News in Review

‘We will continue to work together to ensure a strong, sustainable, balanced and inclusive global recovery that builds back better and greener from the COVID-19 pandemic’

Ahead of the G7 Summit in Carbis Bay, Cornwall, later this week, where leaders from some of the world’s most influential countries are meeting to discuss major global issues, several Finance Ministers met in London at the weekend to discuss a whole host of global economic issues, including reforms to the global tax system to make it fit for the digital age. They were also joined by the Heads of the International Monetary Fund, World Bank Group and Organisation for Economic Cooperation and Development.

In what Janet Yellen, US Treasury Secretary described as a “historic achievement”, Finance Ministers from the US, UK, Germany, France, Canada, Japan, Italy and the EU, agreed to combat tax avoidance by making companies pay more in the countries where they sell their services or products. They also agreed in principle to a global minimum corporate tax rate of 15% to avoid countries undercutting each other with low tax rates. The deal is set to be discussed in more detail at a meeting of G20 Finance Ministers in Venice next month.

In a policy paper sent out following the series of meetings, the outcome was outlined, ‘We agreed concrete actions to address today’s historic challenges and as part of our renewed and urgent effort towards deeper multilateral economic cooperation.’ The strong commitment of the attendees to work collaboratively was evident, with clear follow-up intentions set out, ‘We will continue to work together to ensure a strong, sustainable, balanced and inclusive global recovery that builds back better and greener from the COVID-19 pandemic.’

Although job vacancies increase – skills shortage intensifies

A KPMG survey has highlighted how the easing of restrictions and subsequent reopening of various sectors has led to the highest demand for workers in over 23 years. Job vacancies in the UK are soaring, but candidate availability has declined at the fastest rate since 2017. According to the survey, workers are particularly needed in computing and IT, as well as the hospitality industry. As a result, KPMG has called on the government and firms to urgently address the skills gaps. Deputy Chief Executive of the Recruitment & Employment Confederation, Kate Shoesmith, commented, “With demand spiking, the skills and labour shortages that already existed in the UK have come into sharper focus – and COVID has only made them worse. This is the most pressing issue in the jobs market right now and has the potential to slow down the recovery.”

Services sector expanded at fastest rate in 24 years in May

Data released on Thursday from the UK Composite Purchasing Managers’ Index (PMI) for services, indicated that activity in the UK’s service industry grew at its fastest rate in 24 years, rising to 62.9 in May, up from 61 in April. Any score above 50 indicates growth. Economics Director at IHS Markit, Tim Moore, commented, “UK service providers reported the strongest rise in activity for nearly a quarter-century during May as the roll back of pandemic restrictions unleashed pent up business and consumer spending. The latest survey results set the scene for an eye-popping rate of UK GDP growth in the second quarter of 2021, led by the reopening of customer-facing parts of the economy after winter lockdowns.”

Travel rules updated

After a review of travel rules, an announcement was made on Thursday that Portugal (including Madeira and the Azores) was to be removed from the UK green list and placed on the amber list. The changes came into effect on Tuesday at 4am. No new countries were added to the green list and a further seven countries were added to the red list, including Sri Lanka and Egypt. All four nations are currently following the same travel rules.  

Vaccine news

Last Thursday, on the same day as official figures showed that more than half of UK adults have now had both doses, Boris Johnson received his second jab, welcoming an “amazing achievement“  and tweeting “now let’s finish the job.” Also last week, news came from the Medicines and Healthcare products Regulatory Agency (MHRA) that the Pfizer-BioNTech vaccine has been approved for use in children aged 12-15, following a ‘rigorous review.’ The Joint Committee on Vaccination and Immunisation (JCVI) must now advise government on whether this age group should be included in the UK vaccination rollout.

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.

Economic Review – May 2021

BoE upgrades growth forecast

The Bank of England (BoE) has significantly increased its 2021 growth forecast, as survey evidence continues to highlight a strong economic rebound, fuelled by the easing of lockdown restrictions and rapid vaccine rollout.

In early May, the BoE revealed its latest predictions for the UK economy, which included a growth forecast of 7.25% for 2021. This was significantly above February’s 5.0% estimate and represents the fastest annual rate of growth in over 70 years. The upgrade largely reflects the successful vaccination rollout, which the BoE believes will boost consumer confidence and pave the way for a mini-spending boom as lockdown restrictions continue to ease.

The Bank’s Governor Andrew Bailey, however, was also keen to strike a relatively cautious note, likening any recovery to “more of a bounce back” than a boom. He added, “Let’s not get carried away. It takes us back by the end of this year to the level of output that we had essentially at the end of 2019. That’s two years passed with no growth in the economy.”

This viewpoint was reinforced in the latest gross domestic product (GDP) figures released by the Office for National Statistics (ONS). While the data did show the economy grew by 2.1% in March, its fastest monthly growth rate since last August, it also revealed the economy remains 8.7% smaller than it was before the pandemic.

Economists did however suggest that the March data marks an economic turning point and more recent survey evidence shows the bounce-back is gathering speed. May’s IHS Markit/CIPS flash composite Purchasing Managers’ Index, for instance, recorded the fastest rate of growth since the index was established in 1998. Commenting on the data, Chief Business Economist at IHS Markit, Chris Williamson, said the UK was enjoying an “unprecedented growth spurt” as lockdown restrictions are lifted.

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Inflation rate rises sharply

UK inflation more than doubled in April and prices look set to continue climbing for the rest of this year, although policymakers generally expect such a rise to prove temporary.

Data released by ONS showed the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – rose to 1.5% in April, its highest level for over a year. While the figure was only slightly above analysts’ expectations, it did represent a considerable jump from 0.7% in March.

ONS said the sharp rise largely reflected a jump in prices from the weak levels recorded during the depths of the pandemic. Specifically, higher clothing and petrol prices were both significant upward contributors, while gas and electricity prices rose sharply following an increase in the default tariff cap, compared with a cut during the same month last year.

April’s data inevitably heightened concerns of soaring inflation if the global economy recovers strongly during the coming months. However, while the BoE’s latest forecast does suggest inflation will breach its 2% target, rising to 2.5% by the end of 2021, the rate is then expected to fall back to the target level over the following two years.

Policymakers have tended to play down the prospect of central banks being forced to tighten monetary policy soon. Speaking at a University of Oxford event, BoE Monetary Policy Committee member Silvana Tenreyro said, “I expect financial conditions to remain quite accommodative for a few years. I wouldn’t expect to see rates going high, certainly not by historic standards.”

In a similar vein, BoE Governor Andrew Bailey said he did not think the short-term rise in prices foreshadowed longer-term inflation problems, although he did say the Bank “will be watching extremely carefully” and would take action if necessary.

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Markets: (Data compiled by TOMD)

Major benchmarks closed in mixed territory at the end of May. In a largely subdued final day of trading ahead of the UK Spring Bank Holiday weekend, the domestically focused FTSE 250 closed the month on 22,683.95, a monthly gain of 0.83%, the FTSE 100 registered a modest gain of 0.76% in May, to close on 7,022.61. The Junior AIM index closed on 1,256.11, a loss of 2.23% in the month.

In the UK, business confidence hit a five-year high in May, with the Lloyds Bank Business Barometer showing more firms are upbeat about the economy than at any time since 2016. Confidence increased across all sectors and is the highest in manufacturing, retail, construction and services.

On European markets, the Euro Stoxx gained 1.63% in the month. Economic confidence across the eurozone hit a three-year high at the end of the month, boosted by a jump in sentiment among service sector firms, retailers and consumers, as restrictions begin to ease. In Japan, the Nikkei 225 gained 0.16% in May.

Strong economic data in the US at month end, showed that the jobs market continues to rebound. Investors await further details about President Biden’s $6trn budget plan, set to include large amounts of spending on infrastructure, education and combating climate change. At the end of May, investors brushed off a stronger-than-expected US inflation reading. Federal Reserve officials see rises as temporary and not likely to influence policy. The Dow Jones ended the month up 1.93%, while the tech orientated NASDAQ registered a 1.53% loss.

On the foreign exchanges, sterling closed the month at $1.42 against the US dollar. The euro closed at €1.16 against sterling and at $1.22 against the US dollar. Gold is currently trading at around $1,899 a troy ounce, a gain of 7.36% on the month, its biggest monthly advance since July 2020. Brent Crude is currently trading at around $69 per barrel, a gain of 4.04% on the month.


Index Value
(28/05/21 or 31/05/21*)		   % Movement
(since 30/04/21)
  FTSE 100 7,022.61 0.76%
  FTSE 250 22,683.95 0.83%
  FTSE AIM 1,256.11 2.23%
  EURO STOXX 50 4,039.46 1.63%
  NASDAQ Composite 13,748.74 1.53%
  DOW JONES 34,529.45 1.93%
  NIKKEI 225 28,860.08 0.16%

*US and UK markets closed 28/05/21 for the month of May, 31/05/21 US Memorial Day and UK Spring Bank Holiday

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Jobs market: ‘Early signs of recovery‘

The latest set of labour market statistics revealed a further fall in the rate of unemployment as well as another increase in the total number of job vacancies.

While the most recent data does show there are around three-quarters of a million fewer people on company payrolls than compared with the pre-pandemic peak, ONS said there were ‘early signs of recovery‘ in the jobs market.

The unemployment rate, for instance, fell for the third consecutive month, dropping to 4.8% in the January-to-March period, down from 4.9% in the three months to February. While some of this decline was due to a rise in inactivity rates, the data does still highlight signs of resilience and recovery in the labour market.

Perhaps most encouragingly, job vacancies continued to rise and now stand at their highest level since the outset of the pandemic. In the February-to-April period, there were an estimated 657,000 vacancies, an 8.0% increase on the previous quarter.

Furthermore, experimental statistics being trialled by ONS suggest vacancies in April were back near pre-pandemic levels as lockdown easing encouraged employers to recruit. This data echoes recruitment company reports of a rise in job advertisements across most industries, particularly the hospitality sector.

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Sales soar as shops reopen

Official retail sales statistics revealed a surge in spending during April as non-essential shops reopened, although survey data suggests demand may have since returned to more normal levels.

According to the latest ONS data, sales volumes jumped by 9.2% in April, compared to the previous month. This sharp rise was twice the average forecast in a Reuters poll of economists and follows on from the 5.1% increase recorded in March. This took April’s overall sales figure more than 10% above pre-pandemic levels.

The main beneficiaries of this surge in sales were clothing retailers, with many consumers apparently taking retail’s reopening as an opportunity to renew their wardrobes. In total, clothing sales soared by almost 70% across the whole of April.

More recent evidence, however, suggests the sales surge may have been short-lived. The Confederation of British Industry’s latest survey, for instance, found that sales in May were broadly average for the time of year, with June expected to be similarly on par. CBI Principal Economist Ben Jones commented, “The fact that sales were in line with seasonal norms is a definite improvement from earlier in the year, but this month’s survey was perhaps a touch disappointing after April’s stronger results.”

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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

“Jab by jab this life-saving programme, unparalleled in our history, is getting us back to the things we love”

Good news came over the weekend as a significant vaccination milestone was surpassed. Tipping over the marker, after over 700,000 jabs were administered on Saturday alone, the UK has now delivered over 60 million vaccinations, first and second doses combined.

Data shows that around 72% of UK adults have now had a first dose, with 44% having received both doses. The Prime Minister tweeted, “Jab by jab this life-saving programme, unparalleled in our history, is getting us back to the things we love… Please get both your vaccines when it’s your turn.”

Further positive news came over the weekend, as Public Health England research has identified that the AstraZeneca and Pfizer vaccines are highly effective against the Indian variant after two doses. Matt Hancock said receiving the second dose was “absolutely vital” and that he felt “increasingly confident” the final stage of easing restrictions in England could take place on 21 June.

After the government published advice for eight areas in England with high case numbers of the Indian variant, it was confirmed on Tuesday that the guidance is to be updated for Kirklees, Blackburn with Darwen, Bedford, Bolton, Burnley, Hounslow, Leicester and North Tyneside to clarify there are ‘no local lockdowns.’ From Monday, people in Northern Ireland have been able to return to indoor hospitality venues and meet up to six people from two households indoors. In Wales, family and friends can now visit loved ones in care homes, with Minister Mark Drakeford saying the “changes would improve the quality of life for residents and their families.” In Scotland, Nicola Sturgeon has urged people not to “lose heart” as cases increase, albeit from a very low base. Glasgow remains in level three, with restrictions to be reviewed later this week.   

Biohub launched

On Monday, the World Health Organization (WHO) and the Swiss Confederation announced plans for a global BioHub facility, to serve as a centre to enhance the rapid sharing of viruses and other pathogens between partners and laboratories globally. Dr Tedros Adhanom Ghebreyesus, WHO Director-General said, “this is an important step towards facilitating this flow of information.”

UK inflation rate more than doubles in April

The latest inflation figures for the UK were released by the Office for National Statistics (ONS) last week, showing a jump to 1.5% in April from 0.7% in March. Prices have been driven higher due to a rise in energy and clothing costs, resulting in inflation climbing at its fastest rate since March 2020. April’s inflation rise had been predicted by economists due to the easing of lockdown restrictions, but there are concerns that soaring inflation could push central banks to raise interest rates.

Further ONS data released on Friday, showed retail sales jumped 9.2% in April, due to the reopening of non-essential shops last month, which saw clothing sales increasing by 70% compared to March.

CBI advises ‘Seize the Moment’    

The Confederation of British Industry (CBI) has launched a ‘landmark’ economic plan for the next decade entitled ‘Seize the Moment’, urging both business and government to bury the Brexit hatchet and focus on building a fairer, greener economy. The CBI said it was ready to play a more proactive role in transforming the economy and it sees this year as a ‘once-in-a-generation opportunity to unite and agree to transform the UK economy.’

US stocks climb as unemployment falls

American firms are cutting fewer jobs as the economy strengthens, with new claims for unemployment benefit from US workers falling to a new pandemic low of 444,000, down from 478,000 in the previous week, the lowest since 14 March 2020. The positive job market news resulted in all major US equity indices climbing last Thursday. US stocks continued to climb on Monday as stocks benefiting from the economic reopening led the advance.

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.

Taking back control of your retirement

Consumers lack confidence and understanding about issues relating to their pensions, according to two studies. The findings reveal the need for people to fully engage with their retirement planning.

Overestimating State Pension

Savers are confused about the amount of State Pension income to which they’re entitled, as well as the age at which it can be claimed, according to a Which?1 survey. Nearly a third of people overestimate their State Pension income (by up to £50,000 over their whole retirement in some cases), while seven in ten cannot identify their current State Pension age.

These figures bring into sharp relief large holes in the nation’s pensions knowledge; that’s why Which? believes more should be done to engage and educate consumers about pensions issues, so they can better plan for their retirement.

The nation’s biggest financial worry

Meanwhile, a financial wellbeing study2 reveals that funding retirement is UK workers’ top money concern for a second consecutive year, with a third of employees listing it as their main financial worry.

The group has previously identified low engagement with later life financial topics as a major issue for employees and is concerned that it continues to be such a significant problem – not just financially, but also in terms of the impact financial worries have on their wellbeing.

Keep on track

Funding retirement is complicated, but careful planning and expert advice will put you firmly on the right track. Understanding the various options available to you and what’s best for your unique circumstances is essential, as it will allow you to make sound, informed decisions.  

1Which?, 2021

2Close Brothers, 2019

The value of investments and income from them may go down. You may not get back the original amount invested. Inheritance Tax Planning is not regulated by the Financial Conduct Authority. 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.

Sell in May?

What a relief, spring is here and hope is in the air after a long, bleak winter. For those looking to move, there’s even better news – spring to early summer has historically been the best time of year to put your house on the market1.

Proven to be the optimal time for selling your home, as gardens bloom, the milder weather in spring draws more people out house hunting and the brighter light helps properties look their best. You never know, competing buyers may prompt a potential bidding war on your property.

Here comes the sun

Although this year has been different, there are sparks of hope and positivity, so with optimism in the air, now’s as good a time as any to consider your options.

As we enter the property market’s golden season, if you’re looking for mortgage advice, please get in touch, we can help you get moving this spring. Here’s to new beginnings.

1The Advisory, 2020

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

“I do not believe on present evidence that we need to delay our roadmap”

Despite concerns growing over the spread of the Indian variant, as clusters of the B.1.617.2 continue to be discovered across the UK, at a Downing Street briefing last Friday, Boris Johnson confirmed the planned phase three easements would proceed on 17 May, “I do not believe on present evidence that we need to delay our roadmap, but I have to level with you that this could be a serious disruption to our progress and could make it more difficult to move to step four in June.”

In areas where the variant is spreading, eligible people are being urged to get vaccinated and the army have been deployed to implement mass and surge testing. In Scotland on Friday, First Minister Nicola Sturgeon announced that Glasgow and Moray will remain under level three restrictions for at least another week, after initial research suggested an outbreak in the south side of Glasgow was being driven by the Indian variant.

As lockdown rules ease in England, Wales and most of Scotland, people are now able to hug loved ones, socialise indoors in limited numbers, and visit pubs and restaurants inside, amongst other activities. The ban on foreign travel has been lifted and replaced with the traffic light system, although people in Wales have been asked to only travel for essential purposes from 17 May. In Scotland, Nicola Sturgeon has urged people to “err on the side of caution and to staycation this summer.” In Northern Ireland, lockdown rules are scheduled to be reviewed later this week.

UK economy gathers momentum

Data released shows the UK economy contracted by 1.5% in Q1 2021, following growth of 1.3% in Q4 2020. As lockdown restrictions began to ease, robust retail spending boosted economic activity in March, with the economy estimated to have grown by 2.1%, the fastest monthly growth since August 2020. There are various expectations that the economy is set to strongly rebound this year. Chief Economist at the Institute of Directors, Tej Parikh, predicted the UK economy was now on course for a bumper bounce-back this year, “The first quarter should mark the low point for the economy in 2021. The lockdown and added costs of navigating new trading terms with the EU, limited many businesses’ trading activities at the start of the year.”

However, there are concerns about the long-term damage caused by the pandemic. Head of Economics at the British Chambers of Commerce, Suren Thiru commented, “The first quarter decline should be followed by a robust rebound in the second quarter, as the effects of the release of pent-up demand, as restrictions ease and the strong vaccine rollout, are fully felt. However, with the longer-term economic damage caused by coronavirus likely to increasingly weigh on activity as government support winds down, the recovery may be slower than many, including the Bank of England, currently predict.” 

Last week, Bank of England Economist Andy Haldane said the UK economy is set to grow at its fastest pace since the Second World War, overtaking the US, he summarised, “A year from now, it is realistic to expect UK growth to be in double-digits, activity to be comfortably above pre-COVID levels and unemployment to be falling. Such a tennis ball bounce in the UK economy would put it at the top of the G7 growth league table.”

In other economic news, the latest employment data released this week from the Office for National Statistics (ONS), shows that the unemployment rate in the UK reduced to 4.8% in the three months to March, down from 4.9% in February.

US inflation surges – markets react

Last week, the US Labor Department released a report outlining a surge in inflation in April, as the economic recovery picked up. Consumer prices increased by 4.2% in the 12 months through to April, up from 2.6% in March, marking the biggest increase since September 2008. Stock markets reacted negatively as concerns intensified that higher inflation could lead the US central bank to raise interest rates more quickly than expected. Markets have since rebounded as these concerns subside, and investors focus on the reopening of economies following restrictions.

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.

Financial support for family – the norm for a third of retirees

A third of those planning to retire last year, expected to support their families financially, providing handouts totalling over £3,700 a year, or £311 a month, although 12% expect to contribute £500 or more1. Top priorities for those supporting loved ones include living and accommodation costs. Almost a quarter (24%) will give family members regular cash to cover everyday living costs such as food, and 20% cover some or all of their household bills. A further 19% pay for treats such as holidays and 15% have put money towards a property purchase.

Don’t forget your financial security

It’s natural to want to provide support to loved ones, especially with the current economic situation impacting people’s finances. However, with the pandemic also affecting pension savings, this could restrict your ability to continue to support family members. Talking to us can help you quantify how much support you can provide without compromising your financial future.

1Key, 2020

The value of investments and income from them may go down. You may not get back the original amount invested. Inheritance Tax Planning is not regulated by the Financial Conduct Authority. 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.

Pandemic leads to growing ESG awareness

The inclusion of ESG (environmental, social and governance) issues within mainstream investment strategies has been gaining in prominence during the pandemic, according to new research – and it’s a trend that’s set to continue.

The global rise of ESG – a megatrend here to stay

ESG investment has been increasingly catching the interest of investors across the globe for several years now, due to consumers’ growing desire to know where their money is being invested and the wider social and environmental impact it is having. In fact, according to a recent survey from CoreData, 75% of professional fund buyers believe that all investment funds will be incorporating ESG factors into their strategies within the next five years.

The COVID effect

The survey also found that the rise of ESG investment has been accelerated by the pandemic, with 80% of UK fund investors saying it has led them to focus more on ESG. Founder and principal of CoreData, Andrew Inwood, commented: “The pandemic has helped reset humanity’s moral compass and encouraged people to favour investments aligned with their beliefs and values.”

COP26 will keep fire burning

Environmental factors such as pollution, waste and climate change are among ESG investors’ biggest concerns, according to research1. This is likely to mean that coverage of the 26th UN Climate Change Conference of the Parties (COP26), to be held in Glasgow this November, will further boost interest in ESG investing. Across the pond, new US president Joe Biden has committed to an ambitious new climate regime, which is also expected to raise climate change and the COP26 conference higher on the world agenda. Yet another reason why ESG is set to be a watchword for 2021 and beyond.

1BlackRock, 2020

The value of investments and income from them may go down. You may not get back the original amount invested. Inheritance Tax Planning is not regulated by the Financial Conduct Authority. 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

“This unlocking amounts to a very considerable step on the road back to normality”

On Monday, the Prime Minister confirmed that the next stage of easing measures will go ahead as intended on 17 May. People in England will be able to resume numerous activities, including hugging loved ones, meeting six people or two households indoors, dining inside restaurants and visiting indoor entertainment venues such as cinemas and museums. The Prime Minister commented, “This unlocking amounts to a very considerable step on the road back to normality and I am confident we will be able to go further.”

Transport Secretary Grant Shapps made a much-anticipated announcement over the resumption of international travel last week. He confirmed that the ‘Stay in the UK’ regulation will lift on 17 May, meaning leisure travel from England will no longer be illegal. Strict border control measures will be in place and different levels of restrictions will be applied to individuals returning to England from countries based on a traffic light system. In total, 12 countries and territories have been added to the green list, including Portugal and Gibraltar. The lists will be reviewed every three weeks.

Most of mainland Scotland will move to level two restrictions from 17 May and international travel will be in line with the rules in England.

Election news

Last week, election news dominated. In England, local elections took place, with the Conservatives making significant gains, adding 13 councils. The Conservatives won the Hartlepool by-election, with a resounding majority, proving a real blow to the Labour Party, which has held the seat since 1964. Labour Party leader Sir Kier Starmer expressed his bitter disappointment in losing eight councils and has since embarked on a restructure of the party. In the Welsh Parliamentary election, Labour remains in power for another five years and in Scotland, the SNP will form the next Scottish government, but have fallen short of a majority by one seat.

The Queen’s speech

On Tuesday, the Queen outlined the government’s priorities for the year ahead, as she officially reopened Parliament. In a ten minute speech in the House of Lords, she highlighted 30 laws that ministers intend to pass in the coming year, saying the government would “deliver a national recovery from the pandemic that makes the United Kingdom stronger, healthier and more prosperous than before.”

BoE forecasts stronger growth

Last Thursday, the Bank of England (BoE) announced that its Monetary Policy Committee had unanimously voted to maintain base rates at an all-time low of 0.1%. In addition, the Bank increased its UK economic growth forecast to 7.25% for 2021, a significant upgrade from February’s estimate of 5.0%. This higher figure, which would represent the fastest annual rate of growth in over 70 years, appears to all but eliminate any possibility of negative rates this year, with economists predicting base rates could now begin rising during 2022.

The growth upgrade largely reflects the rapid vaccine rollout, which the Bank said will boost consumer confidence and will pave the way for a mini-spending boom as lockdown restrictions continue to ease. However, BoE Governor Andrew Bailey did strike a note of caution, likening any recovery to “more of a bounce back” than a boom. Mr Bailey added, “Let’s not get carried away. It takes us back, by the end of this year, to the level of output that we had essentially at the end of 2019. That’s two years passed with no growth in the economy.”

More positive economic news

Data released in the past seven days has provided further evidence of an impending strong UK recovery. The closely-watched IHS Markit/CIPS Purchasing Managers’ Index (PMI) for the service sector, for instance, rose to 61.0 in April, up from 56.3 in March, representing the fastest rate of expansion in more than seven years, which IHS Markit Economics Director Tim Moore put down to “a surge of pent-up demand… following the loosening of pandemic restrictions.”

The IHS Markit/CIPS Construction PMI also added to signs of a strengthening economy. While April’s headline figure of 61.6 was marginally down from March’s six-and-a-half year high of 61.7, the survey’s gauge of new orders reached its highest level since September 2014. Meanwhile, a survey of recruitment consultants conducted by KPMG/REC found that demand for workers in the UK is currently rising at the fastest rate in 23 years.

Full-time office return unlikely

Last week provided further evidence that most employers are not intending to bring staff back to the office on a full-time basis. A BBC survey covering 50 of the UK’s largest employers found that 43 have now decided to embrace a mix of home and office working. An Institute of Directors poll suggests almost two-thirds of firms intend to introduce a hybrid model, with staff working remotely for one to four days per week, while one in ten will allow employees to work from home entirely.

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.

Could your front door increase your home’s value?

With millions of homeowners taking advantage of the Stamp Duty holiday and putting their home on the market, eager sellers have been looking at ways to increase the value of their property. So, they might be interested in research1 that has unearthed a little-known way of adding value to your home: the colour of your front door!

The most valuable colours

According to the study, the most valuable front door colour is blue, potentially adding an astonishing £4,000 to your house value. Next most valuable is a white door, adding an average of £3,400, with red doors coming in third place at £1,800. Conversely, brown doors are the least valuable and could in fact decrease your home’s value by £700.

First impressions count

The study also consulted an environmental psychologist to gauge the impact of door colour on buyers. He said, “The colour of your front door can influence a buyer’s initial perception. Our eyes are drawn to entrance points, so a front door is often one of the first things you notice.” Therefore, the colour of your front door could potentially make the difference between a quick sale or months of waiting. That’s one job to place at the top of your springtime to do list – paintbrush at the ready!

1Sellhousefast.uk, 2020

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