Worldwide Financial Planning

It is usually good to treat a single month’s data with a healthy dose of scepticism, however, the monthly CPI reading is now stuck just under 7% where it has been since July. High interest rates are now having the restrictive effects intended on consumer activity, but inflation seems to have stopped reacting to the downward pressure. The bank’s choice is stark; is the priority inflation or economic growth?

In July, ‘Consumer Duty’ came into action, with financial firms having to prove they are doing what they need to deliver good outcomes for customers on products and services, price and value, consumer understanding and consumer support. Firms need to end rip-off charges and fees and make it simple to cancel or switch products where a customer is disadvantaged.

The Fed said the risk from high rates is now two sided and the need to tackle inflation must be balanced against the need to protect growth. After several negative weeks the watering down of the higher for longer message was well received.

You then must consider the pitfalls of an Equity Release. Those customers used to rates of around 0.5 per cent for many years, became acclimatised to that. They are now struggling to pay the interest at nearly six per cent, so they consider an Equity Release so that they don’t actually have to make monthly payments, instead allowing the debt to roll up against their home.

US business created almost 340,000 new jobs last month, far more than expected. The number of people quitting their jobs increased slightly but this remains well below the recent average, while US manufacturing has remained far more resilient than expected.

The government has mooted a potential change in Inheritance Tax rules - a tax which is rated as the least popular tax, well below Value Added Tax (VAT), a tax where it's hard to see how they add any value at all.