Welcome to your DFP Spring newsletter.
Given the number of factors affecting personal and global finances recently, we felt it best to cover it all in this larger newsletter.
We’ve been watching the effects of the Spring Statement and Trump’s tariffs unfold, and we’ll be giving our views on these and more in this newsletter.
So, without further ado, lets dive into the headlines.
In the News
Firstly, let’s look back to March 20th, when the Bank of England’s Monetary Policy Committee announced that the base rate would be maintained. This means that the rate of 4.5%, previously set in February, stayed the same until the next review on May 8th.
On May 8th, the rate was cut to 4.25% as The Bank wrangles with the global financial fiasco arising from President Donald Trump’s tariff announcements. UK industry experts predicted this cut, although this isn’t because inflationary pressures have eased – inflation rates remain 0.6% above the 2% target. Instead, a base rate cut may have been made to resuscitate an economy that has slowed dramatically in the wake of trade-war uncertainty.
A poll conducted by Ipsos MORI between April 2nd and 8th shows the magnitude of the challenge faced by BoE, with the Economic Optimism Index falling to the lowest level ever recorded since 1978. This is due to three quarters of those surveyed expecting the economy to get worse over the next 12 months. However, it should be noted that some of this pessimism was pre-existing, with the tariff announcements only serving to compound it.
Still, a silver lining to this cloud is that crude oil prices have plummeted, as suppliers prepare for a potential drop in demand. While this could be indicative of an impending economic decline, it is at least a temporary boon for motorists, who should see reduced prices at the pumps. It’s also anticipated that the Ofgem price cap will drop, which should mean lower energy costs for those on variable or tracker policies.
Furthermore, in news which may benefit homebuyers and variable/tracker mortgage holders, we’re starting to see cuts made by mortgage lenders, with some rates dropping below 4%. Therefore, it could be a good time to review your current mortgage deal, particularly now that rates have dropped further. Book a Call with Danbro Financial Planning Today.
Your home may be repossessed if you do not keep up repayment on your mortgage or other debt secured on it.
Understandably, this situation is a lot to take in. So, here’s some thoughts from Liam Winstanley FPFS, our Director of Financial Planning.
Trumps Tariffs & Market Tantrums
At the time of writing, it is around 3 months since President Trump announced his “America First” Trade Policy to the rest of the world, seemingly aimed at getting the US a better deal in the international trade arena. Global stock and bond markets have not, it is fair to say, seen this as a positive thing but rather as the US launching a trade war on the rest of the world.
Since then, we have seen a series of escalations, row backs and pauses from the US and her trading partners, notably China and the EU. It seems like hardly a day goes by without more of these “about turns” and this is creating additional uncertainty amongst investors. The one thing markets do not like is uncertainty and so we are seeing increased volatility across assets classes, with sharp declines in shares, bonds and now extending into property markets.
It can seem like a scary time to be an investor when the values of our portfolios go down, and there are sensationalist headlines in the news about “Trillions being wiped off markets”, “Trade Wars” and “Recessions”.
Human nature is to react and want to do something to try and calm our nerves. We might think about moving our money into “safer” assets like cash to try and protect ourselves against further falls, or delay making investment decisions to “wait for a better time”. We might be constantly checking our valuations online. It is normal to feel that way, we are human after all!
What all available evidence tells us is that it is very difficult (if not impossible) and sometime costly to try and “time” our way in and out of markets or to tactically pick the best performing investment ahead of it actually performing well. We also know that historically, markets do recover as they have done after the 2008 Financial Crisis, The Eurozone Debt Crisis, Brexit, Covid 19 and the Russian Invasion of Ukraine. All these events produced sharp market declines followed by strong rallies in the years that followed.
Indeed, even if we add some current perspective, in the 12 months to 30th April (after the recent sharp declines), global shares (FTSE World Index) are up 4.8%, Global Bonds (IA Global Government Bond sector) are up 2.5%, and a typical balanced portfolio (IA Mixed Investment 20-60% shares sector) is up c. 4%.
So, if you have a financial plan in place that allows for volatility in markets, a well-diversified portfolio, a suitable cash reserve and you don’t need to access all of your funds in the short term, often the best policy for most people is to do nothing and trust the plan that you have if your long term objectives remain the same. If you don’t have a financial plan or financial adviser that takes account of times like this, it might be time to get one!
- Liam Winstanley FPFS
Director & Chartered Financial Planner
Investments Carry Risk. The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.
Featured Article
On the 26th March, Chancellor Rachel Reeves announced her hotly anticipated Spring Statement. For this month’s featured article, we’ve providi a round-up of all you need to know about the Spring Statement 2025, and what it could mean for you and your financial products.
On a Lighter Note…
Wealth and Investment firm Aberdeen have added the vowels back into their name.
In case you were unaware, Standard Life Aberdeen rebranded as ‘Abrdn’, (pronounced ‘Aberdeen’) back in 2021, in a move drew widespread mockery over the name’s missing vowels. Now however, they have renamed again, this time spelling the name fully.
As ever, if you have questions about any of your assets or investments, get in touch with Danbro Financial Planning.
Charlie Sturgess
Charlie is a Designer in Danbro's Marketing team. He is responsible for producing creative assets and content for use across the group's various channels.
His background is varied, having studied Design and English, and worked in the financial services as an administrator.
Outside of Danbro, Charlie can be found up a climbing wall, or watching the F1.
Liam Winstanley
Liam Winstanley is a Chartered Financial Planner and Independent Financial Advisor. He has worked in financial services for well over two decades, specialising in wealth management and financial planning including things like pensions, investments, retirement planning, financial protection and estate plans.
Liam is the Director of Danbro Financial Planning and is passionate about delivering the very highest standards in service, ethics and professionalism within the financial sector.
Away from Danbro, Liam is an avid long-distance runner and also turns out for his local cricket side, Brinscall CC. He lives in Lancashire with his wife and son.
