News

Market Update 31 August 2016

Nat West announced last week that it is to cut interest rates on CISA below £25,000 to 0.01%. After inflation that capital is losing money, it makes you wonder why people would bother to invest in cash.

The FTSE 100 alternatively is up 9% year to date and UK Manufacturing Goods exports have climbed to a two year high.

Janet Yellen’s opening speech to a Banking audience in Wyoming last week suggested that US interest rates would have to rise in the near future to dampen the US economy. As the World’s largest economy that can only be good news for the rest of us, although there is no likelihood of a rate rise anywhere else in the developed World for years to come.

All good news on the economic front, yet mortgage approvals in July sunk to an 18 month low. They are also down on a year to year basis from July 2015.

Ironic that our economy is growing, the World’s leading economy is growing so fast they are talking about putting the brakes on, yet our property market is slow and people are prepared to sit on cash earning 0.01%! (Effectively making a guaranteed loss!)

The only answer left to us is political uncertainty. Brexit is behind us, we know where we are with that, the only thing left is will Scotland have another referendum. We have had several viewers indicate that they will not make a decision on high end property until they know the outcome if there is to be one.

What a terrible price we are paying just to satisfy political egos.

Bill Reid