Worldwide Financial Planning

Financial markets received a boost as UK inflation fell faster than expected. The Consumer Prices Index slowed from 8.7% to 7.9%, the biggest improvement in two years, as petrol and diesel prices fell.

Forget the direct taxation, also consider the indirect taxation: Remember when you didn’t have to pay for education, for university fees, when you didn’t have to pay for parking in a town, or when you didn’t have to pay for parking to visit your dying parent in a hospital. Just where is the money going?

A sharp drop in US inflation helped lift financial markets as US inflation dropped to its lowest in over two years. Headline CPI inflation dropped from 4% to 3% in June. Core inflation (excluding volatile food and energy costs) declined more slowly from 5.3% to 4.8%.

Take time to choose your IFA, your financial decisions, your ‘any’ decisions. Also, apply zero based thinking after you have made a decision. We often protect our mistakes to avoid the stress, but this isn’t good.

The outbreak of pessimism was due to a combination of another strong reading for US Core PCE inflation, the Fed’s most keenly watched measure of inflation, and surprisingly strong employment data. In addition, the Fed appears much keener to return to rate hikes than previously appreciated. The minutes of the Federal Open Markets Committee are usually dry affairs but the account from last month showed most members are in favour of further hikes.

To explain the hoodwink. If inflation rose one per cent next month alone and nothing for the next 11 months, inflation would be one per cent. But in 13 months’ time, the one per cent rise for next month would have left the year- on-year figure ie for those 12 months, inflation is flat – zero per cent.