Jungles, sweets, Jeremy's light show and India

Various glimmers of good news this week amidst the more general grey skies. First, Nigel Farage is potentially going off to a jungle far far away. If Ant ‘n’ Dec could put Suella in his suitcase and then manage to lose the pair of them, I’d have untold respect for the perky pair. Secondly, the UK has managed to dodge a technical recession, reporting a puny yet positive growth of 0.2% for the month of September.

This is like being offered a glass of warm white wine at a school play. In some scenarios you might not be pleased with that glass of wine. But in a drafty school hall with small people torturing violins, you will happily glug it down. This is also true of GDP growth of 0.2% in a month in the current climate. We’ll take it.

Bah (mint) humbug and interest rates

Next week, the latest inflation figures (for the year to October) will be published and the expectation is that these will have fallen to under 5% from 6.7% in September. Key factors are lower fuel prices, the cut in the energy price cap, and lower food prices. Food inflation is back in single digit territory for the first time since July last year.

For those interested (and I always find these things really weird!) the highest food inflation is currently impacting eggs, sweets and frozen potato products. Because I’m a sceptic I wonder if there is a correlation between the seemingly random inflation of sweets and Hallow’een. Bah mint humbug.

Of course falling inflation will make it less likely that interest rates will go up again. But neither does hitting the peak of interest rates mean they will fall at any great speed. With interest rates forecast to stay put, don’t expect much change in any variable mortgage payments. Fixed rates could fall very slightly, but I don’t think we’ll see big moves ‘till people expect a rate cut, which is likely to be months down the track.

On the mortgage question, if you or your kids are saving for that first property, our no-nonsense guide will help focus your efforts and provide impartial answers to your questions.

The Autumn Statement

The week after the inflation numbers, we have the Autumn Statement coming up from Jeremy Hunt. His job is a bit like being told to create the best ever Christmas light show on Oxford Street, with 12 bulbs from B&Q, an out-of-work actor in an elf suit (Boris?) and a few strands of last year’s tinsel.

Speculation is rife and the big ones to watch are inheritance tax, tweaks to stamp duty on property, changes to ISA rules and what he’ll say about next year’s State Pension rise.

Inheritance tax is an interesting one. And arguably the nation’s most hated tax. Most people can currently leave an estate up to the value of £325,000 without it being eligible for Inheritance Tax, which is typically levied at the headline rate of 40%. This tax-free amount has been frozen since April 2009. If it had risen with inflation, it would be about £490,000 today. That’s a really good example of how the seemingly dull and innocuous sounding ‘freezing tax threshold’ can really clobber us all and seriously dent the money in our pockets.

I’ll be reporting back on the changes on 22nd November and doing some stuff with the BBC that day too so look out for yours truly on the tellybob, or our bumper round-up blog that week.

And an Indian summer…

This week we publish our usual monthly round-up of what all other retail investors are buying, looking at the best-selling investment lists for October across major platforms. A new face in the line-up is Jupiter’s India fund. As cracks start to appear in the US, investors are looking for opportunity elsewhere in the world. Up 17% over the last 12 months, you can see why it’s grabbed attention.

Other interesting shifts are the gradual increase in popularity of our uncool FTSE 100 as iShares Core FTSE 100 features in the most popular Exchange Traded Funds. Our feature piece has the full lists and commentary.

I’ll leave you with a final thought. I try to steer clear of the nation’s most contentious issues in this blog, respecting the different views of my readers. But this week I’m going to wade in. I love the John Lewis Christmas ad! It’s pleasingly bonkers and much more fun than the usual dullsville chubby cheeked cherubs in pyjamas. Who wouldn’t like a giant Venus flytrap to spit a present at them!?

Have a great weekend,

Holly

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