Worldwide Financial Planning

With confusion and worry (better described as negative imagination), it’s not that difficult for society to develop a ‘wait and see’ attitude, which could inevitably dry up supply, or demand, which creates the self-fulfilling prophecy of: The housing market will slow. And it did.

The early introduction of this tax cut raises the possibility of an election in early 2024 as the Conservatives weigh up whether this is long enough for workers to feel the benefit against the potential for a rate hike if inflation stays high. The Office for Budget Responsibility’s assessment of the outlook was lukewarm at best.

An end to the interest rate hiking cycle would be welcomed by US consumers, who have seen new US mortgage rates spend four weeks above 7% for just the third time this century. Despite this, new home loan applications increased by 2.3% in the week ending August 25.

While the market is easily fooled by headlines so too, unfortunately, are central banks. The true state of the economy won’t be clear for months so policy makers have to make do with the data they have, while the impact of today’s decisions won’t be apparent for another year.

The outlook hasn't really altered but investors are expecting both inflation and interest rates to remain higher for longer.

So start with learning from the past. Why didn’t other resolutions work and why did some actually succeed.