Article 50 – Confirmed

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Britain Leaves Europe – Summer Camps In The US Apathetic

 

Britain formally discharged the starting gun on Brexit as European Council Head of state Donald Tusk verified he had received official notice of the UK’s objective to leave the European Union.

Tusk received a letter, which invokes Write-up 50 of the Lisbon Treaty, in behalf of UK Prime Minister Theresa Could from Britain’s EU rep Sir Tim Barrow. Both celebrations currently have a mere 2 years to move aside four decades of at times fractious collaboration as well as develop an entirely new social as well as financial relationship.

Walter Synalovski

Courtesy of Wikimedia

” We are sorry that the UK will leave the European Union, however we await the procedure that we currently will certainly have to follow. For the European Union, the first step will now be the fostering of standards for the arrangements by the European Council,” the council claimed in a declaration.

” In these settlements the Union will act as one and also maintain its passions. Our very first concern will be to reduce the unpredictability brought on by the choice of the UK for our residents, organisations and Member States. As a result, we will start by focusing on all key arrangements for an orderly withdrawal.”

In London, Prime Minister Theresa May addressed parliament, telling MPs the start of the process was a “historical minute where there could be no reversing”.

Without any trace of paradox, May said: “Perhaps currently even more than ever the world require the liberal autonomous values of Europe.” She also appeared to advise the EU against playing hardball over talks by matching financial talks with those on safety and security issues.

” Europe’s safety and security is extra breakable today compared to any time given that the end of the Cold Battle. Deteriorating our co-operation for the success and protection of our residents would be a costly mistake,” Could stated in her letter to Tusk.

In Boston, we sought the views of a local business man to get some idea of how the “average Joe” thinks about the Brexit deal.  We hoped to talk to Walter Synalovski of Camp Director of Camp Mah-Kee-Nac, 6 Hawthorne Rd,Lenox, MA 01240.  But we did not even talk to him.

Back in London, May said the government would certainly release a white paper on Thursday detailing strategies to move body of EU regulation, called the acquis, right into UK regulations.

” It is our goal to ensure a smooth as well as orderly Brexit,” she stated, adding that she acknowledged there would certainly be effects of leaving the bloc’s substantial solitary market.

She also placed herself on a collision course with the EU’s chief negotiator Michel Barnier by requiring that Britain’s exit as well as a new profession bargain be finished in parallel within the two year duration.

Barnier has urged that a brand-new contract on profession can just start when Britain is formally out of the union.

May included that legal rights of EU people in Britain, as well as those of Britons in Europe would be a very early concern in any talks.

” When I kick back the negotiating table in the months in advance, I will represent everyone in the entire UK– young as well as old, rich as well as inadequate, city, town, nation as well as all the towns as well as hamlets between,” she said.

” And also yes, those EU nationals that have actually made this nation their house. It is my fierce resolution to obtain the best offer for each bachelor in this country.”

Yet, even prior to the letter was provided a leaked file from the European Parliament revealed Britain would certainly not be offered an open market offer by the EU in the following 2 years, and also a shift arrangement to cushion the UK’s leave after 2019 would only stand for approximately three years.

The record, seen by the Guardian newspaper, said the European court of justice will certainly be responsible for clearing up any lawful challenges during the change duration.

It included that the UK would certainly be able to revoke its notice of article 50 but this have to be “based on problems established by all EU27 so they can not be used as a procedural device or abused in an attempt to improve the real regards to the UK’s membership”.

If Britain attempted to discuss any type of free trade manage various other countries while still an EU member “there will certainly be no future discussion of a deal with the union”, the paper warned.

Crucially it stated that there would be no unique deal for the City of London “providing UK-based endeavors advantageous access to the single market and also, or the customizeds union”.

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Shell profit dips to lowest in more than a decade

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Royal Dutch Covering PLC’s yearly earnings toppled in 2016 to its lowest level in over a years, however the oil titan claimed it had actually transformed an essential edge, reporting a rise in cash money in spite of reduced crude rates.

The British-Dutch company claimed Thursday its earnings for 2016 on present cost-of-supplies basis– a step much like the take-home pay that UNITED STATE oil firms report– was $3.5 billion, below $3.8 billion a year previously. Revenue for the 4th quarter was up to $1 billion from $1.8 billion a year previously.

The results reflected a tough year for the industry during which oil prices sank as low as $27 a barrel and remained mired in the mid-$40s for months. American energy-industry rivals Exxon Mobil Corp. and Chevron Corp. posted disappointing earnings this week and last.

But there were also signs that Shell, the world’s second largest oil company, was starting to find its footing as the benefits from its roughly $50 billion acquisition of BG Group PLC last year kicked into gear.

“We are really making good progress in reshaping Shell to a world class investment case,” CEO Ben van Beurden said in a media briefing. “2016 has been a transition year for us; 2017 will be the year that we follow through on the strategy.”

Cash flow from operations jumped nearly 70% in the fourth quarter compared with a year earlier, rising to $9.2 billion — enough to cover Shell’s cash dividend payments for the period. Its debt levels also came down record amounts earlier in the year, when the company turned to financing to pay for the BG deal and maintain hefty investor payouts.

The company said that bet on BG is already paying off. Oil and gas production rose 28% in the fourth quarter compared with a year earlier, with BG assets adding 824,000 barrels of oil equivalent a day.

By 2018, new projects from BG and Shell’s existing portfolio are expected to add 1 million barrels a day of new production compared with 2014, or $10 billion of cash generation with oil prices at around $60 a barrel, Shell’s Chief Financial Officer Simon Henry said.

Cash-flow generation in the fourth quarter already came in well above analysts expectations, buoying Shell’s share price despite the dismal profit numbers. Shell’s share price went up 1.7% in London trading on Thursday morning.

“We emerged clearly stronger by the end of 2016,” Mr. Henry said, hitting back at critics who early on in the oil price downturn complained that the company wasn’t vocal enough in setting out a strategy.

“The next couple of days will indicate who really got it and who acted most efficiently,” Mr. Henry said. “You should just go compare.”

Shell rival BP PLC is set to report its quarterly and annual financial results on Tuesday.

Like many of its peers, Shell has responded to the challenging operating environment with tough measures, and is continuing to trim costs and spending as it pursues more progress in efforts to rebalance its finances.

It has already laid off thousands of workers, slashed costs and spending, and embarked on a $30 billion divestment plan to pay down debt and enable it to finance its spending and dividend payments from free cash flow.

Last month, it announced asset sales in the North Sea, Thailand and Saudi Arabia amounting to close to $6 billion. Mr. van Beurden said in Shell’s results announcement that the company had completed, announced or was progressing divestments worth $15 billion.

Shell said it is planning its business around oil prices at $50 a barrel this year and expects capital spending to $25 billion or lower, at the bottom range of its guidance for spending of $25-$30 billion a year out to 2020.

The company’s net debt fell to $73 billion at the end of the fourth quarter, down from $78 billion in September, and operating costs declined $10 billion from Shell and BG’s combined level two years ago.

source: marketwatch.com 

 

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Bank of England hikes UK economic growth forecast from 1.4% to 2.0% as Brexit blues fail to materialise

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The Bank has actually likewise enhanced its projections for 2018 and also 2019, with financial development anticipated ahead in at 1.6 percent as well as 1.7 percent specifically.

The UK economy will certainly expand considerably faster compared to devalued projections following last June’s EU vote, the Bank of England confessed today.

As it held rates of interest at 0.25 percent, the Bank increased its development projection for 2017 to 2 percent – well up from November’s price quote of 1.4 percent.

The upgrades will certainly humiliate the bank as they reveal as unneeded its alarming cautions of serious financial damages from the Brexit ballot.

Bank of England

In August, the Bank cut interest rates for the first time since 2009, when they were reduced to 0.5 per cent in the heat of the financial crisis.

The Bank said a more gradual slowdown in consumer spending, measures announced by the Chancellor in the Autumn Statement, and stronger outlook for the global economy would all support UK output over the next few years.

On what’s been dubbed ‘Super Thursday’, the Bank of England also said its inflation forecast remains broadly unchanged for this year, at around 2.7 per cent.

The Bank said the weaker pound would lead inflation to rise to 2.8 per cent in the first half of 2018 and fall back ‘gradually’ to 2.4 per cent in three years time.

It added: ‘The value of sterling remains 18% below its peak in November 2015, reflecting investors’ perceptions that a lower real exchange rate will be required following the UK’s withdrawal from the EU.

‘Over the next few years, a consequence of weaker sterling is that the higher imported costs resulting from it will boost consumer prices and cause inflation to overshoot the 2% target.’

Consumer price inflation rose to a two-year-high of 1.6 per cent in December, primarily because of a slump in value of the pound, which has lost over 14 per cent of its value since June’s referendum.

On the back of the Bank’s report, sterling is down 0.36 per cent to $1.2610, after reaching a seven-week high against the dollar this morning.

Against the euro, sterling is down 0.80 per cent to €1.1664.

Neil Wilson, a senior market analyst at ETX Capital, said: ‘Despite the upgrade to growth, the market sees this as a bit doveish as inflation is not expected to run away as much as thought and we are seeing sterling hand back earlier gains.’

He added that the upgrade was ‘a touch of humble pie for the Bank, as it’s been made abundantly clear that the economic Armageddon it expected in the event of Brexit has just not materialised.

The upgrade is a “touch of humble pie” for the Bank

‘The UK remains the fastest growing G7 economy – not bad for a nation that some think has committed an act of self-mutilation in choosing to leave the EU.’

The FTSE 100 is up 0.33 per cent or 23.68 points to 7,131.33.

Minutes of the Bank’s Monetary Policy Committee showed some policymakers believe it is becoming harder to justify keeping rates at record lows, with growth showing surprising resilience and inflation rising.

The Bank said: ‘The more time that passed without a noticeable reduction in economic growth, the more difficult it would become to tolerate the extent of the inflation overshoot.’

Financial markets are factoring in a rate rise in 2018 and for borrowing costs to be hiked twice over the next three years, although economists are not expecting an increase until 2019.

The Bank said it would continue to balance the trade-off between higher inflation and growth in ‘such exceptional circumstances’ and cautioned that the consumer spending spree boosting the economy is set to come to an end, which would weigh on growth.

It said a consumer spending slowdown is ‘highly likely given the scale of the depreciation of sterling and the consequent effect that higher import prices would have on real income growth.’

Tom Stevenson, investment director for personal investing at Fidelity International, said: ‘With the Old Lady of Threadneedle Street prepared to keep sitting on its hands when it comes to raising rates and with inflation expected to breach the central bank’s 2% target this year, anyone with savings still sitting in cash will struggle to generate real returns.

‘One alternative is to look to the stock market. History shows there has been a sweet spot in the inflation range that suits equities well – normally at around 2% to 2.5%.

‘Shares tend to perform particularly well if the rise in inflation reflects higher growth expectations rather than a wage spiral. This is the Goldilocks scenario for equities and it may well apply for much of this year and next.’

Suren Thiru, Head of Economics at the British Chambers of Commerce, said: ‘The Bank of England’s latest forecasts paint a much more optimistic picture of the UK’s growth prospects compared to their previous post-EU referendum predictions.

‘Although the central bank is slightly less concerned over price growth, inflation is still expected to breach the 2% target for a prolonged period. This means that MPC’s attempts to combat rising inflation and support growth is likely to remain a challenging balancing act through the forecast period.’

Meanwhile, Yael Selfin, KPMG Chief Economist said: ‘Less pressure on the pound, as the focus of markets’ attention turns elsewhere, is providing a backstop for any further deterioration in the inflation outlook.

‘Given the volatility expected in the first half of 2019, as the UK exits the EU, we could see rates beginning to rise later than markets are currently indicating.

‘The MPC may decide to start its tightening cycle only after the UK is safely out of the EU, despite a short to medium term peak in inflation above the MPC target of 2%.’

The latest forecasts come after the Bank’s chief economist Andy Haldane admitted last month the Bank had suffered a ‘Michael Fish moment’ in making overly gloomy predictions last year over the impact of a Brexit vote.

The Bank’s Canadian Governor Mark Carney controversially warned that a Brexit vote could trigger a UK recession ahead of last June’s referendum.

In August, less than two months after the EU referendum, the Bank downgraded its UK annual growth forecasts for 2017 from 2.3 per cent to just 0.8 per cent.

But, in November, the Bank raised its forecast to 1.4 per cent after data showed the economy hadn’t weakened as it feared.

The UK’s economy grew by 2 per cent last year, with growth of 0.6 per cent in each of the last three quarters.

Today, the construction purchasing managers’ index hit a five-month low of 52.2 in January after December’s nine-month high of 54.2, a steeper decline than forecast in a Reuters poll, though still indicating modest growth.

The latest PMI reading for the key services sector, which accounts for almost 80 per cent of the UK economy, has shown five consecutive months of growth, and unemployment also has remained at an 11-year low.

On Wednesday, figures from Markit revealed the UK manufacturing sector showed signs of a ‘strong start’ last month, but remains under pressures as the cost of imports rise.

source here: thisismoney.co.uk 

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Tax returns could soon be a thing of the past as HMRC reveals plans to overhaul nightmare system

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HMRC has actually exposed strategies to modernise its difficult tax returns system by changing it with a “electronic paper” that taxpayers could upgrade on a quarterly basis.

The overhaul, which will certainly work in 2020, will certainly permit employees to send their numbers online throughout the year, in a proposal to ditch the extensive paper variation.

The body says the move will help crack down on late penalty fees, and minuscule errors costing employees as much as £8 billion a year.

In a statement, the government’s tax arm acknowledged that at present, too many people “find the system hard” and vowed to make life simpler for Britain’s workers.

The current paper document is to be replaced with a digital version that can be updated quarterly, instead of annually.

This means that most businesses, landlords and the self-employed will record and pay all their taxes online.

Under the government’s proposals, the Making Tax Digital project will save the taxman £8 billion a year, it said, because taxpayers will be getting their tax bills right first time.

At present, those who file late or make errors on their submission are typically subject to a fine, which starts at £100.

In line with the new system, charities will no longer have to submit their returns, HMRC said.

When will the changes take effect?

HMRC is aiming to have the new scheme in place by 2020.

It will pilot digital systems with hundreds of thousands of businesses before rolling them out across the board, to ensure the software is user friendly, and to give businesses and landlords time to prepare and adapt.

It added that taxpayers would have 12-months to get used to the new system before any late submission fines would be applied.

Jim Harra of HMRC said: “We know that the majority of businesses want to get their tax right first time, but the latest tax gap figures show that too many find this hard, with more than £8 billion a year lost in tax as a result of avoidable taxpayer error by small businesses.

“Making Tax Digital will help businesses to get their tax right first time; it will help reduce the likelihood of errors, lower the chance of unwelcome compliance checks and give them greater certainty that they are getting things right.

“The appetite for digital services is growing and traditional paper-based processes make no sense in the 21st century where the vast majority use digital services.”

The current system

More than 10 million tax returns are submitted to HM Revenue and Customs (HMRC) each year, but 19% of those who have filled a self-assessment in the past two years think they may have lost out financially because they had made an error or not understood the document.

Making a mistake on your tax return could end up costing money; whether it’s an additional tax bill or a penalty for a miscalculation, HMRC’s system of penalties could be as much as 70% of the tax owed.

The deadline for sending 2015-16 self-assessment tax returns online to HM Revenue and Customs (HMRC) has now passed. The final date was 11:59pm January 31.

Those who miss the deadline could be subject to a minimum £100 fine, even if there is no tax to pay. This can rise to as much as £1,600 if there are further delays.

If you’ve made a mistake, the best thing to do is to get in touch with HMRC and explain you’ve made a genuine error.

It says it will treat those with genuine excuses for late returns leniently and focus its penalties on those who persistently fail to complete their tax returns and deliberate tax-evaders. These are the numbers to call if you’ve made a mistake .

An HMRC spokesman said: “Taxpayers can amend their returns within 12 months of the original deadline. There is lots of help available online. Anyone who needs help should get in touch with us.”

If you believe you may have made a mistake on your tax return, you can follow these steps to correct your submission and avoid a penalty fine .

Do I need to submit a tax return?

If you meet any of the following criteria, you are advised to get in touch with HMRC to submit your form.

  • You’re an employee or pensioner with an annual income of £100,000 or more.
  • You have a pre-tax investment income of £10,000 or more.
  • You are self-employed, a business partner, or director of a limited company.
  • You’re a trustee or representative of someone who has died.

    – source: mirror.co.uk

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TalkTalk founder Dunstone takes reins from Harding

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After 7 years as chief executive, Dido Harding steps down makes Charles Dunstone TalkTalk founder and chairman take over the post.

With Harding’s departure, TalkTalk reported a 5 percent drop in earnings and said it had lost approximately 42, 500 broadband subscribers in the third quarter, but stored its full-year earnings estimate unchanged.

LONDON (Reuters) – TalkTalk founder and chairman Charles Dunstone will take over the running of the British telecoms operator when chief executive Dido Harding steps down in May after seven years in charge, the company said on Wednesday.

Harding’s departure came as TalkTalk reported a 5 percent drop in revenue and said it had lost a net 42,000 broadband subscribers in its third quarter, but kept its full-year earnings forecast unchanged.

Shares in TalkTalk, which competes with Sky, Virgin Media and industry leader BT, were trading up 8.5 percent at 170 pence at 1231 GMT.

Dogged for years by a reputation for poor customer service, largely as a result of merging several companies, TalkTalk’s shares had fallen 23 percent in the last 12 months after a high-profile cyber attack in October 2015.

“I’ve always been a firm believer that CEOs should not overstay their welcome,” Harding, who will be replaced by company insider Tristia Harrison, said.

Dunstone, who created TalkTalk in 2003 as an offshoot of his Carphone Warehouse group, will take on executive duties following the exit of Harding, who he appointed when he separately listed the telecoms firm in 2010.

Analysts at Jefferies said Dunstone’s move raised hopes TalkTalk would focus on regaining its “value” credentials.

Dunstone, a 52-year-old sailing enthusiast who owns a 31 percent stake in TalkTalk worth about 500 million pounds, said he would support the new management team by taking an executive role as well as chairing the board.

Doing both jobs is not considered corporate best practice.

“There are very, very strong successors within the business, but they don’t have the experience of running a public company and the investors relations and all that kind of stuff, so I said I’ll become executive chairman and support them in that role,” Dunstone said in an interview.

He will step down as chairman of Dixons Carphone and be replaced by former BT chief executive Ian Livingston.

CYBER ATTACK

Harding, who has been a consistent thorn in the side of BT, said she would focus on public service, including her role in the upper house of the British parliament.

The 49-year-old, a member of the Jockey Club whose horse Cool Dawn won the Cheltenham Gold Cup in 1998, was a contemporary of former prime minister David Cameron at Oxford University, and sits on the Conservative benches in the Lords.

She was “incredibly proud” of improvements delivered to TalkTalk’s clients, although there was “still work to do”.

A low point was the cyber attack, which put the data of 157,000 customers at risk and cost around 60 million pounds, including a 400,000 pound fine for security failings.

Harding went on television to warn 4 million customers about the breach, a strategy she said had improved trust in the brand.

TalkTalk relaunched its packages last year, aiming to offer simpler deals and re-establish a reputation for value.

The number of customers leaving had risen as a result of TalkTalk’s new tariffs, while revenue was hit by re-pricing.

But net additions would return to growth in the fourth quarter and churn would come down markedly, Harding said.

Moving to fixed price plans had been vindicated by price hikes by BT and Sky, Dunstone said.

“We zig when the market zags. We just need to be true to our challenger values.”

TalkTalk’s group revenue fell 5 percent to 459 million pounds ($577 million) in the quarter, with revenue on its own network down 5.4 percent to 332 million pounds.

Earnings for the year are forecast to be towards the bottom of a 320 million to 360 million pound range.

($1 = 0.7955 pounds)

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UK manufacturing’s strong January is dented by spike in import costs

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Despite record rise in costs, sector posts 6th month of expanding output which are anticipated to increase further over this year 2017.

A record rise in the cost of imports in January has taken the shine off a strong performance by the manufacturing sector, which has rebounded since the Brexitvote to record its sixth consecutive months of expanding output.

Manufacturers were forced to hike the cost of their goods by one of the widest margins in one month after the slump in the pound triggered a record rise in the cost of imports, according to the Markit/Cips purchasing managers survey.

The rising cost of imports is expected to push up the price of UK-made goods over the coming year and send inflation from 1.6% to nearer 4%.

Bank of England policymakers are expected to highlight in their quarterly inflation report on Thursday that price pressures in the economy are growing, especially in the manufacturing industry because the sector relies heavily on raw materials and components brought in from overseas.

Car firms have warned the government that the fall in sterling against the dollar and the euro might not be enough to persuade them to continue investing in the UK if they face tariffs and higher regulatory costs on imports and exports to the European Union. Other industries with overseas suppliers are also known to be lobbying to stay inside the single market and maintain access to EU markets tariff free.

Nevertheless, UK manufacturing enjoyed an increase in new orders and the fastest rise in activity since May 2014.

The purchasing managers’ index (PMI) slipped below December’s two-and-a-half-year high of 56.1, but the small dip still left overall figure, at 55.9. A reading above 50 indicates expansion.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said it was worrying that manufacturers were increasingly reliant on domestic demand, which could fade away once price rises feed into the supply chain.

“The recovery in the manufacturing sector lost a little pace and narrowed to become almost exclusively dependent on domestic demand in January,” he said.

“The new export orders balance collapsed to 50.9 in January – its lowest level since May – from 58.5 in December. This emphatically shows that the benefits to manufacturers from sterling’s depreciation remain far too modest to outweigh the costs for the rest of the economy in terms of high inflation.”

Tombs warned that the recent strong figures could prove to be a high watermark. “Domestic demand faltered the last time producers increased prices this quickly in 2011, and we doubt that this time will be different,” he said.

Lee Hopley, chief economist at EEF, the manufacturers’ organisation, said the survey told “a positive story about the sector”, with the all the important output and orders components remaining firmly in positive territory.

She said inflationary pressures represented a cloud on the horizon and “presented some risks to the resilience of the UK market later this year”.

But Hopley was more upbeat about the industry’s immediate prospects. “Rather than this being a case of the PMI defying gravity, the expansion in activity is being driven by more upbeat conditions at home and [by] demand in global markets [being] on a more stable footing than businesses have seen for some time. Additionally, there’s some extra help fromsterling’s depreciation,” she said.

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AS CASH ISAS LEAVE SAVERS DESPAIRING, IT COULD BE WORTH TAKING A CHANCE

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The past few years have been a grim time for savers. After the Bank of England cut its base rate last month to a record low, anyone hoping to earn from their funds will be forgiven for uttering a sigh of desperation.

Among the most notable casualties have been cash Isas, with the average rate paid standing at just 0.99%, and potentially more gloomy news ahead. “Savers should brace themselves for more cuts to come,” says Rachel Springall, finance expert at Moneyfacts. Last week, NatWest became the latest bank to slash rates: its cash Isa now pays just 0.01%. But amid the gloom some solace for savers can be found at Principality Building Society, which pays online savers 1.1% on £1 and above.

However, for those who want to try and make their savings work harder there are alternatives – but with greater returns comes greater risk.

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Premium bonds

Around 23 million Britons hold almost £50bn in Premium bonds, lured by the prospect of winning between £25 and £1m in the monthly prize draw. Each bond costs £1, with a minimum investment of £100 and maximum of £50,000. Your money is 100% secure and all prizes are free of tax.

Justin Modray at Candid Financial Advice says this is a safe way of having a flutter, and today’s average prize rate of 1.25% looks reasonable. But he adds: “Don’t put too much faith in striking it rich. If you do win a prize, 93 times out of 100 it will be just £25.”

Risk rating: 2/10 Bonds pay no interest and you may never win anything.

High-interest current accounts

In a strange twist, many current accounts now pay up to 5%, far higher than cash Isas and savings accounts. Santander 123 pays 3% on balances between £3,000 and £20,000, but this will fall to 1.5% on 1 November.

“It still offers cashback on your everyday spending, but you can get better interest rates elsewhere,” says Anna Bowes at rate tracking serviceSavingsChampion.co.uk.

Nationwide FlexDirect pays 5% for 12 months on the first £2,500, but you must pay in at least £1,000 each month. TSB Classic Plus also pays 5% on up to £2,000 if you pay in £500 each month.

Risk rating: 1/10 Your cash is safe, but only a small amount attracts interest.

Peer-to-peer

Science writer Hazel Muir, 49, has invested in cash Isas since their launch but now gets more than double the return by lending money through peer-to-peer (P2P) platforms.

Muir, who lives in Tunbridge Wells, gets up to 4.8% from P2P ratesetter.co.uk.“P2P rates have also fallen, until recently you could get 6%,” she says.

Online-only P2P platforms work by taking money from savers and lending it to vetted borrowers. Zopa pays between 3.5% and 6.7%, depending on risk, while Ratesetter pays an average 5.3% over five years.

“Your money is not covered by the Financial Services Compensation Scheme (FSCS), but I think that is a risk worth taking,” she says.

Risk rating: 5/10 Borrowers could default with no FSCS protection, though some platforms run contingency schemes to cover losses.

Bonds

Corporate bonds issued by companies can help you beat dismal cash returns.Damien Fahy, founder of moneytothemasses.com, says you can spread your risk by investing in a fund of bonds using your tax-free Isa allowance.

The Kames Investment Grade Bond currently yields 3.15% and has returned 52% over five years, according to trustnet.com, while the Artemis Strategic Bond yields 4.1% and has grown 42%.

Another option is a retail bond. The York Green Wind one-year bond pays a fixed 5.5% if you lend to a firm that runs a portfolio of four wind turbines.

Risk rating: 4/10 Some say bonds are over-priced and defaults are always a danger.

 

 

Stocks and shares Isa

You can invest up to £15,240 in a stocks and shares Isa this tax year, with all returns free of income tax and capital gains tax.

The FTSE 100 is up 30% over the past five years, but many fund managers have done far better, with MFM Slater Growth returning 93%, and Fundsmith Equity growing 174% – although past performance is no guarantee of future success.

“Stock markets are volatile, but in the longer run should beat most alternatives,” says Patrick Connolly at Chase de Vere. He tips Rathbone Income, Artemis Global Income, Threadneedle Global Equity Income, and M&G Property Portfolio.

Risk rating: 7/10 Shares are always risky, so spread your risk and hold on for the long-term.

Buy-to- let

Setting yourself up as a buy-to-let landlord has been one of the most rewarding investments of the past 20 years. However, former chancellor George Osborne made life harder by slapping a 3% surcharge on second home purchases, reducing wear and tear allowances and phasing out higher rate tax relief from next April. Investors also need to find a deposit, and pay for stamp duty, mortgage arrangement fees and doing up the property.

Jonathan Daines, chief executive of lettingaproperty.com, says rental demand should stay strong as people struggle to get on the property ladder: “Bricks and mortar are still an attractive investment opportunity due to low returns elsewhere.”

Risk rating: 7/10 You can’t dissolve it if you need your money immediately.

Gold

Adrian Ash, head of research at gold broker BullionVault.com, says the metal has thrashed all rivals since the start of the millennium: “It is up 465% in that time, against a 164% rise in house prices, 96% total return from the FTSE, and 55% on cash. It has also performed over the past 12 months, rising 45% against just 0.4% on cash.”

However, this supposed safe haven can be volatile; its price dropped 25% in 2013. It also pays no income, you incur trading costs and it has to be stored securely.

Risk rating: 7/10 Gold has dazzled but could be vulnerable at current high prices.

Fine wine

Fine wines are one investment you can drink to. Industry index the Liv-ex Fine Wine 100 is up 10.7% over the past year, though it trades 22% lower than five years ago.

Simon Staples, sales director, fine wine, at merchants Berry Bros & Rudd, says around £10,000 is needed to start. He recommends sticking to Old World wines, typically Bordeaux, Burgundy and champagne, but says they must be stored carefully, ideally in a humidity- and temperature-controlled warehouse. If it does not perform financially at least you can drink your losses.

Risk rating: 8/10 Beginners really have to know what they are buying.

Venture capital trusts

High-risk venture capital trusts offer tax breaks to incentivise people to invest in smaller, growing companies. Laith Khalaf, senior analyst at Hargreaves Lansdown, says you get 30% income tax relief for subscribing to new fund raisings. You can invest up to £200,000 each tax year, though you cannot save more income tax than you actually pay. Most returns are paid as tax-free dividends during the life of the VCT, Khalaf says. You can start with as little as £3,000 and should hold it for at least 10 years. “If you sell in the first five years you must repay any tax relief,” Khalaf says.

Risk rating: 9/10 High risk but the tax breaks make it worthwhile for some.

Spread betting

Instead of 1%-2% a year from cash, you could earn 5%-10% in a day from spread betting – or lose the lot. Josh Mahoney, market analyst at IG, says spread betting involves speculating on the price movement of a stock, index, commodity or currency without buying the asset itself. This allows you to speculate on the outcome of a major political event – such as the impact of Brexit on sterling or the oil price during an Opec meeting. Such betting is classified as gambling so there’s no stamp duty or capital gains tax on winnings. But, as with all gambling, the losers vastly outnumber the winners.

Risk rating: 10/10 In a few minutes you can lose more than your original deposit.

On the road that can lead to more than 12%

Amy Jackson hopes life in a VW Camper van means she will be to pay off her fixed-rate mortgage in three years. Photograph: Stephen Shepherd for the Observer

Faced with earning a meagre 0.25% from an instant access cash Isa, Amy Jackson decided to hit the road. Instead of paying £13,200 into the tax-free wrapper in March she invested in a VW Camper T5, buying the 10-year-old converted van for £11,500 and spending £1,700 on new upholstery, service, tax and insurance.

Amy, 47, an agricultural consultant, plans to keep the van for three years. “Then I’ll use the proceeds, along with my other savings, to pay off my fixed-rate mortgage.” She expects to sell the vehicle for around £11,000, but should still come out ahead on her investment.

She and partner Greg McGlothlen calculate it will save them a small fortune on holiday costs and weekends away: “We plan to explore the UK and it should save us a net £2,000 a year in flights, hotels and meals out.”

That would add up to savings of around £6,000 over three years. After deducting an estimated £700 a year for servicing, tax and insurance, this would leave her with a £1,700 “return” on a £13,200 investment, a total of 12.88%.

The return could be even greater as they also save on £35 a day boarding fees for their two dogs Sally and Seth, who holiday with them in the vanAmy has named her van “Isa” – but it is set to give her a far better run for her money than 0.25%.

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London’s million-pound homes hit hardest by Brexit

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Top-end houses in London are having a hard time to offer in the wake of the Brexit referendum, hitting prices and contributing to evidence that the capital’s home market might have peaked in the meantime.

The market for the most pricey homes was currently slowing prior to the June 23 vote and experts at UBS believe the referendum dented confidence better.

Listings

The number of houses under offer has dipped considering that the vote CREDIT: UBS
As an outcome the variety of properties under offer has fallen considering that the start of July, while the number on the marketplace without such purchaser interest has begun to climb up, and reversing sharp falls seen previously in the year.

UBS looked at the ratio of properties contained on the marketplace compared to the number that are offered based on contracts being exchanged, as an indicator of the number of buyers compared with sellers, and the quantity of time a property should invest in the marketplace prior to being offered.

The situation is most plain for homes costing more than ₤ 1.5 m, a market that is mainly London-based.

A year ago there were roughly four-and-a-half times as numerous such homes on the market as there were houses sold based on contract. That climbed up in the early months of this year and got again after the Brexit vote, with the ratio now at a brand-new high of more than 7.5 times.

By contrast, the more affordable end of the market– mainly outside London– has hardly altered, indicating buyer interest has actually not been reduced by the referendum.

The ratio for homes costing below ₤ 150,000 has remained just below one-times because February, and although the ratio for those costing between ₤ 150,000 and ₤ 250,000 has actually approached, it too remains listed below the one-times level.

UBS thinks this suggests the London housing market has been most impacted by the Brexit vote.

Its experts expect the number of deals in the capital to fall by 6pc in 2016 and 10pc in 2017, causing house prices in London to fall by 10pc by the end of 2017, before the market resumes its upward trajectory.

Home sales
The most pricey homes are hardest to offer, while cheaper homes, often outside London, are still popular CREDIT: UBS
The prediction comes as building and construction company Berkeley Group cautioned that the government’s real estate policies are harming London’s market, with increased deal expenses such as a stamp duty hike for landlords striking sales.

Restraints on building and construction are also destructive, the business said, pointing the finger at the Community Facilities Levy charged by regional councils on freshly constructed houses.

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Greece faces standoff over bailout funds after Athens fails to impose reforms

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Eurozone preachers could choose not to launch additional funds as just 2 from 15 modifications that were problem of rescue plan have actually been carried out

Klaus Regling, head of the European Stability Mechanism, claimed Greece ought to have the ability to protect temporary financial debt alleviation actions ‘soon’.

klaus-regling

Greece is encountering one more bailout standoff with its lenders amidst records that eurozone nations will certainly choose not to launch added funds to it this month.

Athens has actually annoyed its peers in the solitary money by applying just 2 of the 15 reforms that were a problem of in 2015’s rescue bundle. EU authorities informed German everyday Handelsblatt that Greece has actually postponed privatising state properties, including in the disappointments of eurozone financing priests that will certainly go over progression on Friday.

Additional funds result from be paid out under the European Stability Mechanism (ESM), which will certainly offer Greece approximately EUR86bn (₤ 72bn) of economic aid by 2018 in return for reforms.

After accepting a very first tranche of EUR10.3 bn this springtime, which EUR7.5 bn has actually thus far been launched, the 19 financing preachers result from pay out the remainder this month however may hold back repayment for the remainder of the year. An additional financing preachers’ conference is prepared for 21 September.

A year after the situation was proclaimed over, Greece is still spiralling down.
Find out more.
The gridlock record followed the head of the ESM stated at the weekend break that Greece ought to have the ability to protect a minimum of temporary financial debt alleviation procedures however just if it started applying the staying reforms.

” We have actually been dealing with these procedures and also they might be applied soon,” Klaus Regling informed Greek paper Ta Nea.

” We really hope the federal government carries out continuing to be prior activities soon,” he included. EU authorities are requiring that Athens advances with strategies to establish a brand-new privatisation fund, offer certain state possessions, as well as change its public service.

8 years right into the nation’s monetary situation, life has actually ended up being harder for many Greeks. Joblessness is the greatest in Europe and also one study in June discovered that severe hardship had actually climbed from 2.2% of the populace in 2009 to 15%– an overall of 1.6 million individuals– in 2015.

Longer-term alleviation to assist the nation lower its debilitating financial debt of 176% of GDP will certainly not adhere to up until after completion of the bailout, Regling stated. Nevertheless, the International Monetary Fund– which is not joining Greece’s 3rd rescue program– has actually urged that long-lasting alleviation consisting of financial debt mercy should take place earlier.

The Greek financing priest, Euclid Tsakalotos, cautioned recently that the nation’s following help payment might be postponed due to the fact that the federal government had actually cannot get approved for it, although he urged any kind of hold-up would certainly last “for days, not weeks”.

Greek media stated Athens dealt with a significant job to press with the very undesirable reforms as well as protect the last “frantically required” EUR2.8 bn of financing, adhered to by the begin of long-promised financial obligation restructuring talks by the end of the year.

The federal government is depending on the talks as an alleviation reward to counter a widely undesirable austerity plan consisting of costs cuts, tax obligation walks as well as pension plan decreases needed by the bailout, the paper Kathimerini claimed.

It included that the sounds originating from Brussels “talk quantities regarding eurozone nations’ self-confidence degrees” in the Greek federal government, while hindering the capacity of the head of state, Alexis Tsipras, to introduce also moderate actions in order to help individuals worst impacted by Greece’s extended recession.

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FTSE climbs on UK construction news and ahead of US jobs, but BT drops

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Telecommunications team struck by downgrade on competitors and also law problems
BT shares down in climbing market

Leading shares are relocating greater at the end of the reduced trading week, complying with much better compared to anticipated UK building numbers and also in advance of the United States work numbers later on.

British Telecom offices in Fuencarral-El Pardo district in Madrid (Spain).

British Telecom offices in Fuencarral-El Pardo district in Madrid (Spain).

Yet BT is throwing the favorable fad, down 5.45 p at 381.15 p as JP Morgan reduces its rate target from 490p to 440p and also its referral from obese to neutral. The broker, claimed BT encountered a variety of headwinds suching as enhanced competitors, merging and also law.

However experts at Exane BNP Paribas have counter disagreements, as well as continue to be purchasers:

We recognize that of BT’s brokers reduced the stock last evening pointing out countless headwinds for its share rate in the following couple of years. We differ with the large bulk of the bear disagreements advanced by this broker. BT stays our leading choice.

[On competitors] we highly question Sky strategy to buy structure Britain much more fibre framework.

We assume TalkTalk is eager to maintain paying large returns and also the firm’s annual report is currently totally tailored … We are warns regarding the influence on BT of Virgin Media’s continuous initiatives to increase its network impact. Nevertheless, we are urged by the reality that in the 18 months throughout of June 2016 (i.e. given that Virgin Media began increasing its network), Openreach lines in solution raised by around 51,000 despite the fact that Virgina’s network impact broadened by 428,000.

[On merging] we believe Openreach will certainly not be divided from BT primarily since: (i) Ofcom watches out for a split creating BT’s Pension Trustee to require considerable added top-up repayments; (ii) a split will seriously postpone structure Britain far better repaired broadband facilities.

Independently, hurt by all the phone calls for far better broadband connection, Ofcom states it wants to a person besides BT as well as Virgin Media to construct fiber to a big percentage of Britain in the following couple of years (the regulatory authority believes 40% of the UK is a great target). Ofcom has actually continuously claimed this is as vital as changing Openreach. The ‘carrot’ for prospective capitalists is much easier accessibility to BT’s air ducts and also posts. Yet likewise the ‘stick’, we assume, will certainly be permitting BT to bill even more for wholesaling accessibility to Openreach. We will certainly understand if our sight is right later on this year (Ofcom appointment paper) since the regulatory authority’s brand-new prices regimen need to remain in area by April 2017.

Somewhere else Carnival has actually gone down 124p to ₤ 35.42 after Morgan Stanley relocated from equivalent weight to undernourished, while housebuilders have actually come under stress as the current solid UK financial information indicate feasible price surges as opposed to cuts. Persimmon is down 34p at ₤ 18.36 as well as Taylor Wimpey has actually dropped 3p to 162.6 p.

The industry has actually likewise been daunted by remarks from retirement community professional McCarthy & Stone, which stated it had actually seen raised terminations complying with the Brexit ballot. Its shares have actually shed 11% to 185.7 p.

Overall however, the FTSE 100 has actually included 34.45 indicate 6781.42, with protective stocks such as drugs and also power firms sought after. Hikma is 57p greater at ₤ 21.35 as well as National Grid is 20p much better at 1060.5 p.

Lower down the marketplace safe and secure repayments team Eckoh has actually plunged 27% to 35.75 p after a revenue caution, partially because of set you back over-runs in its United States purchase as well as a modification in its prices version. Residence broker N +1 Singer claimed:

The team’s chances have actually not decreased (sales pipe stays significant) and also our company believe the medium-term development expectation continues to be extremely healthy and balanced … However, we identify that today’s information is frustrating which actions will certainly need to be required to reconstruct financier self-confidence.

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Eurozone consumer spending slows but exports rise

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Weak point in residential costs most likely to trigger more activity from the European Central Bank
Steel mill in Meitingen, Germany

steel-export-image

German and also French federal governments are not anticipated to enhance investing in advance of basic political elections following year.

Solid export sales conserved the eurozone from torpidity in the 2nd quarter of the year as financial investment slowed down and also residential customers kept back on investing.

Numbers revealed exports from the 19-member money bloc enhanced 1.1%, after going stale in the initial quarter.

However this rise in sales abroad was countered by level financial investment, lowered accumulations of items, stalled federal government costs as well as just partially greater customer investing that limited the total development price to 0.3%.

Economic experts stated the absence of a solid inspiration from residential investing would likely to tax European Central Bank principal Mario Draghi to increase his assistance for the eurozone economic situation when he holds an interview on Thursday.

Karen Ward, primary European financial expert at HSBC, claimed the a lot more thorough failure of GDP development in the most recent numbers revealed that customer costs, the essential motorist of development for much of the last eighteen months, reduced as the increase from ow oil rates discolored.

” Investment is most likely to continue to be lacklustre because of weak worldwide profession and also political unpredictability suching as Brexit. So the 2nd fifty percent of the year is most likely to be slow,” she stated.

The UK’s mandate ballot, a collection of terrorist cases as well as the recurring evacuee dilemma have actually made customers in the eurozone careful of making big acquisitions as well as a wide downturn in international profession is most likely to damage exports.

However the German and also French federal governments are not anticipated to improve costs in advance of basic political elections following year, leaving customers as well as export sectors to create development.

Germany, which has actually reported a document profession excess for the in 2014, has actually currently intended a well balanced allocate 2017 that will certainly do little to increase much-needed public framework financial investment.

France, which has actually restricted extent to increase costs without more breaching EU spending plan regulations, has actually tried to raise work as well as GDP development with a collection of liberalising reforms.

Bert Colijn, elderly eurozone economic expert at ING Financial Markets, stated with exports to crucial trading companions like the UK under stress, the eurozone had “little left in the storage tank to improve development in the last months of the year”.

He claimed: “Consumption can recoup rather, however no wonders could be anticipated with deteriorating work development. It for that reason promises that development will certainly reduce rather even more in the months in advance.”.

Generally, the eurozone economic situation expanded by 0.3% in the 3 months throughout of June, in accordance with initial price quotes as well as by 1.6% over the previous year. Development in the initial quarter was modified down a touch to 0.5% from 0.6% and also economic experts anticipated that the remainder of the year would certainly show hard going with companies and also home investing.

Howard Archer, primary European financial expert at IHS Global Insight, stated the 1.5% development he has actually booked for this year would certainly not be duplicated in 2017, when development was anticipated to go down to 1.2%.

Draghi will certainly offer his judgment on the most up to date eurozone numbers on Thursday at the ECB’s normal interview in Frankfurt.

Ewen Cameron Watt, elderly supervisor at BlackRock Investment Institute, claimed Draghi ought to pump a lot more funds right into the eurozone economic climate as well as expand the variety of devices made use of by the ECB to respond to a stagnation over the following year.

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