top of page

Finanze® Weekly Roundup - 10/09/2022

Here are this week’s highlights in the UK economy.

PM announces energy cap: Liz Truss is sworn into office while Kwasi Kwarteng was appointed chancellor of the exchequer. During her speech on Thursday, Truss highlighted her plans to freeze energy price hikes to mitigate surging power costs in UK households. Kwarteng, on the other hand, will be meeting regularly with BOE Governor Andrew Bailey to discuss measures to curb surging inflation.

The pound further weakens: The pound plunged to £0.8701 (-0.4%) on Wednesday, its lowest level since 1985. The BOE blames the weak UK economic outlook and stronger US dollar for the weakening sterling.

UK mourns the Queen’s passing: The country enters into 12 days of mourning following the passing of the Queen. Banks, shops and the stock market suspended their operations on the day of her death out of respect. The bank holiday and business shutdown will also be observed during her burial. The parliament will also be cancelled next week but this won’t delay the energy price guarantee support package, which will push through in October.

ECB hikes rate: The European Central Bank (ECB) raised its benchmark interest rate to 0.75%. This follows the July hike from -0.5% to zero, its first raise since 2012. European inflation is currently at 9.1%, which the ECB is trying to tame through its monetary policies.


Finanze® Foresights:

Among the inspirations for repackaging the country into Cool Britannia were the popularity of the creative industries and a promising economy that experienced record growth. Now, more than 30 years since the renewed sensation was proclaimed by the New Labour, everything seems far off from the heyday of the UK economy marked by low inflation, low levels of unemployment and higher productivity before the global financial crisis hit in the 2000s.

Way before Truss took office on Tuesday, she already inherited a recovering economy in the midst of a pandemic marred by escalating energy costs, the Ukraine-Russia war, soaring inflation, and climate change, among others. Her energy freeze package will certainly reduce inflation but by how much and for how long remain in question. More so, a recession is likely on the way as Russia insists on cutting its gas supplies throughout Europe while the cost of living continues to spiral.

Industry analysts forecast that without Truss’ intervention, the energy cap will reach £3,549 by October and will further increase to £5,390 by the start of next year.

While the Treasury believes that the energy bill cap could curb inflation by up to 5 percentage points, this will likely force the BOE to raise interest rates next week, which we expect to be between 50 to 75 basis points.

Further interest rate hikes by Threadneedle Street will eventually slow down the surging growth in housing prices where affordability has worsened during the pandemic. The Office for National Statistics reports that house prices rose 7.8% year over year in June, with an average UK house already costing higher by £20,000.

This means that those who are planning to purchase their homes must swiftly act now in anticipation of higher interest rates in the coming months. In addition, mortgage owners on a variable rate will be hit with the expected interest rate hike, which will add around £395 to their mortgage bills each year.


--- To the fullest extent permitted by law, Finanze Ltd are not responsible for any errors or omissions in any statements, views, opinions, facts, figures, commentary or any other material in the articles contained herein, or for loss arising from its use or performance, or for the results of any actions or lack of action taken on the basis of information provided in articles.

The topics covered in articles are complex and do not substitute the need for financial, legal, accounting, tax and other advice before making any decisions or taking any action based on information in articles.

2 views
Finanze Strategy White_3x.png
  • LinkedIn

Finanze Strategy Ltd is an introducer not a lender.  Our services are strictly for company use only and not available for individuals. The information contained within this website is subject to the UK regulatory regime and is therefore targeted at corporate consumers based in the UK. The FCA does not regulate some forms of Business Buy to Let Mortgages and Commercial Mortgages to Limited Companies.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.  

There will be a fee for loan research and processing, the precise amount will depend upon your circumstances. Your Consultant will confirm the amount before you choose to proceed but we estimate it to be a minimum of 1.5% of the gross loan value for standard transactions and 2% for specialist transactions.

Commission disclosure: We have access to an extensive range of lenders. Once we have assessed your needs, we will introduce a lender(s) that provides suitable products to meet your business circumstances and requirements, though you are not obliged to commit. Whichever lender we introduce to your business, we will typically receive commission from them after completion of the transaction. The amount of commission we receive will normally be a fixed percentage of the amount your company borrows from the lender. Commission paid to us may vary in amount depending on the lender and product. The lenders we work with pay commission at different rates. However, the amount of commission that we receive from a lender does not have an effect on the amount that your company pays to that lender under its facility agreement.

​It is our intention to provide you and your company with a high level of customer service at all times. If there is an occasion when we do not meet these standards and you wish to register a complaint, please write to: Compliance Department, Finanze Strategy Ltd, 124 City Road, London, EC1V 2NX or call: 0208 058 5389.
 

To the fullest extent permitted by law, Finanze Strategy Ltd are not responsible for any errors or omissions in any statements, views, opinions, facts, figures, commentary or any other material found in this website, or for loss arising from its use or performance, or for the results of any actions or lack of action taken on the basis of information provided in this website. The topics covered in the website are complex and do not substitute the need for financial, legal, accounting, tax and other advice before making any decisions or taking any action based on information in this website.

The following Trade Marks of (i) FINANZE IT’S PERSONAL®, (ii) IT’S PERSONAL.® and (iii) FINANZE® belong solely to Finanze Group Ltd. Only Finanze Group Ltd have an exclusive right to use the Trade Marks. Finanze Group Ltd’s Trade Marks on this site represent some of the Trade Marks currently owned or controlled in the UK. Other Trade Marks may also be used Finanze Group Ltd.  The use of Trade Marks from this site are strictly prohibited unless you have prior written permission from Finanze Group Ltd.

© 2023-2024, Finanze Strategy Ltd (trading as Finanze Strategy) is a wholly owned subsidiary of Finanze Group Ltd. 

Company Number: 14729259. D-U-N-S® Number: 230446942.

Registered Address: 124 City Road, London, EC1V 2NX. All Rights Reserved

bottom of page