Sticky inflation highlights importance of long-term approach

Prime Minister Rishi Sunak came in for a fair bit of criticism at the weekend for telling the British public to “hold our nerve, stick to the plan and we will get through this”.

The PM’s interview with the BBC’s Laura Kuenssberg followed the announcement by the Bank of England that it was raising its base rate from 4.5% to 5%. 

The decision takes the base rate, to which millions of loans are pegged, to its highest since 2008, with inflation stuck at almost 9% and proving harder for the Bank to bring under control towards its 2% target. Rates have been rising in the UK since December 2021.

The PM went on to tell viewers: “I’ve never said that it’s not challenging, I’ve never said that this isn’t going to be a difficult time to get through.”

While inflation is undoubtedly proving stickier than the Government and many commentators anticipated, it will, over time, start to come down.

For now though such a high level of inflation inevitably affects the returns on different types of investments. Stocks and shares don’t like the uncertainty and bonds don’t like rising interest rates.

There are many challenges to being the Government of the day and one of them is the inability to please everyone. 

While previously we have seen a succession of financial support measures for the pandemic, energy crisis and other emergencies, this time round the PM is holding firm in resisting support for people facing the pain of ever rising mortgage payments.

Similarly, the PM continues to resist calls to meet the various pay deals being sought by striking public sector workers.

The Government’s position is that further financial bail-outs and settlements will only stoke the inflation crisis and do nothing to reverse rising interest rates.

All of which continues to highlight the importance of clients taking a long-term, diversified approach to their financial planning, rather than one that is event driven.

We are currently undertaking our standard review of all investments and will be contacting clients over the next few weeks. Portfolios are broadly the same as they were six or 12 months ago.

Client Security

There have been a couple of instances recently in which client emails have been hacked resulting in us receiving messages purporting to come from clients asking us to withdraw funds.

In both cases, thanks to the rigorous approach we take towards client security, we identified that the emails were not legitimate and flagged the issue with our clients.

Instances like the above explain why we encourage clients to use our Personal Finance Portal for security and convenience.

The portal gives clients the means of seeing their complete financial picture in seconds and at a time and place that suits them. It’s also always up to date and easy to use. 

Most important of all, everything is completely encrypted, meaning that you can communicate with us using the built in messaging service safely and securely. 

For those clients who aren’t currently using the portal, we would recommend that you speak to one of our team to find out more. Once you are registered, it really is simple to use and will give you extra peace of mind regarding your financial security.

With cyber-crime an ever-greater problem, there are also a range of other steps we can all consider to protect ourselves whether securing our devices, data or identity.

This article published in PC Mag in April 2023 offers a series of tips that may be of benefit – https://uk.pcmag.com/antivirus/94680/12-simple-things-you-can-do-to-be-more-secure-online

Welcome Tyrone

We are delighted to welcome a new member to the Phillip Bates & Co Financial Services team.

Tyrone Cisarello has joined us as an administrator and is already getting to know clients and contacts in our wider network.

Tyrone lives in Wirral and has worked in the financial services sector for a number of years.