The Economy

Recent poor bond market performance has caught many by surprise; not least because bond-based investments are expected to have low long-term volatility. Here we explain how the events of 2022 came to be and lay out a framework for suggesting where government bond yields are likely to settle.  

A significant market response to Chancellor Kwasi Kwarteng’s mini-budget on 23rd September has been felt by investors across the UK, with Nutmeg’s clients not immune to market falls especially in low- to medium-risk portfolios. Here we put your questions to our investment team, which we hope will put some context to the volatility we are seeing.  

It’s fair to say that chancellor Kwasi Kwarteng’s mini-budget on 23rd September, with its tax-cutting and pro-growth agenda, has not been wholly welcomed by markets. The pound hit an all-time low against the dollar (at $1.03 on Monday 26th, its lowest since Britain went decimal in 1971), while bond markets have also slumped. So, what’s caused this angst, and how does this impact our investment strategy? 

Chancellor Kwasi Kwarteng has announced a series of updates to public finances that the government hopes will boost UK growth, including changes to income tax rates, stamp duty, and National Insurance. Here’s our brief on the main talking points, and how the changes may impact you.

In this month’s investor update, Nutmeg product marketing manager, Molly Beake, speaks with our director of investment strategy, Brad Holland, about market movements and their drivers in August. They discuss how rising inflation and recession concerns have persisted during the month and explore indicators which may signal optimism for the future of the global economy.

We all know the importance of pension provision, but could seeking financial advice give you an advantage when investing for your retirement?

August is often perceived to be a quieter time of the year for investors, but this month we’ve already seen plenty of new data on the health of the UK economy. This included a fresh policy update from the Bank of England, the latest economic growth figures, a further rise in inflation, and a rise in the energy price cap. So, what does this mean for investors?  

Rising inflation and warnings of recession in the UK have understandably dominated the news agenda in recent weeks. Here, we put all this into perspective with what we’re calling the ‘4 Cs’: Communication, Context, Constraints, and finally our Call on how we are managing portfolios.  

We are a nation of homeowners – at least notionally we are. While the UK has traditionally had a love affair with property and home ownership – fostered by successive government initiatives from right to buy to help to buy – the reality is that for many getting a foot on the property ladder has never felt harder. 

In this month’s investor update, Nutmeg personal finance specialist, Annabelle Williams, speaks with our chief investment officer, James McManus, about changes to the portfolios in July. They discuss why markets rallied during the month, despite raised fears of recession, and the latest in central banks’ stance against rising inflation.

UK inflation has hit a fresh 40-year high, with the Consumer Price Index (CPI) reaching 9.4% in the 12 months to June. It’s time to remind ourselves of what’s causing these price rises and what could happen next.  

The events of the past few days that have led to the resignation of Prime Minister Boris Johnson underline the truism that a week is indeed a long time in politics. Investors’ eyes now turn to the fate of markets and the pound, but what can we learn from past departures from No. 10?