Your Argyle Financial Bulletin for October 2016
Dear Client,
US Election
As difficult as it may seem to believe, as the days pass it becomes increasingly inevitable that the single most powerful nation in the world will soon have at its head a President who is one of two people who once appeared to be somewhat unlikely... and arguably unsuitable. Hopefully, the structure of the Senate and the House of Representatives will nullify whoever succeeds, in much the way that President Obama's attempts to reform and govern have been frustrated. The falling pound and BrexitIn the UK and Europe events are still continuing to unfold, post Brexit, although we feel there continues to be a variety of reasons for remaining optimistic. Sadly, there is a huge amount of 'vested interest' at work as evidenced in the recent spat between Tesco and Unilever over the proposed increase in the price of Marmite and other Unilever products, caused (it was claimed) by "the falling pound" and Brexit. It was interesting to learn that in fact, Marmite is wholly manufactured in Derbyshire from by-products from the brewing industry and as such, owes nothing to either the value of Sterling or Brexit. Indeed it should actually be cheaper to buy on holiday... if you are so inclined of course! InflationAcross the globe, many countries have been engaged in printing vast sums of money (Quantitive Easing) in an attempt to stimulate growth and create inflation without much obvious success. Yet, in the UK one consequence of the fall in the value of the pound is likely to be some much sought-after inflation. The pound has been over-valued since the crisis of 2008 and although it may now be slightly under-valued, this is a small improvement for us all. The fact is, we want interest rates to rise to help our pension funds grow, for house prices to fall and for our country to become more 'economically balanced' across the regions. The falling value of Sterling will help bring some of these things to fruition and another welcome effect is strong Stock Market performance. At Argyle we are working hard to rebuild our data base after the recent hacking episode and in all practical terms we are now running normally again. Jean is also making a speedy recovery from her surgery and is now 'in harness' once again, for at least part of each day. We thank you for all of your good wishes. As we frequently reiterate in our bulletins, please get in touch if you would like to discuss any issue, be it financial or otherwise.
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