Investment

Money digest: Bad news for savers, good news for borrowers

Savings accounts are disappearing rapidly as the expected cut to the base rate draws closer, says the Guardian. Moneyfacts, a data provider, found that 13 best buy savings deals were withdrawn in July – and have yet to be replaced. These include a three-year bond from Saga at 1.8 per cent and other deals from Virgin Money. The Post Office, too, has scrapped its top-paying three-year bond. Savers will be badly affected if the Bank of England cuts the base rate to 0.25 per cent as anticipated, the paper warns. On the other hand, borrowers are likely to do well. Moneyfacts found that mortgage rates have dropped to a new low

Business holds the antidote to acts of voter insanity on both sides of the Atlantic

Good news: ‘My sources in the Gulf tell me they’re poised with big cash to buy into sterling, UK equities and property on any weakness,’ says an email from a reader who does business across the Middle East. Will the phenomenon I once called ‘the Curse of Qatar’ be the horse that pulls us out of the post-referendum quagmire and tramples the short-sellers? Might it even be strong enough to save the professional services firm, dependent on inward investors, whose owner told me he expects to make 50 of his 180 staff redundant if the vote goes the wrong way? We have flirted with what the Washington Post called ‘an

Warning: top-performing funds are highly likely to contain tobacco

Axa will no longer invest in the tobacco industry: the French insurance giant will sell €184 million of shares and gradually reduce its €1.6 billion bond holdings in the sector. No surprise, given Axa’s role as a health insurer and the oft-repeated statistic that smoking kills six million people a year; indeed, you might think any health-related investor would have taken the decision years ago. Except that cigarette-makers have been stellar stock market performers since the beginning of the century: British American Tobacco’s shares have multiplied in value a dozen times while paying rich dividends, and Imperial Tobacco (now Imperial Brands) has been almost as good. MSCI’s global index of

Credit where it’s due to Tata, our greatest inward investor

If asked to pick the UK’s inward investor of the century so far I would, without hesitation, name Ratan Tata, the anglophile former patriarch of the eponymous Indian conglomerate that bought Tetley the tea-maker for £271 million in 2000, Corus the Anglo-Dutch steel-maker for £6.2 billion in 2007, and Jaguar Land Rover — from Ford — for £1.3 billion in 2008. We’ve heard a lot lately about Mr Tata’s hubristic folly in buying Corus in the first place; and about his boardroom successors in Mumbai ‘going through the motions’ of finding a buyer for Corus UK —with its Port Talbot blast furnaces symbolising what’s left of our shrunken industrial heritage

Investment: Buy to lose

Take a quick look at the UK buy-to-let market and you might find it tough to understand exactly what it is that makes it so very popular. Dealing with tenants is difficult and boring. House prices have a horrible tendency to go down as well as up (Londoners — ask anyone living in the north of England about this). And rents have long been so low relative to prices that getting a worthwhile net yield is all but impossible after costs. Given this, you might wonder, why on earth would 14.5 per cent of all mortgage lending in the UK in the third quarter of last year have been to

Ross Clark

Investment: This dragon won’t bite

At the risk of sounding like Neville Chamberlain, how bizarre that we should be panic-selling our stock-market investments in reaction to the news of a slight economic slowdown in a faraway country to which we export little and whose direct investments in our own economy created fewer than 5,000 new jobs last year. Throughout the mini-crash of 2016, it has become received wisdom that a Chinese slowdown is threatening the global economy, spreading contagion to every corner of the globe. The fear manifested itself in a 3.5 per cent drop in the FTSE 100 on Wednesday 20 January, a day when a flurry of good-news stories about the British economy, with rising

Mr Bear is back: sit tight because he may be with us for a while

Like Leonardo DiCaprio in The Revenant, we’ve just been savaged by a bear but we’ll probably survive. Leading UK-listed stocks have fallen 20 per cent from last April’s peak after a six-year climb, and the FTSE100 chart has taken on a saw-toothed downward trajectory that suggests, to those who rely on such indicators, that there are further falls to come. The end of quantitative easing and the US Federal Reserve’s first interest-rate rise in almost a decade set the direction of travel. The sinking oil price, combined with worries about a global debt build-up, darkened the mood. Repeated bouts of mayhem on the Shanghai bourse, though little or nothing to

Through the roof

When David Cameron said this week that he is worried his children would not be able to afford to buy their own homes, he struck on one of the greatest economic problems of his premiership. The old British promise is that if you work hard and make the right decisions, you can advance in life and own your own home. This is the ladder that most aspire to climb. But for an entire generation, even the hope of home ownership is slipping out of view. A huge number of young Britons cannot hope to have the kind of life their parents enjoyed. The Prime Minister must know he is on dangerous

Martin Vander Weyer

Another banking review is pointless: just carry on naming, shaming and jailing

Was the Financial Conduct Authority leaned on by the Chancellor to scrap its ‘review of banking culture’? Or did it decide pragmatically that its resources would be better devoted to pursuing individual cases of cheating and criminality? I suspect the answer is a bit of both. Acting FCA chief Tracey McDermott — a no-nonsense northerner and former litigation lawyer — is reputed to be just as tough as her predecessor Martin Wheatley, who was ousted by Osborne last year, apparently for being too much the turbulent priest. Tracey became a regulator because she was interested in seeing ‘if human behaviour could be improved’ — in particular, the behaviour of people

Sorry, but I can’t join in the China panic

 MS Queen Victoria, 38°N 19°E I’ll do my best, but I’ve got to be honest: being surrounded by shining Ionian waters and convivial Spectator cruisers isn’t helping me channel the panic that has gripped global markets. So forgive me if this dispatch doesn’t have the apocalyptic tone you’re expecting. I’m as irritated as anyone that contagion from China’s share-gambling epidemic has knocked my modest interest in FTSE100 stocks back to where it stood in late 2012, but ask yourself: do you know anything about China or the global economy today that you didn’t know a month ago? Markets have overreacted, on relatively thin mid-August trading volumes, to a long-anticipated slowdown

Barometer | 2 July 2015

Bank job Should we buy shares in companies which print banknotes in expectation of one getting to print millions of drachma notes? — In May, according to the ECB, there were a total of 17.6bn euro notes in circulation. Given that Greece accounts for approximately 2.5% of the GDP of the eurozone, 441m of these were Greek, and might need replacing with drachma notes in the event the country leaves the euro. — However, there is already a good business in printing replacement euro notes. In May, 2.76bn notes were taken out of circulation and 2.88bn new ones were put into circulation. — Therefore, if Greece were to leave the

Contagion of a different kind as Greece wriggles off the hook

The clear winner in the Greek crisis is the author of The Little Book of Negotiating Clichés, whose royalties must have been pouring in as the clock ticked towards midnight while European leaders took positive steps back from the brink and found themselves speaking the same language, perhaps because they were reading from the same page. But assuming this predictable dance results in terms that Prime Minister Tsipras can persuade his comrades to accept before the IMF’s default deadline and the moment when the Greek banking system can no longer seek life-support from the European Central Bank — which is all still quite a big assumption — who will be

The surfer, the sailor and the horseman: prosperity is all about personal stories

The tectonic plates of economic life rumble and shift. As ever, market watchers are obsessed by big themes — and the demand for predictions about them even though so many past predictions have turned out wrong. Right now, we’re gripped by the endgame for Greece, the timing of the first US rate rise, the future of energy prices given Opec’s decision to maintain output above demand, the slowing of Chinese industrial growth, and the unresolved destiny of the global debt bubble. Yet we also know that wealth creation is fundamentally a matter of individual risk and endeavour, often pursued in defiance of the adverse alignment of market forces. On that basis,

The SNP land grab

Just under 100 years ago the headline in the Oban Times read ‘American family buy lodge and estate on the Isle of Jura’. They were my grandparents, who, although by then British, had both been born in America. They bought our lodge from the Campbells of Jura, who had had the misfortune to lose their heirs one terrible morning in the trenches of the first world war. My grandparents were initially regarded with suspicion by the locals. Yet after investing in the estate, improving the crofters’ cottages, reroofing them from turf to slate, they became well liked within the community. They spent summers on Jura, and occasionally visited in winter.

Bet on a swift Grexit

‘Will Greece exit the eurozone in 2015?’ Paddy Power was pricing ‘yes’ at 3-to-1 on Tuesday, with 5-to-2 on another Greek general election within the year and 6-to-4 on the more cautious ‘Greece to adopt an official currency other than the euro by the end of 2017.’ I’m no betting man — as I reminded myself after backing a parade of point-to-point losers on Sunday — and I defer to our in-house speculator Freddy Gray, who will offer a wider guide to political bets worth having in the forthcoming Spectator Money (7 March). But on the Greek card I’m tempted by the longer odds on the shorter timeframe, because this

Worry about the eurozone crisis if you like. But profit, too

If you want something to worry about, you need only cast your eye across the channel to find yourself spoilt for choice. There is the background noise of massive unrepayable sovereign debt levels. There’s huge youth unemployment. There are angry minority political parties — note the rise of Spain’s anti-austerity party Podemos. There is the battle between those who think the eurozone can survive as just a monetary union and those who know that it will only survive if it gives into political union. There is the threat of deflation (nice when you aren’t in debt, crippling when you are). There is the new phenomenon of negative yields, whereby desperate

Ross Clark

As oil prices plunge, I want to profit from the next spike. Here’s how

Buy jerry cans and fill them while you can. You won’t want to be caught out by the great oil shortage of 2016. Maybe that is exaggerating a little, but when you start hearing people talking about the world being ‘awash’ with oil, and read of oil companies slashing exploration and towing rigs to be laid up in the Moray Firth, you have to wonder if an oil crunch can be far behind. Someone is going to make a fortune when the balance between supply and demand flips and prices rocket again. It is easy to fancy that it could be you. But being a contrarian doesn’t always work out.

Five questions to help you take control of your pension

If you want something done properly, it often pays to do it yourself. So it must be good news that as of 6 April, when George Osborne’s pension reforms take effect, it will be easier than ever to run your own pension fund, because you won’t be forced to retire as an investor when you cease to work for a living. Instead, everyone — not just the rich — will be allowed to retain ownership of their life savings and try to live off them by means of what is known in the jargon as ‘income drawdown’. But is a DIY pension right for you? Institutional funds are buying government

What British start-ups are still missing

This issue includes the new Spectator Money supplement, in which I hope you’ll find a bouquet of stimulating ideas. The cover piece by the enterprise campaigner Michael Hayman waxes lyrical on the important theme of investing in high-tech start-ups: important because it’s an exciting thing to do with the slice of savings on which you’re happy to take higher risks, but also because bold new businesses hold the key to future growth. At a dinner hosted by Hayman last week, I met a selection of business founders and early-stage investors. The mood was one of optimism in what’s seen as an increasingly benign UK arena for start-ups, buzzing with world-class

Storm warning: the world economy’s October troubles aren’t over yet

October is always a turbulent month, and I’m feeling uneasy about this one. The FTSE100 index, which looked set to break through 7,000 in September, has lost more than 500 points since then — and would have lost more but for manoeuvres in the mining sector. Pessimism stalks the bond markets, and even a falling oil price is read more as a harbinger of faltering growth than a stimulus for further recovery. Ebola is the new volcanic ash cloud, and attention is focused on the apparently incorrigible weakness of the eurozone — where the biggest problem is what was long seen as the most potent solution, namely the German economy.