Tighten your belts... and pray we don’t get Corbyn!
ALTHOUGH the full ramifications of the hostile political reaction to the Prime Minister’s European Union withdrawal agreement have yet to play out, one thing is for sure. Both the value of the pound and the stock market are going to remain volatile in the weeks ahead.
For consumers (as opposed to politicians soaked in dogma), the consequences of yet more uncertainty will be felt in our pockets.
The value of our Isas and pensions is likely to gyrate from day to day, causing some of us to question whether we should continue investing (for my answer to that, please read the Wealth section which starts on Page 60).
Inflation, currently ticking along at 2.4 per cent, will rise on the back of higher import costs, meaning our money is going to buy us a smaller shopping basket.
As for those thinking of a winter holiday break, they will get fewer euros and dollars for their pounds.
According to currency specialist FairFX, sterling is currently down 13 per cent against the euro compared to the day before the referendum vote took place (June 23, 2016). This means £154 less in euros for every £1,000 exchanged. The destinations where the pound is now buying more currency than 29 months ago include Argentina, Egypt, Iran, Sri Lanka and Turkey. I will leave you to decide whether any of these tickle your fancy for a holiday.
Interest rates may also be notched down a peg or two if the country is gripped by a mix of political and economic paralysis. Bad news for savers, good news for borrowers.
Not cheerful news, I am afraid. Time for battening down the hatches, paying down the mortgage and praying that commissars Corbyn and McDonnell will not get the keys to Numbers 10 and 11 Downing Street.
SOMETIMES, financial organisations mean well but are woefully behind the curve.
None is more snail like than the Banking Standards Board, an organisation set up to promote high standards across building societies and banks. A commendable objective but one it has no hope of achieving.
Its latest thoughts are on the hurt and inconvenience many small businesses are experiencing as a result of rampant bank branch closures. This issue, it says, ‘needs to get higher up everybody’s agenda’ and shared branches should be looked at.
A bit late for all that, I would say. The big banks will be doing no U-turn on branch closures. Apps and the internet are the future as far as they are concerned.
As for shared branches, there is more chance of me walking on the Moon than that idea getting off the ground.
TIMPSON is one of my favourite retailers. Not because it rescues many of my pairs of shoes from the scrapheap, thereby avoiding the expense of new ones.
Or a result of the fact that its staff are quite happy to punch an extra hole or two in my trouser belt for free (as they did last week with a nifty bradawl) provided I put a coin or two in a charity box.
My soft spot for Timpson is more about its refreshing stance towards ex-convicts, giving them a chance to reintegrate back into society by working in its stores.
John Timpson (founder, owner and chairman) and son James (chief executive) deserve much credit for such a pioneering approach. It is also now leading the way in encouraging workers to save for a rainy day by agreeing to act as a guinea pig for an initiative called ‘sidecar savings’. Run in conjunction with the National Employment Savings Trust, the scheme automatically directs a small slice of an employee’s pay into an interest-bearing savings account. This is in addition to the pension contribution the worker makes under the Government’s autoenrolment rules, money topped up by Timpson.
The objectives are to encourage the savings habit and to ensure workers have some money they can readily access if they are faced with a financial emergency – stopping them from turning to high-cost credit.
It is a commendable project which if it works could be rolled out across British industry. I trust it is as successful as Timpson is in getting my shoes to last another year.