{"id":1860,"date":"2021-08-26T11:52:36","date_gmt":"2021-08-26T10:52:36","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/?p=1860"},"modified":"2022-07-05T14:11:07","modified_gmt":"2022-07-05T13:11:07","slug":"news-in-review-18","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2021\/08\/26\/news-in-review-18\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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\u2018It could be appropriate to start\nreducing the pace of asset purchases this year\u2019<\/em><\/strong><\/em><\/strong><\/p>\n<\/div>\n\n

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During a week in\nwhich the news agenda was dominated by Afghanistan, the US Federal Reserve\nwarned it could start cutting back support for the economy sooner than markets\nhad previously expected. Minutes from the Fed\u2019s July meeting, released last\nWednesday, revealed a willingness to begin tapering monthly asset purchases\nbefore the year end, \u2018Looking ahead, most participants noted that, provided\nthat the economy were to evolve broadly as they anticipated, they judged that\nit could be appropriate to start reducing the pace of asset purchases this\nyear.\u2019<\/em><\/strong><\/p>\n<\/div>\n\n

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The minutes also\nstated that officials judged \u2018uncertainty was quite high\u2019<\/em> about the\noutlook and showed relatively little consensus among policymakers on a range of\nkey issues, including whether inflation, unemployment or the pandemic,\ncurrently pose the biggest threat to economic recovery. <\/p>\n<\/div>\n\n

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US markets rose\non Tuesday following FDA approval of the Pfizer vaccine and ahead of Thursday\u2019s\nFederal Reserve conference when Chairman Jerome Powell is expected to outline\nthe central bank\u2019s outlook on US economic recovery.<\/p>\n<\/div>\n\n

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UK recovery losing momentum<\/strong><\/p>\n<\/div>\n\n

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On this side of the Atlantic, a closely monitored survey, published on\nMonday, found that staff and supply shortages are taking their toll on the UK\u2019s\neconomic recovery. The IHS Markit\/CIPS flash composite Purchasing Managers\u2019\nIndex (PMI)\nfell to a six-month low of 55.3 in August, suggesting that the post-lockdown economic rebound is losing momentum. On a more positive\nnote, the PMI\u2019s measure of employment growth rose to its highest ever level in\nAugust.<\/p>\n<\/div>\n\n

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Inflation falls more than expected<\/strong><\/p>\n<\/div>\n\n

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In the last seven days, the Office for National Statistics (ONS)\nreleased a raft of economic data, including the latest inflation figures which\nrevealed a sharper-than-expected slowdown in price growth. The Consumer Prices\nIndex fell back to the Bank of England\u2019s 2% target last month, following a 2.5%\nrise in June. Commenting on the data, ONS Deputy National Statistician,\nJonathan Athow, said \u201cInflation fell back in July across a broad range of\ngoods and services, including clothing, which decreased with summer sales\nreturning after the pandemic hit the sector last year.\u201d<\/em> <\/p>\n<\/div>\n\n

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Despite\nJuly\u2019s fall, analysts still expect inflation to rise again later this year,\npartly due to the removal of a temporary hospitality VAT cut and a hike in\nenergy bills. In addition, ONS producer prices data revealed that output costs increased\nby 4.9% in July \u2013 the fastest annual rate of growth in almost 10 years \u2013 while\ninput costs jumped by a higher-than-expected 9.9%. Federation of Small\nBusinesses National Chair, Mike Cherry, commented, \u201cWhile consumer costs\nhave cooled, it\u2019s a different story for inputs, with producer prices continuing\ntheir upward march this month.\u201d<\/em><\/p>\n<\/div>\n\n

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Retail sales down<\/strong><\/p>\n<\/div>\n\n

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ONS data released\nlast Friday also showed retail sales fell unexpectedly in July; sales volumes\ndeclined by 2.5% compared to June, the largest monthly decline since January.\nAccording to retailer feedback, a combination of bad weather and England\u2019s Euro\n2020 progress kept shoppers at home, although analysts also blamed a rise in\nthe number of COVID cases which forced some consumers to self-isolate and\npotentially prompted others to stay away from the shops.<\/p>\n<\/div>\n\n

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Government <\/strong>borrowing falls<\/strong><\/p>\n<\/div>\n\n

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Last week saw publication of the latest public sector finance statistics, which showed\nborrowing continuing to ease from last year\u2019s mammoth levels. In July, the\ngovernment borrowed \u00a310.4bn; although this still represents the second-highest\nJuly number ever recorded, it was almost half the level borrowed in the same\nmonth of 2020. ONS said the budget deficit in the first four months of this\nfiscal year is now \u00a326.1bn below the Office for Budget Responsibility\u2019s March\nforecast, reflecting both stronger-than-anticipated receipts and\nlower-than-expected spending.<\/p>\n<\/div>\n\n

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\u2018Triple lock\u2019 could\nbe diluted<\/strong><\/p>\n<\/div>\n\n

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It is reported that the \u2018triple lock\u2019 \u2013 which guarantees the State Pension\nwill rise in line with the highest of earnings, inflation or 2.5% \u2013 looks set\nto be watered down. A COVID-related surge in average earnings means pensioners\ncould be in line for a rise of over 8% next year if the government honours its\nmanifesto commitment. Last Wednesday the Prime Minister\u2019s spokesperson was quoted\nas saying, \u201cI think we recognise the legitimate concerns about potentially\nartificially inflated earnings impacting the uprating of pensions.\u201d<\/em> <\/p>\n<\/div>\n\n

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Here to help<\/strong><\/p>\n<\/div>\n\n

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Financial advice is key, so please do not\nhesitate to get in contact with any questions or concerns you may have.<\/p>\n<\/div>\n\n

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The value of investments can go down as well as up and you may not get\nback the full amount you invested. The past is not a guide to future\nperformance and past performance may not necessarily be repeated.<\/strong><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

\u2018It could be appropriate to start reducing the pace of asset purchases this year\u2019 During a week in which the news agenda was dominated by Afghanistan, the US Federal Reserve warned it could start cutting back support for the economy sooner than markets had previously expected. Minutes from the Fed\u2019s July meeting, released last Wednesday, […]<\/p>\n","protected":false},"author":3,"featured_media":1861,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,112],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1860"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=1860"}],"version-history":[{"count":2,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1860\/revisions"}],"predecessor-version":[{"id":1863,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/1860\/revisions\/1863"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/1861"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=1860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=1860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=1860"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=1860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}