Supplement 190323 – the gamechanger

Mar 19, 2023

“Words are useless without action. Stop fantasizing and just DO it. Be a “game-changer” or get played like an idiot.” ― Ziad K. Abdelnour, Lebanese-American Investment banker.

Welcome to the supplement – and as often, my best laid plans are somewhat scuppered. I can’t avoid some budget commentary because it will be of interest to many readers, I am sure – although there have not been seismic changes, there are windows of opportunity that are currently open. However, the Silicon Valley Bank and associated contagion has really developed as many suspected, and it has been a very volatile week in the bond markets (again!) which I suspect will have some long term implications, but perhaps not the ones that you think. It’s time to document some of my thoughts here on this subject, because they have definitely changed, or at the very least – developed. These events really are a game-changer in my view.

Budget first – and I’m going to go straight into a line-by-line of the exec summary, and add my comments in BOLD – and will develop some of the meatiest and most relevant parts for the supplement readers. The summary follows:

Executive summary

At Autumn Statement 2022 the government took the difficult decisions needed on tax and spending to restore economic stability, support public services, and lay the foundation for long-term growth. True, although not convinced about the foundation for long term growth. At Spring Budget 2023 the government is building on this foundation, with a plan to deliver on three of the five key priorities set out by the Prime Minister in January: to halve inflation, grow the economy and get debt falling.

Halving inflation – this is fundamentally disingenuous although I’m sure politically expedient. Inflation is falling because of nothing to do with the Government – the transitory element has passed thanks to Covid supply-chain disruptions being solved, the economy is cooling thanks to the rise in interest rates which is not controlled by the Government, and indeed the only thing the Government HAS done is the Energy Price Cap scheme – which – let’s not forget – was implemented by Ms. L. Truss, NOT this current administration. All they did was curtail it!

Putin’s illegal invasion of Ukraine and global supply chain pressures have pushed wholesale energy prices to record highs and saw inflation peak at 11.1% in October 2022, the highest level in 40 years. High inflation erodes the value of wages and hurts economic growth. True although potentially incomplete. I’ll save this one for another day!

The Bank of England has taken steps to control inflation by raising interest rates, and the government’s Energy Price Guarantee (EPG) has reduced energy bills for millions, keeping inflation lower than it otherwise would be. True, and the cost of gas and electricity has largely been outside of our control as we are energy dependent on countries around us, and around the world. The Office for Budget Responsibility (OBR) is now forecasting that Consumer Price Index (CPI) inflation will fall to 2.9% by the end of 2023. I renamed the OBR this week the Office for Beds of Roses based on this forecast. The ONLY way we can get here is through an economic mal-event. IF the current US Banking Crisis is NOT endemic, we should avoid one (or it comes via another black swan). 

To further support households with the cost of living, the government is maintaining the EPG at £2,500 for a further three months from April 2023. The government will also align charges for comparable direct debit and Pre-Payment Meter (PPMs) customers, ensuring that those on PPMs no longer pay a premium for their energy costs. Good news, Martin Lewis’ lobbying worked then it seems. The PPM rules are LONG overdue. The entire system pays for those who can’t or don’t budget – which will seem unfair to some – but there are LOTS in the can’t category who need protecting, so overall – good call. There’s a tax on low IQ that no-one ever talks about and it doesn’t help society – only 50% of people can be above average by mathematical identity!

To increase resilience to future energy price shocks, the government is supporting investment in the energy system by launching Great British Nuclear to support new nuclear builds, making up to £20 billion available for Carbon Capture, Utilisation and Storage (CCUS), and extending the Climate Change Agreement scheme for a further two years to encourage energy efficiency. We’ve screwed up our nuclear strategy a LOT. But not as badly as some other European countries. I’m really pleased to see we are on track to sorting it out. There’s been so so many years wasted here. Will it be any good? Not sure. It takes us about 20 bloody years to build a decent sized plant. It NEEDS to happen for 2050/net-zero and it needs to happen NOW, otherwise all our eggs are in the basket of deep geothermal which is nowhere near where it needs to be, yet.

Households are facing price rises beyond energy costs. The government will spend over £5 billion maintaining fuel duty at current levels for the next 12 months, including keeping the 5p cut in place. The government is also increasing Draught Relief from 1 August to freeze the duty charged on a typical pint of beer in the pub and ensure this will always be lower than in the supermarket. Reforms to childcare will also help families with children with one of the most significant costs they face. I got really hacked off at this sentence. The Government will spend…….NO THEY WON’T! They will take £5bn less than the £27bn or so they will probably take anyway – that’s more accurate. More duty on supermarket alcohol – so clever isn’t it because I don’t really believe they care about supporting pubs, they just see it as a way to levy more tax on where much more alcohol is bought these days – the supermarket. Genius. Childcare – we will come onto. 

Overall, the government is providing a total of £94 billion, equivalent to £3,300 per household on average, across this financial year and next, to support households with higher costs. Which will be around-about the value of the extra tax that this inflationary environment will bring them in. Except that boost will last forever, and these measures are just for this year…….or many are temporary. Again, clever business if you can get it!

Growing the economy

Economic growth increases living standards, supports higher paid jobs, and strengthens the public finances. Spring Budget begins to implement the Chancellor’s strategy to deliver long term sustainable growth, focusing on four key priorities: Employment, Education, Enterprise and Everywhere. The OBR is now forecasting the UK economy will avoid a recession and, supported by action taken at the Spring Budget, GDP is higher in the medium term. Perhaps miraculous, and I am surprised, but it is still early days yet. We could also still have revisions that show we’ve already been through a recession last year. Let’s see. The OBR now look fabulously over optimistic to me. 

Increasing employment raises living standards and helps businesses grow. While unemployment is at a near 50-year low, since the COVID-19 pandemic there has been a significant increase in the number of people neither in nor looking for work, with 6.7 million of the working age population economically inactive, excluding students. Spring Budget announces a comprehensive employment package focused on four groups: the long-term sick and disabled, welfare recipients and the unemployed, older workers, and parents. The OBR expects this package to result in 110,000 more individuals in the labour market by the end of the forecast period. Again I wonder if they are going to claim credit on bringing long-term sick back to work because, regardless of your view or experience of “long covid” – there is a clarity that it is passing and will naturally return some of the long term sick to the workforce, regardless of Government policy. I can’t see 110k people coming back to work from the other groups in here – although the parents incentive, when it kicks in, will make some difference. Remember you are employed if you are working any hours/have a job so it is also far from a perfect metric. 

There are more than 2.5 million people reporting that they are inactive due to long-term sickness. To help remove the barriers to employment this group faces, the government is introducing a Universal Support programme in England and Wales to match people with disabilities and long-term sickness with jobs and provide support and training to help them succeed. Spring Budget also introduces a suite of measures to address the leading causes of ill health related inactivity, including tailored employment support in mental health and musculoskeletal health services, and expanding access to digital resources and health checks. Ambitious. Needs to be done. Tons of learning and iteration will be required here. 

There are currently 5.9 million Universal Credit claimants. Many are out of work or on low earnings and could be contributing more to the economy and earning higher wages. The government is therefore providing additional support to help Universal Credit claimants find employment or increase their hours, by increasing Work Coach support and work search requirements, and strengthening support for claimants that are carers of children. You’d need to see the data on whether this is effective or not to make decisions about value for money. 

Workers aged over 50 left the labour market in the greatest numbers during the COVID-19 pandemic. To encourage this group to extend their working lives, the government is increasing tax relief on pensions. The Lifetime Allowance charge will be removed from April 2023 before the Allowance is abolished entirely from April 2024, and the Annual Allowance will be raised to £60,000. These reforms will help ensure that high skilled individuals such as NHS clinicians are not disincentivised from remaining in the workforce. Huzzah! Progress. Annual allowance raise is good news for those who can contribute above 40k a year, which is obviously not very many people! Labour have already said they will reverse this APART from for NHS workers. The £60k allowance keeps a lid on this until things do reverse if Labour can manage to avoid winning the next election. They’d bring the lifetime allowance back in I’m sure (they’ve already said so) but probably leave the £60k allowance because that’s not a “super-rich” thing, although it does only favour those with at least 20k income they can afford not to take out via PAYE or dividends (or corporation tax!). If it solves this ridiculous problem in the NHS of the brain drain because doctors/consultants have been penalised for staying in work, great. If they think a lot of these will rejoin the workforce – doctors are generally very special people in my experience, but once retired for a while, it is a big ask – particularly as overall conditions in the service have NOT improved in the past few years!

There are around 435,000 people in England with a child under 3 who are inactive due to their caring responsibilities; many of these people report that they would like to work but cannot afford childcare. The government is significantly expanding the support on offer by providing 30 hours a week of free childcare for 38 weeks a year, for eligible working parents of children aged 9 months to 3 years. This will be rolled out in phases from April 2024 and is in addition to the 30 hours a week already provided for eligible working parents of 3 to 4-year-olds. The government will also provide £204 million in 2023-24, increasing to £288 million in 2024-25, to substantially uplift the hourly funding rate paid to providers to deliver the existing free hours offers in England. I do like the data this is based on. This blocker absolutely needs to be removed and it is great news. Why it can’t happen from April 2023 I don’t know but I guess the sector does need to prepare. Let’s see what this “substantial uplift” really is – I hope it IS substantial because it has only been subsistence money for providers up until now. I heard someone say that “most this will help haven’t even been born yet” and that’s not quite true, but will have an element of truth to it of course. 

As a result of these reforms, the government is providing free childcare for eligible working parents of children from 9 months until they start school. This will help with the cost of living, support education for the youngest children, and remove one of the biggest barriers to parents working.

The government is also launching a new wraparound pathfinder scheme to support the expansion of school-based childcare provision either side of the school day. Support for childcare costs in Universal Credit will be made available upfront and the maximum potential benefit for parents will be increased. Badly needs to happen. Too many people get so badly penalised for extra hours or responsibilities, the maths are still ridiculous. Millions are in work and on benefits and when they progress are getting “taxed” at marginal rates like 60%+. It makes the current tax system look generous to the middle class!

The government will ensure that the UK labour market has access to skills and talent from abroad where needed. To help ease immediate labour supply pressures, the government will accept the Migration Advisory Committee’s (MAC) interim recommendations to add five construction occupations to the Shortage Occupation List (SOL) initially, ahead of its wider SOL review concluding in autumn 2023. This is badly needed, although construction is shedding size this year and next until labour rates adjust or the market adjusts to them, and materials are truly competitively priced again. Construction output was down 1.7% in January 2023 (bearing in mind December had more inclement weather than January, it isn’t a great indicator although month to month you do have to consider a whole number of fluctuations and factors – I’m keeping an eye on this number).

Education gives people the knowledge and skills they need to get the jobs they want, helping turn the UK into a high skill, high wage economy. The government has already committed to maths to 18 and is rolling out T Levels, Skills Bootcamps and the Lifelong Loan Entitlement, which will have a transformative impact on post-18 education, giving people the opportunity to study, retrain and upskill throughout their working lives. Spring Budget introduces Returnerships: a new offer targeted at the over-50s, which brings together existing skills programmes, supported by £63 million of additional funding. Returnerships sound like the stuff of Spitting Image to be honest, but let’s hope for more. It improves SO slowly in education it is a constant source of annoyance to many who care, I know.

An enterprise-focused economy is one that attracts and supports the most dynamic and productive companies. The UK has one of the most competitive business tax regimes in the world, with the headline rate of Corporation Tax continuing to be the lowest among G7 economies. Spring Budget goes further by introducing full expensing for 3 years from 1 April 2023. During this period, companies across the UK will be able to write off the full cost of qualifying plant and machinery investment in the year they invest, supporting businesses to invest and grow. The government intends to make this measure permanent when fiscal conditions allow. I was really saddened this week to see the FT sell this as a “£9bn giveaway” for business. We BADLY need business to invest. I am not sure about making this permanent – the limited time horizon makes sense, 3 years gives companies enough time to get themselves into gear for it – let’s see what it DOES incentivize now we are outside of pandemic times (although still dealing with after-effects of course!). Let’s see what qualifies and what doesn’t……solar?

To help encourage innovation in the economy, Spring Budget announces further support for R&D intensive Small and Medium Sized Enterprises (SMEs), via an enhanced rate of tax relief for loss making companies; and for the UK’s world leading creative industries, through increased audio-visual tax reliefs. Interested to see and hear more here (couldn’t resist)

At Autumn Statement 2022 the government asked Sir Patrick Vallance to lead the Pro-innovation Regulation of Technologies Review. The government is taking forward all Sir Patrick’s recommendations on the regulation of emerging digital technologies, published alongside Spring Budget. Based on Sir Patrick’s interim findings on life sciences, the government is providing extra funding for the Medicines and Healthcare products Regulatory Agency (MHRA) to help it maximise use of its Brexit freedoms and accelerate patient access to treatments. The government has now asked Sir Patrick to report on how regulators can better support innovation, and the government’s new Chief Scientific Adviser, Professor Dame Angela McLean, will oversee future reviews into creative industries, advanced manufacturing, and the regulator growth duty. Glad that recommendations are being implemented.

Stability is key to providing an environment for economic growth. As recent events concerning Silicon Valley Bank have demonstrated, clear economic and financial stability frameworks are vital to deal with macroeconomic volatility and potential shocks effectively.

Levelling up means spreading opportunity everywhere. The UK’s spatial disparities in productivity are large compared to other advanced economies, and there is significant untapped growth potential outside of London. Spring Budget introduces a package of measures to spread growth across the UK and give local leadership the tools to deliver for their areas.

Spring Budget launches the refocused Investment Zones programme to catalyse 12 growth clusters across the UK, including four across Scotland, Wales and Northern Ireland. Each cluster will drive growth in key future sectors and bring investment to the local area. Each English Investment Zone will have access to interventions worth £80 million over five years, including tax reliefs and grant funding. Still no timescales on any of this. Scrapped before the next parliament? Which would be a shame.

Spring Budget delivers on the Levelling Up White Paper by providing new and deeper powers to more local leaders. Trailblazer deals have been agreed with the Greater Manchester and West Midlands Combined Authorities which will give them greater control over local transport, skills, employment, housing, innovation and net zero priorities, as well as single funding settlements at the next Spending Review. The government will also negotiate a new wave of devolution deals with areas across England, which will include local investment funding for areas that are committed to electing a mayor or leader. Probably more regional licencing ideas then or something! Given the records of LAs versus Central (and neither are great, but we have at least managed to avoid bankruptcy at Central level) – I have my fears. Under the current administrations this looks doable – is it a good idea? Not sold on it. 

Spring Budget also announces the roll out of new Levelling Up Partnerships, providing over £400 million of investment in 20 areas across England. The government is also providing additional funding for local projects to encourage growth and support communities, including: over £200 million for 16 high quality regeneration projects, £200 million for local authorities to repair potholes and improve roads, over £100 million of support for local charities and community organisations, and over £60 million for public swimming pool providers to help with immediate cost pressures and make facilities more energy efficient. Relatively small fry and will benefit relatively few I’m sure.

Getting debt falling Can’t wait to hear this……..

The government had to increase borrowing in recent years to support households and businesses through the COVID-19 pandemic and energy crisis. Public debt now stands at almost £2.5 trillion, or 98.9% of GDP. While the public finances have proven more resilient than expected in November, higher inflation has increased the cost of servicing debt, with debt interest spending totalling £96 billion between April 2022 and January 2023. Horrific, more than the entire inflation windfall for the Govt! (If you don’t count by how much the debt comes down in real terms, of course). 

Autumn Statement 2022 set out a clear plan to get debt falling as a share of the economy in the medium term. The latest forecast from the OBR confirms the government is on track to achieve this aim, with the debt to GDP fiscal rule met in 2027-28 with headroom of £6.5 billion and borrowing falling in every year of the forecast. 12 years we’ve been “on target” and achieved it in one-off years when there’s been an accounting reason, basically. More of the same here, and tight headroom.

The government is providing additional support for public services, including £5 billion for defence and national security priorities over the next two years, and £2 billion each year for defence for the remainder of the forecast period. As set out in the Integrated Review Refresh, the government’s aspiration over the longer term is to invest 2.5% of GDP in defence, as the fiscal and economic circumstances allow. The government will continue to spend responsibly and identify efficiency savings in day-to-day budgets to help manage pressures from higher inflation and focus spending on key public services and government priorities. “Longer term”. Let’s see!

Through these measures the Spring Budget builds on the action taken at Autumn Statement 2022 to halve inflation, grow the economy and get debt falling; to support businesses and households with the cost of living; and underpin the UK’s long-term prosperity. Overall not a bad one, pensions offer opportunity which I will go into now, and I would support the incentives for businesses to invest more, in the now!

That ends the extract. Today is already very long and very well done if you’ve got this far, but I can’t leave it there without developing a little further based on the changes in the various markets this week following the “bank runs of March 2023” which have been significant.

After last week’s article we had a further failure – another crypto-heavy bank, Signature Bank in New York. Putting the issue into context, there are 4300-odd regional banks in the US – so 3 is less than 0.1% of them. SVB was the 16th largest; tech and crypto are both beleaguered as discussed last week, so don’t read too much into that. There was a giant “flex” of confidence from inside the industry when on Thursday some of the very largest players announced they would deposit $30bn into First Republic Bank, who were another company that had seen serious value wiped off their equities due to their exposure and investment choices.

There’s some really interesting arguments here. The Federal reserve have had fingers pointed – banks have acted as they are incentivized. When the People’s Bank of China said in 2013: “The People’s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings” – this was followed closely by incentives in 2014 to encourage US banks to be big buyers of treasury bills. As a deficit-running state, and not just that but the very largest one in the world, and the owners of the global reserve currency, the US needed buyers for its government debt. In 2019 the rules were changed again to give effectively free leverage to banks who would buy Treasury bills (US Government Bonds). In 2020 the forward guidance from the Fed indicated that rates would not be increased in any hurry whatsoever for many years.

This all served the Government well, but the bankers end up with egg on face when indeed this is NOT what has happened. It IS the most significant financial event in the post-pandemic era so far though, by some way. I discussed the zugzwang last week of taking the next turn, with the Federal Reserve and the Bank of England yet to play the game. The European Central Bank continued as they said they would this week to increase rates by 0.5% – however, they only moved to 3% (although it is easy to argue that 3% in Europe is far more significant than 4% in the UK or 5% in the US) – I strongly suspect both Central Banks will NOT follow suit next week and move the rates at all. A pause is the ONLY sensible move in the game, right now, for obvious reasons.

To cut would be to capitulate – the hiking would be well and truly over. To pause is just that – it keeps the markets guessing and retains the option to continue hiking if in 6 weeks time this banking “crisis” is simply stuff of legends, a little like the Liz Truss bond yield situation from late September/early October 2022. To continue hiking regardless would be a very hawkish signal indeed – and Bailey already laid the groundwork for a pause anyway in early March when he said the following (a great choice of words, especially given I suspect he knew nothing of this forthcoming tsunami of potential and real bank failures); (the emphasis in bold is mine):

“At the Monetary Policy Committee’s February meeting, we made a very deliberate change to the way we described our view of the outlook. We moved away from what had effectively been a presumption at our previous meetings that further increases in Bank Rate would be required. In the Committee’s forecast, headline consumer price inflation was projected to fall sharply over the rest of year, more so in the second half.

We recognised, however, that further tightening would be required if there were to be evidence of more persistent inflationary pressures. In that context, we made clear that we have to keep a very close eye on domestic inflationary pressures reflecting a tight labour market.

My reading of the evidence since our February meeting – the data we have had for economic activity, the labour market, and inflation – is that the economy is evolving much as we expected it to. Inflation has been slightly weaker, and activity and wages slightly stronger, though I would emphasise ‘slightly’ in both cases. A further set of data will be coming in before our next monetary policy decision later this month.

At this stage, I would caution against suggesting either that we are done with increasing Bank Rate, or that we will inevitably need to do more. Some further increase in Bank Rate may turn out to be appropriate, but nothing is decided. The incoming data will add to the overall picture of the economy and the outlook for inflation, and that will inform our policy decisions.”


So, he could easily lead the charge for a pause here. Keen readers of the supplement (and you must be keen to have got this far!) will remember my experience with the Bank last year and the suggestion of the 6% base rate. They were SO sure this could not happen! We have the first case here to NOT put inflation first – bank stability, right now, MUST come before inflation.

In the US, I expect the Fed to pause and the traders who have lived through 10+ years of the “Fed put” to see this as a massively bullish sign for stocks. I’d be cautious to follow them over a cliff – let us see what it does to the FTSE. What’s REALLY going to happen here though?


Here’s my current, updated thoughts, in bullet point format for expeditious purposes:

  • Inflation will be stronger for longer because more rises in base rate look to have systemic risk attached to them in the finance sector
  • The duration of higher rates in the 3%+ base level probability just went up significantly because of all of this – higher rates will be needed for longer to quell this extra inflation
  • The peak just went down, perhaps to 4%, but the length of time went up
  • The probability of cutting rates RIGHT BACK to zero also went up very significantly
  • For rates to hit zero, we need a 2008-style event
  • This whole saga could easily take 18 months or more to start playing out
  • House prices look both much safer (since higher rates will not help as we go above the dangerous 5.5% pay rate) and also much more volatile
  • Bonds could really fall out of favour with institutional investors here
  • Residential property took a massive step towards being much more desirable to pension funds and the likes this week as the last bastion of “boring, dependable and reliable”
  • The chance of more social unrest also went up, because it will be harder to tackle inflation and it will take a back seat for at least a couple of months
  • Much of this may be masked because oil prices and energy prices have been coming down so quickly, they will really send quite a false signal on entrenched inflation – so expect numbers LOWER than were expected in the next few months – this is VERY volatile since Putin still has bullets in the chamber that are non-nuclear, and might give us a real false sense of security over the spring and summer
  • A lack of recession in both the UK and the US will not quell energy demand which is still a problem once China really throw off the Covid shackles
  • Short term might look good, but this is still the time to fix the roof while the sun is shining
  • This (banking crisis) may well not be the last black swan this year!
  • Longer inflation actually benefits property investors IF we are kept under 5%; rents will soar and nominal debt will devalue, and more entrants in the sector with even fewer homes being delivered for rental or sale in the next 2 years will continue to throw petrol on the demand and supply imbalance
  • Wages will still be playing catchup; we are 46-27 (voting intention, YouGov poll 16th March, no time to interpret budget there) Labour-Con, and assuming Labour do get at least a small majority, you’d expect public sector wages to be very high on the agenda – this would be another inflationary event in the pipeline
  • Without a recession of note this inflation will not simply disappear – even losing the energy and commodity components of it, goods will still increase as will services as the cost of labour increases – 10%+ about to kick in for the minimum wage and benefits, and 6.3% tacitly set as the minimum wage increase for April 2024 – this does not sound like disinflationary stuff to me
  • Residential property looks about as attractive, from a relative point of view rather than an absolute one, as it has done for many years, despite higher mortgage rates. The investment world has woken up to the fact that yield is an absolute must, and some will go broke due to lack of cash flow in the coming months and years
  • Employment still remains incredibly high and whilst vacancies are falling we are still well above 1m, which was a number only ever dreamed of before the pandemic
  • What we are seeing here overall is a classic “fat tail” scenario – the downsides are very possible not just 1% likelihood events, but in the absence of a meltdown, returns should continue to be supernormal and certainly above average
  • I am remaining prudent on debt, high gearing and high liquidity, but see no current barriers to expansion
  • Deals are thicker on the ground than they have been for a long time, and there will be a few months while things still sound very glum where hay might be made
  • If there is further contagion of note within the finance sector, all bets are off
  • Remember last year’s liquidity ratio: Now really we only need to consider total debt:total cash, interest coverage ratios (what percentage of your rent roll goes towards servicing debt), cash-flow-to-debt, and similar – floating rates and fixed rates as of today look relatively equivalent, and significant moves to the upside really look quite unlikely. 
  • Inflation therefore if still endemic (which I believe it is) would need to be controlled by tax. In the absence of politics this would make a lot of sense – however the next significant budget is a tax cut of some sorts, the classic old election giveaway – that much is guaranteed
  • Public opinion is starting to form that pay rises similar to the private sector, plus covid-bonuses, are fair for NHS staff – although the unions take major issue with this offer, the shape of it looks like the final deal is likely to look (perhaps with some larger numbers) – but strikes are not going away too quickly
  • We could easily see a lull in inflation and a lot of chickens being counted with a resurgence later in the year/around October time
  • We still remain as an economy very reliant on the weather, particularly the temperature, and the rest of the world to supply our energy with very limited inroads made for many years


Overall, I’d summarise the past 6 months as containing a whole number of events we have got really quite lucky in (which is great – it’s better to be lucky than good, and good we definitely haven’t been) – and there may well be benefits in them. Truss knocked the top off a frothy market, perhaps at a great time that might prevent a bubble. That’s a tick (even if you consider it very glass-half-full). The rate hikes went on until the banks nearly went broke, then it put an end to them. If the general public can survive at 4%, that’s a bonus – as the couple of million fixed rate resi mortgage dropoffs happen this year, then we will see what happens, but I think it is relatively clear that pandemic savings have papered over a lot of these cracks, and wage inflation might just do the rest. 


It is concerning how little has been skill and how much might well be lucky timing, but then again, there is plenty of evidence that the colour of the Government really doesn’t matter as much as a lot of the world think it would do. We had an utter incompetent in charge, yes only for just over a month, but STILL couldn’t break the system even though fewer policies could have been stupider (in the mainstream anyway – extremes on either side could easily be far more stupid). Jeremy Hunt is doing a decent job, even if the OBR are completely out to lunch on their forecasts. What more is there to say (other than thanks for sticking with it!) – you know what – Keep Calm and Carry On!