results from banks and tech firms. In the US, the Dow Jones index closed the month up 2.48% on 34,098.16, while the NASDAQ closed the month up 0.04% on 12,226.58.

On the continent, the Euro Stoxx 50 closed April on 4,359.31, a gain of 1.03%. In Japan, markets traded higher after the Bank of Japan retained its monetary policy. The Nikkei 225 closed the month up 2.91%, on 28,856.44.          

On the foreign exchanges, the euro closed the month at €1.14 against sterling. The US dollar closed at $1.25 against sterling and at $1.10 against the euro.

Gold closed the month trading at $1,982.55 a troy ounce, a small monthly gain of 0.19%. The price of gold fell at month end as stronger-than-expected inflation in the US and jobs data weighed, raising expectations of further rate hikes. Brent crude closed the month trading at around $80 a barrel, a small monthly gain of 0.38%.

Rain dampens retail sales figures

Official data shows that sales volumes fell by a greater-than-expected amount in March with retailers blaming poor weather conditions for a reduction in shopper numbers.

The latest ONS statistics revealed that total retail sales volumes fell by 0.9% in March compared to the previous month’s figure. This decline was driven by the sixth-wettest March on record, which hit clothing retailers and garden centres, while food store sales also fell as consumers continued to be hit by soaring prices and shortages of some products.

ONS Director of Economic Statistics Darren Morgan, however, noted that the broader trend was less subdued than March’s figures alone suggest. Mr Morgan said, “A strong performance from retailers in January and February means the three-month picture shows positive growth for the first time since August 2021.”

Data from GfK’s latest Consumer Confidence Index also points to rising consumer optimism. The headline index increased for the third month in a row to reach -30 in April; this was six percentage points higher than March and the strongest reading since February last year. Consumers’ expectations for the economy and prospects for their personal finances both rose, along with shoppers’ willingness to make expensive purchases.

Further fall in job vacancies

The latest batch of employment statistics revealed a rise in the rate of unemployment and a fall in the number of job vacancies reflecting softer conditions in the labour market.

During the December to February period, the unemployment rate edged up to 3.8%, from 3.7% in the previous three months, to reach its highest level since the second quarter of 2022.

The labour market update also revealed that the total number of job vacancies fell for the ninth month in a row, falling by 47,000 in the January to March period. ONS said that companies had blamed ‘economic pressures’ as a factor for holding back on hiring new staff, although the statistics agency also noted that vacancy numbers still remain at a historically high level.

There was, however, a rise in the number of people looking for work principally driven by more young people leaving full-time education to find a job. In the three months to February, the employment rate edged up to 75.8%, 0.2 percentage points higher than in the previous three-month period, reflecting growth in the number of part-time employees and self-employed workers.

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.

All details are correct at the time of writing (02 May 2023)

Residential Property Review – April 2023

Residential market update

Demand, sales and new listings all remain in negative territory, according to the latest UK Residential Survey from the Royal Institution of Chartered Surveyors (RICS), with agreed sales dropping to -31% this month, below the -25% recorded in February.

New buyer enquiries, meanwhile, were down by a headline net balance of -29% in March, virtually unchanged from a reading of -30% a month earlier. This downturn is consistent across the UK, with nearly all regions posting a negative return.

Near-term expectations suggest this pattern is set to continue, although the long-term outlook is more positive. For the next twelve months, the net balance for sales expectations came in at +1%, the first time this measure has been out of negative territory since March 2022. A separate report from Savills suggests that demand is slowly recovering, with new mortgage approvals rising to 33% below the pre-pandemic average in February, up from 41% below in January.

On the supply side, the volume of fresh listings coming onto the market fell slightly in March according to RICS respondents, with a net balance of -6%, compared to -4% the previous month. In contrast, the Savills report states that new instructions surged in March, with data from TwentyCi noting the supply of homes on the market rose to 25% above the pre-pandemic average.

More million-plus sales in 2022

Properties valued at over £1m made up 3.21% of all residential property sales in 2022, according to the Land Registry, compared with 2.75% a year earlier.

The figure has almost doubled since 2019 (1.78%), led mostly by a surge in flats and maisonettes, which are attracting the highest average prices in the £1m-plus market. Last year, the average price paid for high-end flats and maisonettes was £1.91m, ahead of terraced (£1.81m), semi-detached houses (1.66m) and detached houses (£1.62m).

Detached houses still dominate the number of sales, accounting for more than half of all £1m-plus sales. Next up is terraced houses (23%), followed by semi-detached houses (13%), and flats and maisonettes (12%).

Race for less space?

The number of people looking to downsize has risen notably since last September, new research by Savills shows, with more than half of agents seeing an increase in the number of downsizers on their books.

According to Savills, ‘right sizers’ are the biggest group of homeowners currently considering a move, with 41% of those respondents saying they were hoping to downsize.

Andrew Perratt, Head of UK Residential at Savills said, “Equity-rich older homeowners are some of the best placed to move in today’s market as they are less likely to be impacted by higher mortgage costs… Our downsizer vendors are telling us that they will prioritise using the extra equity to help family with their finances, or to supplement a retirement fund and reduce overheads.”

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.

All details are correct at the time of writing (20 April 2023)

Commercial Property Market Review – April 2023

Investor confidence returns as pricing plateaus

UK commercial investment volumes totalled £5.6bn in Q1 2023, according to a report from Savills, the second lowest quarterly volume since 2009.

Amidst a volatile and unpredictable economic backdrop, investment volumes were lower than any quarter except Q2 2020. The average Savills prime yield now stands at 5.57% after yields in industrial and regional offices moved inwards by 25 basis points.

Inflation figures released by the Office for National Statistics (ONS) continue to remain high with the consumer price index (CPI) rising to 10.4% in February and only dropping to 10.1% in March. The report states that investors are now in ‘wait and see’ mode, with many experts predicting that investment volumes could trend upwards later in 2023, should a market recovery materialise.

Commercial landlords at risk of non-compliance

One in every 20 square metres of commercial property space could be at risk of non-compliance with the Minimum Energy Efficiency Standards, according to a release by Knight Frank.

Since the start of April, all tenanted commercial property buildings across the UK have needed an energy performance certificate (EPC) rating of at least an E under the Minimum Energy Efficiency Standards (MEES).

From the 5% of commercial property floorspace currently at risk, offices (7.5%) and retail (5%) have the most ‘F’ or ‘G’ grade space. Hotels (2%) are the least at risk, though some experts think this may be an underestimate given that many don’t require EPC ratings until a sale process is executed.

The stakes are high for landlords since buildings that fall short of the new standards could incur fines of up to £150,000.

Higher vacancy rates for Scottish offices

Office vacancy in Scotland has risen to its highest level in seven years, according to CoStar Group, reaching 10.3% last month.

As occupiers continue to reassess their space needs, vacant office space has increased by 51% since the first lockdown. The amount of unoccupied office space now stands at 10.9m sq. ft across Scotland.

A year ago, this was 9.2m sq. ft – and 7.2m sq. ft in March 2020. Since the pandemic began, net absorption of office space across Scotland has been negative.

Grant Lonsdale from CoStar Group, commented, “While the headline figures make for a sobering read, our data shows a mixed picture by building grade, age and location. Broadly speaking, firms are gravitating towards the newest and best offices, whether they are based in Edinburgh, Aberdeen, Stirling or elsewhere.”

London office moves on the up

In a turbulent market, 2022 saw the highest number of Central London office deals on record, according to the newly released London Moves report.

Some 590 leasing transactions took place across the year, driven by a 58% year-on-year increase in sub-25,000 sq. ft deals, the report notes. In contrast, larger 100,000+ sq. ft deals decreased from 15 in 2021 to 10 in 2022.

New Central London occupiers increased to 63 in 2022 thanks in part to 33 relocating from outside Central London. “Companies have responded to the challenges of the past few years by focusing on what’s right for their business” commented Ben Cullen, Head of Offices UK.

All details are correct at the time of writing (20 April 2023)

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.

The best (retirement) gift for your child?

With the cost of children’s birthday presents and parties often totalling hundreds of pounds – could there be a better way to provide for your child or grandchild? 

Investing in a pension for your child can provide numerous long-term benefits and go some way to helping them secure a financially stable future. Setting up a pension for your child can also help teach them about the importance of saving and investing for the future. 

Who can set up a child’s pension? 

A parent or legal guardian can set up the pension; this can be done as soon as the child is born. 

Who can contribute? 

If you’re a grandparent keen to help out, the good news is that anyone can contribute into the pension, as well as godparents, relatives or friends. As a parent, you manage the pension saving plan until the child turns 18. 

What happens when they turn 18?  

Whilst they gain control at 18, they won’t be able to access the money until they reach the normal minimum pension age. 

How much can you contribute?  

Under current rules you can pay up to £2,880 into a children’s pension each year. This will then receive basic rate tax relief, so the government will boost this to £3,600. The majority of people setting up a children’s pension won’t pay this much in, instead choosing to make smaller contributions, which will still build up over time and benefit from tax relief. 

Why choose a children’s pension? 

It may seem odd thinking about a pension for your child when they are so young, but not only will it help your child later on in life when they think about retirement, but also help with the amount they might contribute into their pension during their lifetime, potentially freeing up more money to fund other life events. 

What about a Junior ISA (JISA)? 

Another worthwhile tax-efficient children’s saving option is a JISA. One key difference between children’s pensions and JISAs is that with the latter, your child can access the money when they turn 18. With any pension, the money can only be used to save for retirement. 

The early bird 

Investing in a pension plan for your child can provide them with the financial security they need to achieve their goals in the future. By starting early, they can benefit from compound interest and reinvested dividends, tax benefits, and the potential to grow their savings over time. 

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.  

Unaffordable deals trap mortgage prisoners

The Financial Conduct Authority (FCA) has been reported to estimate over a quarter of a million homeowners are trapped on mortgage deals because their lenders have become inactive or unable to authorise new products1. 

What could change? 

Many of these ‘mortgage prisoners’ are no longer able to keep up with repayments, prompting campaigners to reiterate their calls for government action to free the prisoners from unaffordable deals. 

After the latest Bank Rate rise, the situation has worsened, especially for those on variable or tracker rates. In total, more than 750,000 households are now at risk of mortgage default, according to the FCA. 

1FCA, 2023 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Think carefully before securing other debts against your home. 

News in Review

“With food price inflation likely to slow in the coming months as we enter the UK growing season, we expect wider inflation will continue to ease”

The latest figures from the Office for National Statistics (ONS) highlight that the Consumer Prices Index (CPI) increased by 10.1% in the 12-month period to March 2023, down from 10.4% in the year to February. A poll of economists had predicted that inflation would fall below 10% in the month, but soaring food and drink prices meant the fall was only 0.3%.

Although lower than the peak of 11.1% last October, double-digit inflation is persisting. Among the most notable upward contributor to CPI was the food and non-alcoholic beverages sector, where prices rose by 19.2% in the year to March. This annual rate is the highest seen in over 45 years. Products with the largest price jumps included olive oil (49%), milk (38%) and ready meals (21%).

Chief Executive of the British Retail Consortium, Helen Dickinson, predicts that food price inflation is likely to slow in the coming months, “While households will be pleased to see that inflation may have passed its peak, prices are still high… With food price inflation likely to slow in the coming months as we enter the UK growing season, we expect wider inflation will continue to ease.”

She continued, “Prices for consumers will remain high, especially as household bill support is lifted. Retailers remain committed to helping their customers and keeping prices as low as possible, by expanding value ranges and offering discounts for vulnerable groups.”

Following the latest inflation figures there are expectations that the Bank of England will look to raise Bank Rate again in May as inflationary pressures persist.

UK inflation is higher than in many other western countries, including France, Germany, Italy and the US. Official data released last week showed eurozone headline annualised inflation had eased to 6.9% from 8.5%. It is reported that persistently high core readings indicate European Central Bank policymakers will look to raise interest rates again at their next meeting in early May.

Retail sales impacted by the weather

UK retail sales data released by ONS on Friday show a higher decline in sales volumes than expected, with early estimates registering a 0.9% fall in March, following a 1.1% rise the previous month. Volumes were impacted by soaring inflation, food availability and the wet weather dampening shopping activity, with people choosing to stay at home. The data release goes on to state, ‘Looking at the broader picture, sales volumes rose by 0.6% in the three months to March 2023 when compared with the previous three months; the first three-month on three-month rise since August 2021.’

Consumer confidence – a “sudden flow of optimism”

According to the latest consumer confidence measure on Friday from GfK, despite cost-of-living pressures, British consumers were their most upbeat in over a year this month as they took a more positive view of the health of the economy and their own financial circumstances. The rebound in April was clear, with the index rising six points to -30 in April, the highest level since February 2022. In addition, a measure regarding personal finances over the forthcoming year rose eight points to -13, and expectations for the UK economy in general rose six points to -34.

Client Strategy Director at GfK, Joe Staton commented on the findings, “As food and energy prices continue to rise, and inflation eats into wages, the cost-of-living crisis is a painful day-to-day reality for many. But are all consumers buckling under the pressure? On the evidence of April’s confidence figures, the answer is no. Instead, there’s a sudden flowering of optimism with big improvements across the board.”  Mr Staton continued, “The brighter views on what the general economy has in store for us, with April’s six-point rise cementing a 20-point improvement since January, could even be seen as the proverbial ‘green shoots of recovery.”

Private sector growth

Business activity has grown for the third consecutive month, the latest purchasing managers’ index (PMI) has shown. In April, service sector growth underpinned the fastest rise in UK private sector output for a year, with firms reporting resilient consumer spending, according to the latest survey results. The index registered a score of 53.9 this month, up from 52.2 in March, and above analysts’ consensus forecasts of 52.5.

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 (26 April 2023)

Rising prices adding to retirement costs

It can be difficult to understand what funds you’ll need to finance the retirement you dream about and how this compares to your projected pensions income. It’s even harder to keep track when the cost of living is spiralling. 

Setting standards 

The Pensions and Lifetime Savings Association (PLSA) developed its Retirement Living Standards1 to help us to picture what kind of lifestyle we could have in retirement at different levels and what a range of common goods and services would cost for each level. 

The cost of a Minimum lifestyle for a single person has increased from £10,900 in 2021 to £12,800 in 2022, a rise of 18%. For a couple, an income of £16,700 required in 2021 rose to £19,900 (19% increase). Costs factored into this lifestyle include – £96 for a couple’s weekly food shop, eating out about once a month, a week’s annual holiday in the UK and some affordable leisure activities about twice a week. But there is no budget to run a car. 

Want more than the minimum? 

At the Comfortable Retirement Living Standard, retirees can expect more luxuries like regular beauty treatments, three weeks, holiday in Europe each year and theatre trips. The weekly food shop for a couple in this lifestyle amounts to £238 per week. At this level, the cost of living increased 11% to £37,300 for one person and 10% to £54,500 for a two-person household. 

How much do I need to save?  

For a comfortable retirement PLSA estimate that a couple who are both in receipt of the full new State Pension would need to accumulate a retirement pot of £328,000 each, based on an annuity rate of £6,200 per £100,000. 

Your lifestyle, your choice 

If you’re concerned about your retirement planning we can help you prepare for the lifestyle you want to enjoy. Retirement planning involves visualising your key goals for your retirement years and setting up a plan to help you achieve those goals through financial planning. 

1PLSA, 2023 

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation. 

Mortgage holders impacted

Rising rates have been a feature of the mortgage market for almost a year. Following the latest Bank Rate rise, how should mortgage holders react? 

What happened? 

With Bank Rate at its highest level in 15 years, in the short term, this will affect anyone with a tracker or variable rate mortgage through higher repayments. Those with fixed-rate mortgages are protected for now but could be forced to pay more when their current deal ends. 

What next? 

With inflation still high, the Bank of England is expected to continue increasing Bank Rate until the middle of 2023, at which point it is predicted to peak. 

Interest rates seem high now after a decade of ultra-low figures, but the current rates fit into longer-term market cycles. 

Finger on the pulse 

We’re here to keep things in perspective and help you find the most suitable mortgage for your needs. 

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

Rebounding investor confidence

A recent survey1 suggests investors are becoming more confident despite ongoing challenges on the economic front. While this is certainly encouraging, maintaining a long-term outlook and retaining a strong sense of discipline in investment positioning remains a prerequisite for any successful investor. 

An air of optimism 

It’s fair to say 2022 was a turbulent year for global markets with the war in Ukraine, soaring inflation and rising interest rates weighing heavily on a difficult 12-month period. Towards the end of the year, however, markets did stage a cautious recovery despite ongoing fears of a looming recession. 

Inflation expected to fall 

The final quarter of last year also witnessed a rebound in investor sentiment, with the same survey reporting a seven-percentage point rise in confidence in the global economy, although this was before the recent woes in the banking sector. This optimism was driven by hopes that inflation has now peaked and is set to continue falling in the months ahead; a view reflected in the International Monetary Fund’s latest economic musings2 which predict global inflation will drop from 8.8% in 2022 to 6.6% this year and 4.3% in 2024. 

Young guns 

Data from the survey also revealed a majority of investors were either positive or ambivalent about last year’s market volatility and its impact on their investing mindset. This was particularly true for younger investors with three-quarters of 18 to 34-year-olds either positive or indifferent compared to six in ten over-55s. This variation will partly reflect differing retirement time horizons, with younger investors more able to adopt a longer-term view. 

Investor discipline is key 

This is clearly encouraging as maintaining a long-term philosophy based on prudent risk management principles and avoiding panicked decisions has always been a key element for successful investing, maintaining discipline in investment positioning. In practice, this means achieving an appropriate level of diversification and understanding how to blend investments – that’s what we do. 

1eToro, 2023 

2IMF, 2023 

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.  

News in Review

“The UK economy has lost momentum”

New data from the Office for National Statistics (ONS) shows that the UK economy flatlined in February as strikes by public sector workers weighed on growth. Despite consensus estimates from a poll of economists forecasting a 0.1% increase in the month. The flat month-on-month performance can be attributed to the offsetting of construction growth by striking workers.

In more positive news, ONS revised up its estimate for January’s economic growth from 0.3% to 0.4%, meaning the UK is well positioned to avoid contraction in the first quarter of this year. This upward revision means the economy would need to reduce by 0.6% in March for Q1 to record a contraction. In response to the data release, Chancellor Jeremy Hunt said the economic outlook was “brighter than expected” with the UK “set to avoid recession.”

Suren Thiru, Economics Director at the Institute of Chartered Accountants in England and Wales (ICAEW) expects recession fears “are likely to stalk the UK for some time” as borrowing costs and higher taxes offset falls in inflation and government support for energy bills. She commented, “These figures suggest that the economy has lost momentum as sky-high inflation and strike action continue to drag on key drivers of UK GDP, notably services and industrial production… a struggling economy and strong likelihood of materially lower inflation should give the Monetary Policy Committee sufficient scope to keep rates on hold next month.”

Last week the International Monetary Fund (IMF) cautioned in their latest World Economic Outlook that they expect the UK to be one of the most poorly performing major economies in 2023, with expectations of a 0.3% reduction. The UK and Germany are the only two G7 countries predicted to contract this year.

“The system is in a much more robust condition”

After the recent unrest experienced in the financial sector, with the collapse of Silicon Valley Bank and the purchase of failing Credit Suisse, speaking at an IMF meeting last week, Bank of England (BoE) Governor Andrew Bailey commented, “I do not see the evidence that we’ve got on our hands what I would call the makings of a 2007/08 financial crisis. I think the system is in a much more robust condition – that’s the first point of defence.”

Believing that the reforms established following the 2008 financial crisis are being effective, Mr Bailey also feels that authorities are now better equipped to deal with any potential problems, “The post-crisis reforms to bank regulation have worked. Today I do not believe we face a systemic banking crisis. When I look at the UK banks, they are well capitalised, liquid and able to serve their customers and support the economy.” A review is being conducted into the bank deposit insurance scheme.

Banknote demand at 20-year low

Worldwide demand for banknotes is at its lowest point in 20 years, according to De La Rue, which produces a third of the world’s banknotes. With the rise of card and contactless payments, cash usage has fallen sharply in the UK. In 2017, debit cards overtook cash as the most popular payment method for the first time; only 15% of payments are now made in cash, compared with 60% a decade ago.

Unemployment rate rises again

Job vacancies have fallen for a ninth consecutive month, according to latest official unemployment data released by ONS on Tuesday. The uncertain economic outlook is impacting job certainty, the figures suggest, but the employment rate edged up to 75.8% in the three months to February.

About 220,000 more people were seeking work between December and February than in the three previous months. In the same period, however, the unemployment rate rose to 3.8%, up slightly from 3.7% in the previous quarter.

Annual growth in regular pay, excluding bonuses, was 6.6% between December and February, ONS said. However, with prices rising at more than 10% in recent months, regular pay fell by 2.3% when adjusted for inflation.

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 (19 April 2023)