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Inflation letter looming as inflation keeps grip on bank base rate

The Bank of England’s monetary policy committee held base rate at 5 per cent last week amid inflation concerns.

Aegon Asset Management head of strategy William Dinning says: “Nothing much has changed from the MPC’s point of view in the last month. Inflation is a challenge and a letter triggered by inflation going over 3 per cent will almost certainly have to be written to the Treasury this month. The housing market is under considerable pressure but the broader economy is not yet clearly in recessionary conditions.”

Abbey chief economist Barry Naisbitt says: “With increasing signs of slowing output growth, the majority of MPC members must have judged that the most recent evidence of slowing economic activity needed to be balanced against both their expectation that activity would slow and that inflation indicators are high and expected to rise further.”

AM Ruthven & Associates director Alec Ruthven says “The bank has far more to consider than just property prices but there is a fine balance between restoring stability and tipping the economy over the edge.”


Qualification quagmire

Amid the relief at the RDR interim paper, one potential problem remains. It is clear that advisers are going to have to get more qualifications to around the level of the old AFPC.

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Absence management systems gone AWOL from UK’s SMEs, reports Jelf

A quarter (23 per cent)* of the UK’s small to medium-sized enterprises (SMEs) do not have an absence management system in place, according to new research from Jelf Employee Benefits. Despite 69 per cent* of organisations having a system in place, three-quarters (75 per cent) report that it is not providing them with sufficiently empowering absence or health data to inform an effective wellbeing programme.


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