News

Budget predictions: top tips

Changes in the taxation of Principal Private Residences and a potential merger of National Insurance with PAYE could be mooted in the upcoming March Budget.

Beware Greeks (or the US Fed) bearing gifts

In an unprecedented gesture of goodwill (an early Christmas present perhaps?) the global economy has received a huge gift in the form of the US Federal Reserve’s announcement of a fresh round of Quantitative Easing (QE). This has been perhaps the biggest story to emanate from the US in several months (the Republican Party’s trouncing of the Democrats in the US mid-term elections hardly gets a look-in). The Federal Reserve announced that it intends to buy $600 billion worth of Treasury securities by the middle of next year.

Contagion?

There has been one story dominating all financial headlines for the past week or so: the situation in the south of Ireland. After much speculation the European Central Bank and the International Monetary Fund flew to Dublin for discussions which culminated in agreement for a rescue package. The numbers involved are huge: over €80 billion to help resolve Ireland’s debt problems. The Irish government has unveiled an austerity package of tax rises and spending cuts with the aim of reducing the deficit to 3% of gross domestic product by 2014. Built in to this is the assumption that real GDP (economic growth) will see an increase of 2.75% per annum between 2011 and 2014. This is, needless to say, a demanding target.

Autumn Thoughts

Last week both the UK stock market and the US reached their highest level since the end of April. The charts for the year resemble a rollercoaster ride, however, with steep falls and sharp rises and at present the charts appear to suggest it is poised to turn down again. However, markets are nothing if not unpredictable and it would be unwise to assume it will swoop down again.

Oil Revisited

Once again we have seen the oil price moving upwards: it has recently broken out of its narrow range of $70 to $80 a barrel and touched $85. Once again we face the prospect of rising petrol and heating costs. There has been a great deal of speculation that there may be further rises in the pipeline, particularly after the Saudi oil minister hinted that they would do nothing to intervene this side of the $90 level. There have also been comments from Iran (the second largest OPEC producer) that the world economy is in a position to absorb an oil price of $100 a barrel. All this comes after OPEC’s upward revision of world oil demand estimates for both 2010 and 2011; another hint that the oil price is set to rise.

Interesting times

This article previously appeared in the Irish News.

For the last eighteen months we have lived with the extremely low level of interest rates of 0.5%; not since the Bank of England was established in 1694 has borrowing been so cheap – or lending so profitless.  The long term “normal” range of interest rates has been 2 to 6%, although clearly there have been lengthy periods when it has been outside these parameters. 

Summer Blues

This article recently appeared in the Irish News

We are all aware of the old adage that begins “sell in May and go away…” which is a reflection of the summer doldrums in the market.  It is, without doubt, one of the most difficult times for trading in the market: with holidays being taken and low trading volumes generally, there can be some disproportionate movements and markets sometimes seem to make less sense. 

Surviving a shaky recovery

This article recently appeared in the Belfast Telegraph

The last few months have been traumatic for the stock market.  Here investors have had to contend with the General Election and the reality of a hung parliament resulting in a coalition government, which, although part of everyday life for many European countries, is a distant memory for the UK.

Taking Stock

This article recently appeared in the Irish News

Away from the furore of BP and the on-going vilification of Tony Hayward, there is plenty of news in the investment world.  It can hardly have escaped anyone’s notice that the “emergency” budget is out this week and equally it will come as little surprise that it is likely to unveil tough measures, with phrases such as “the age of austerity” being bandied about.

The Emergency Budget 2010 comment: A macro perspective – tough medicine

“The imperative for the budget was to convince both the credit ratings agencies and the bond market that this is a credible fiscal deficit reduction programme that stands up to global comparison. It has fulfilled this requirement."