Much to consider as we head to the Platinum Jubilee18 May 2022
The year 2022 thus far has been awkward from a markets and personal finance perspective. The reasons are many, started by concerns in one direction (the sad invasion of Ukraine), then in another direction, namely high inflation and then the concerns about a recession.
The key financial word of this current period (and for the rest of this year) is 'inflation'. Forecasts from the Office for Budget Responsibility (OBR) now indicate that the Consumer Prices Index (CPI) may reach 8.7% in the last quarter of 2022, before stabilising.
The OBR then expects the CPI to reduce (but not before rising further in the next few months / more here: https://obr.uk/forecasts-in-depth/the-economy-forecast/inflation/#CPI ), although we do not foresee a return to the very low inflationary environment, we have experienced over recent years. This is not guaranteed, and we may see the Bank of England continue to raise bank base rates to counter the effect of this inflation increase. Indeed, inflation in the US stalled near its peak in May 2022, and some pundits feel that this signals the height of this recent inflationary spike. I am sure that there are many economists around the globe who hope this is the case.
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However, the Office for National Statistics confirmed in mid-May 2022 that CPI hit 9.0% in April 2022 as it continues its anticipated climb and many clients have seen the real effects of the energy price cap uplift from the beginning of April 2022, and of course at the fuel pumps. Don't forget that there is another energy price cap review in October 2022, and this may make even worse reading if energy prices continue to rise.
Despite the pressures on household finances, there are some exciting events to look forward to in 2022, including The Queen's Platinum Jubilee celebrations throughout the year, and the Commonwealth Games in Birmingham, starting at the end of July.In addition, on an individual level, many people have eagerly started planning holidays for this summer, now that travel restrictions have been lessened or removed.
Our latest client newsletter was released in mid-May and if you would like a copy then please let us know.
Talk to us about your personal financial circumstances as we approach the summer, with an eye on making a real difference to your money planning.
However you plan the next few weeks and the forthcoming celebrations, we are here to help as you look forward to the balance of 2022 and beyond.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
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