Inflation is now at an eight-year high. A depressed housing market has also played its part in the figures. The headline retail price index, for example, was unchanged at 2.9 per cent, with the housing component counterbalancing the higher cost of oil. Both measures, though, are above targets set by the Chancellor, while there remains little evidence to support the belief that oil will retrace its rise in the near future.Perhaps the most striking message from the publication of the minutes of the August MPC meeting was that governor Mervyn King had voted against reducing rates. Only five of the nine policymakers were behind the reduction from 4.75 per cent to 4.5 per cent. This is the first time the governor of the Bank of England has been in the minority. Among the arguments put forward by those not in favour of a rate cut was the fact that the UK economy was still operating close to capacity while most recent domestic economic indicators had been a little stronger than expected. But the majority view reflected concerns over the slowdown in household spending and investment. The weak state of the housing market added weight to their argument while the labour market was perceived to be weakening. The possibility of a reversal of this decision was raised, though, with the minutes stating that the committee would not “preclude a rise in rates in the future if the data warranted.” Following on from the previous week’s quarterly inflation report from the Bank of England, it all seemed to add up to a warning shot across the bows of this bull market. Yet, confidence continues to build, with support for the continued rally coming from buoyant company results and a benign global economic picture. The positive cashflow experienced by institutions appears to be of equal importance, with the view that much of the rebalancing from equities to bonds must be consigned to history. A senior colleague of mine said: “This bull run is starting to look as though it has legs.” He even suggested it could have years rather than weeks to run, although last week shows markets do not move in a straight line. Brian Tora is head of the intermediary division at Gerrard Investment Management
The HomeBuy Scheme is in turmoil, with confusion over how it will be implemented, who will be involved and whether those lenders willing to take the plunge will be ready for trials of the scheme in April 2006.
Standard Life with-profits policyholders have lost out on more than 1bn of investment profit since the insurer was forced last year by the FSA to sell billions of pounds worth of equities from its with-profits fund, according to research. Can the Government continue to accept that the Treasury is the right depart-ment to have responsibility […]
The biggest surprise about Halifax launching a fixed-fee conveyancing service is – why hasn’t it done it before?
New investors in the buy-to-let sector have halved in the past year, according to figures released by Mortgage Trust, but brokers say established landlords are ensuring that the market remains fluid.
Johnson Fleming has partnered with Openwork in order to make its managed auto-enrolment service available to Openwork’s advisers.
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
The curious goings-on in the world of financial services
Experts have played down any immediate moves from the FCA towards those firms that are not prepared for Mifid II regulation that comes into force on 3 January 2018. However, concerns remain that a “material number” of small asset managers have not yet started preparing for the major European regulation. The FCA expects firms to […]
OMGI chief executive and star fund manager Richard Buxton is set to lead a management buyout of the single-strategy funds division of Old Mutual Wealth with the backing of TA Associates. The £550m deal is set to be announced before Christmas, Sky News reports. The buyout is part of Old Mutual’s managed separation, which is […]