Another Year Ends...

by Alexander Beard, on Dec 13, 2012 9:34:41 AM

This is my final blog of the year, and what a year! Where did it go? It is certainly true that the older you get the quicker time seems to pass; this time last year I was preparing to leave to spend Christmas in New Zealand, and as the tied old cliché goes “it only seems like 5 minutes ago”

As you may have read in my last missive, we have spent most of the last three months finalising our preparations for the new world of fees replacing commission on investment business from January 1st so I won’t tread that path again in this blog, merely to say we have had to take some tough decisions but we feel that we are as well prepared as anyone.

The country and the western world in general continues to suffer widespread economic sluggishness; even that normal powerhouse Germany, recently warned of a slowdown and it seems that 2013 will be unlikely to herald any great recovery. However, once the recovery begins I believe that we will see the usual short term surge in stock market values.

The other issue that confronts the UK is inflation. At the moment it appears to running ahead of Bank of England (BoE) targets and in fact some sectors of the population, most notably pensioners are probably suffering higher rates of real inflation due to the areas in which they spend a disproportionate amount of their income, predominantly food and household utilities where prices continue to rise. Of course, the normal way of combatting inflation is a gradual rise if interest rates but at the moment that course of action appears to be out of the question as the BoE continues to support a base rate of 0.5% as their preferred method of economic management; whilst it certainly helps business and mortgage holders to have lower rates, it seems that the mortgage savings are not being spend in the High St., people are opting to reduce their debt level, which is good for the economy in the long term but not helpful to the retail sector right now.

The Chancellor, George Osborne, has had his fair share of ‘stick’ but you cannot deny that he’s a shrewd operator and his appointment of the new BoE Governor, someone from outside the UK was a masterstroke;  he earned great kudos (even a compliment from Ed Balls-words rarely heard) by persuading the Canadian central bank chief, Mark Carney, who was clearly the outstanding candidate, to accept the post. Carney is credited with navigating Canada through the 08/09 Global financial crisis with little or no structural damage to either their economy or their banking system.

The UK retail financial services sector, awaits the emergence of a new regulator early in 2013;  the Financial Conduct Authority (FCA) to replace FSA.  This is our  fourth regulator since 1987. First it was FIMBRA, then PIA, then FSA and now FCA. One day they’ll run out of acronyms!!

So, in closing I wish everyone a happy and peaceful Christmas and a healthy and prosperous 2013.

Best wishes

Topics:Alexander BeardPaul Beard