‘Inflation slips to a 14-year low’ It was down to just 0.5% in December. It’s what we’re told governs interest rate policy, set by the totally independent Bank of England. Many, like me think the most likely time for a rise is just after the election. Which would, of course, be a totally non-political coincidence. The Bank’s Governor warned this week that deflation is now possible. The prospect seems to have made many misty-eyed for the good old days of the 1970s, when we knew how to make prices go up in style. The difference was that then we had unions to make sure wages went up too. Now we have employers who are more likely to put them down. Even the music was better in those days. But I would say that, wouldn’t I. More election news Many clients are deferring Inheritance Tax planning, betting on a Tory election win and the keeping of their promise to increase the nil rate limit to £1m (from £325,000). Rumour has it this will come with a price, with limits on, for instance, business relief as they giveth with one hand etc.. Believe all of it when you see it. And, yes, you heard it here first: Glastonbury-ticket-style demand (ask your kids) and crashing websites as those Pensioner Bonds finally went on sale. I’m still not clear why theyre offering rates at least 50% above the rest of the market. Election bribes are surely a thing of the past. Mortgage rates plummet after demand decreased We heard this week that ‘mortgages have never been cheaper’. Theyve also never been more difficult to get. Here’s some crazy economics. You restrict supply then reduce prices to boost demand. Im not letting you have any chocolate. But Im going to make chocolate cheaper to make you want it even more... ‘UK spent £1bn on foreign aid in 8 weeks’ Commentators (and HM Opposition, of course) were getting rather het up that civil servants had ‘rushed’ into spending the aid budget, in ‘just eight weeks’! Not such a big deal. Any available cash is spent within eight minutes in this house. Advisers will pay £4.2m pension ‘guidance’ levy At last we know how the promised free advice for retirees, when the new pension rules are introduced, will be provided. We advisers will pay for it, along with the insurance companies. So thats alright then. More soon, Philip
Posted on: Mon, 19 Jan 2015 07:34:03 +0000