The UK received worrying economic news on multiple fronts this week, with several utility companies going under and the prospect of steep rises in winter heating costs, petrol stations running out of fuel, gaps on supermarket shelves and the Bank of England signalling it may raise rates as early as December of this year.
We are halfway through September and investors have not experienced a continuation of the positive returns picture of the summer months. This is despite COVID restrictions gradually lifting (not only in the UK) and an on-track economic recovery resulting in record numbers of jobs and demand outstripping supply in many places.
Last week, we noted the increasing importance of fiscal policy, and sure enough this week the UK kicked-off the new school year with a big fiscal bang. National Insurance contributions are on the rise, along with a further tax charge on dividends to fund the NHS and social care over the next few years.
Last week felt a bit like the whole month of August. Equity markets (North America and Europe) were in the green over the past few days, and then on Friday expressed their disappointment over the weak US jobs report. Market participants discovered yet again their taste for cash-rich mega- caps in the US, especially after last week’s Jackson Hole symposium.
Inheritance Tax can cost families thousands of pounds but there are various ways to legally avoid paying this tax. Without making suitable plans, your loved ones could face a tax bill of 40% on the value of everything you own above a certain threshold.