‘Surcharge’…now that’s a word from the early 1970s economy!
15 April 2026There is much to consider economically at the moment following the continuing turmoil in the middle east. This applies to UK households and businesses alike.
Many elements of our day to day lives will be affected by increasing costs over the balance of 2026 and possibly beyond. The International Monetary Fund (IMF) confirmed in mid-April 2026 that, whilst there are some ‘green shoots’ of recovery in the future, the UK is likely to see growth fall in the short term, with the effects of the Iran war hitting the UK’s economy the hardest of the world’s advanced economies. More on this can be found here: https://www.bbc.co.uk/news/articles/c3v670qwz97o .
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I have made a few observations below, and as one small example, I received the night before writing this blog a text from a home services supplier detailing the ‘surcharge’ they are now applying to their services until the economy settles down, and I am sure we will see more of these over the coming weeks and months. ‘Surcharge’…now that’s a word from the early 1970s economy!
The oil price is key for all. Prices at the pumps, food retailers, manufacturing, home energy and the like are likely to rise firmly over the coming months, and the overall cost of living will therefore rise. Being ready and prepared financially is likely to be important over the next period, perhaps to the end of 2026.
The current Bank of England base rate, the Bank’s favoured tool to control inflation, currently at 3.75%, is likely to rise, and predictions range from two to four times this year to keep a lid on inflation. Good news for savings rates perhaps, although not such good news for borrowing costs, and perhaps for the residential property market. We have seen deposit savings rates staying firm at the time of writing.
We have seen volatility (and a fair amount of it) in investment markets, particularly equity-focused funds. However, so far (and in no way a guarantee of future performance), many markets have held up against the backdrop of the continued conflicts. The table below illustrates this further: 
Past performance is not a guarantee of future performance and fund values can fall as well as rise and are not guaranteed.
Other markets / indexes have also seen growth, and pension annuity rates have largely increased over the recent period.
This is only a snapshot of our view of the current economic position. These notes and observations are not guaranteed.
It’s going to be an ‘interesting’ few months ahead and as noted, budgeting ahead and checking your current position, making some financial preparations for higher costs and being ready should be well worthwhile. The team at Chapters Financial in Guildford is ready to help its clients and enquirers when needed.
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
Director
CFP Chartered FCSI
Chartered Financial Planner
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