Connor Coombe-Withlock is exploring for MFS the current news and trends in the financial and property markets. Discover what he’s got to say.
The great British pub to the rescue
13 January 2023
Another month locked in, another step in the right direction. Our economy defied expectations in November, with GDP rising 0.1% on the previous month. This rise was driven by the technology sector and, more importantly, a strong showing from pubs and bars. Despite the national tragedy of not winning, we were boosted by the World Cup.
There can be no doubt, we still have a long road ahead of us. But that doesn’t mean we can’t find time to enjoy ourselves along the way. After two long years of social bubbles and stroll quotas, I say we’ve earned it. And it looks like I’m not the only one.
Whitbread and Mitchells & Butlers, two major players in the pub and hospitality scenes, saw a spike in sales and demand over the festive period. After the Omicron variant effectively cancelled Christmas for many in 2021, it appears we were over not enjoying ourselves. We made up for lost time, and rightly so.
Budgets are stretched, and people are worried, but we all want the situation to get better. Consumers crave enjoyable services and a sense of community. If we can get the basics right, it may put us in the right frame of mind to tackle everything else – Cheers!
Why haven’t base rate hikes worked?
16 December 2022
Another MPC meeting, another hike. The base rate finished up at 3.5% at the end of 2022, as the Bank of England desperately played catch up. Commentators begged Andrew Bailey to act quicker in fending off inflation, but this pleading fell on deaf ears. We were assured that we were simply witnessing “transitionary” inflation. All would be well in a few months.
By the time the BoE realised inflation was here to stay, it was too late. Interest rates rose to the highest level seen for over a decade, but this did little to help. Inflation has stubbornly sat around to 10% mark for months now.
But while it’s easy to point a finger at the BoE for not acting sooner, a small part of me has sympathy for the central bank. There’s only so far monetary policy changes can go to curtail a global pandemic, war, and an energy crisis. Our “perma-crisis” is driven by global causes the BoE have little say over.
Nevertheless, Mr Bailey believes inflation has peaked. A bold statement considering his track record. We’ll find out if he’s right over the coming weeks. But even if we have plateaued, there could be a long road ahead of us.
Some good news for a change – the arrows are starting to go in the right direction
14 December 2022
Amazingly, if you look hard enough, it is possible to find some good news among the headlines. Our collective efforts appear to be paying off. Albeit, slowly.
Although it might not have felt like it, your costs dipped in November. Inflation dropped from 11.1% to 10.7%. It’s still painfully high, but at least we’re heading in the right direction. Who knows, maybe Andrew Bailey’s optimism will prove warranted by the summer. You’ll be able to enjoy the sun without worrying about the cost of the sunscreen.
Also, the lines we want to go up, have gone up. UK house prices grew 0.3% in October. I know we like to see “record highs” but in the current climate, I think we should all just be relieved to see any growth. An increase is an increase – no matter how small.
GDP is also on the up, rising by 0.5% in October. Economists were not impressed, noting we’re still likely to face a bleak 2023. But I think there was a nugget of hope in the figures. We saw the rebound in October after September’s mourning period for the late Queen, where we shut-up-shop.
A reminder that there’s people behind the numbers. A society that, when needed, can show respect, restraint, and reverence. Our economy – our society – is tenacious. With perseverance, I’m sure we’ll get out of this mess. Keep calm and carry on.
Do we really want to be defined by goblins?
14 December 2022
The Oxford dictionary’s word of the year left me amused and perplexed. Brits, with their wisdom and sense of humour, voted “goblin mode” to be the word that defines 2022.
Now, I’m no expert. And I’m sure it’s somehow linguistically correct. but isn’t goblin mode technically two words? Regardless, the choice is telling.
As the Oxford Dictionary defined it: “A type of behaviour which is unapologetically self-indulgent, lazy, slovenly, or greedy, typically in a way that rejects social norms or expectations.” This idea (way of life?) has been around since at least 2009, but really came to the forefront during the pandemic. As the world ground to a halt, it provided many of us with the most precious resource of all: time.
Millions of us, via furlough and other schemes, suddenly found ourselves with no work to do. Commuting was cancelled en masse and, unfortunately, many lost their jobs entirely. We had little to do but wait for better days. So, we might as well have waited in comfy pyjamas – snacks in hand.
The debate over working practices is still ongoing. The question remains if workers are just as effective in tracksuits as they are in business suits. But, perhaps some of us got too-used to the indulgence. As we face down 2023 and its challenges, maybe it’s time we finally shake off the lockdown years and roll up our (shirt) sleeves. Maybe it’s time to put the goblins behind us.
