{"id":16463,"date":"2023-12-21T08:05:30","date_gmt":"2023-12-21T02:35:30","guid":{"rendered":"https:\/\/farratanews.online\/my-forecast-for-next-years-financial-winners-and-losers-personal-finance-finance\/"},"modified":"2023-12-21T08:05:30","modified_gmt":"2023-12-21T02:35:30","slug":"my-forecast-for-next-years-financial-winners-and-losers-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/farratanews.online\/my-forecast-for-next-years-financial-winners-and-losers-personal-finance-finance\/","title":{"rendered":"My forecast for next year’s financial winners and losers | Personal Finance | Finance"},"content":{"rendered":"

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\"Pound<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/p>\n

Annualised consumer price inflation of 3.9 per cent in November is the lowest since September 2021 (Image: Getty)<\/span><\/span><\/div>\n

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The inflationary surge of the last two years has cast a huge shadow over everybody and everything. Combined with the energy shock, it\u2019s triggered a desperate cost-of-living crisis, that\u2019s left millions facing a desperate choice between heating their homes and eating.<\/p>\n

The government has been forced to issue a stream of cost-of-living payments, just to stop people from freezing or starving, putting more pressure on the Exchequer. Taxes have climbed to pay for it.<\/p>\n

Mortgage payments rocketed, with homeowners paying up to \u00a3500 a month more the moment their low-cost fixed rates came to an end.<\/p>\n

Consumer price inflation proved horribly sticky. In October 2022, CPI peaked at 11.1%. As recently as May, it stood at 8.7%.<\/p>\n<\/div>\n

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Don’t miss… <\/strong> Savers urged ‘now is the time to act’ for real returns on cash over 5% <\/strong><\/p>\n<\/div>\n

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October was the game changer, with inflation crashing to 4.6 percent but today is an unexpected bonus.<\/p>\n

Annualised consumer price inflation of 3.9% in November is the lowest since September 2021, more than two years ago.<\/p>\n

At that point, the Bank of England was holding base rates at 0.1%. Today, they stand at 5.25%.<\/p>\n

Better still, core inflation \u2013 which excludes volatile figures such as housing costs \u2013 also fell strongly, from 5.7% in October to 5.1%.<\/p>\n

Core inflation is closely watched by the BoE, so it\u2019s good to see that it\u2019s heading in the right direction, too.<\/p>\n

Yesterday\u2019s dramatic and unexpected drop kills the myth that the UK is an \u201coutlier\u201d, destined to suffer higher inflation than the US and Europe.<\/p>\n<\/div>\n

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\"Top<\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/source><\/picture><\/p>\n

Millions face a desperate choice between heating their homes and eating. (Image: Getty)<\/span><\/span><\/div>\n

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US inflation was lower than ours at 3.1% in November, but the difference is rapidly narrowing. We\u2019re now level with France. Germany\u2019s inflation is lower at 2.3%, but it\u2019s facing a double-dip recession and we\u2019re not.<\/p>\n

Things are going to get better.<\/p>\n

Yesterday\u2019s drop couldn\u2019t have come at a better time, with Christmas upon us. Slowing food, drink, toys, games and even petrol prices should give us a lift over the festive period. Retailers will be happier, too, as shoppers discover their Christmas cheer.<\/p>\n

Plus it sets us up nicely for 2024.<\/p>\n

The inflation drop has made the Bank of England look completely out of touch yet again, although it rarely needs help in that department.<\/p>\n<\/div>\n

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    BoE governor Andrew Bailey has made the whole inflationary episode even more painful, by initially claiming it was \u201ctransitory\u201d and refusing to take early action that may have spared us the worse.<\/p>\n

    Now he\u2019s set to make the opposite mistake by keeping interest rates too high for too long, at a risk of plunging us into a needless recession.<\/p>\n

    Incredibly, three members of BoE\u2019s rate-setting monetary policy committee (MPC) voted for yet another interest rate increase earlier this month, which would have lifted base rates to a nonsensical 5.5%.<\/p>\n

    The inflation drop makes that make them look even dafter than they seemed at the time. Headline, core and services inflation are all now materially below the predictions made in the BoE\u2019s Monetary Policy Report \u2013 published just weeks ago.<\/p>\n<\/div>\n

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    Markets have lost all faith in the BoE\u2019s predictive ability, and rightly so. I wouldn\u2019t trust Bailey to forecast Christmas Day.<\/p>\n

    No doubt he will spend the next few days banging on about how inflation isn\u2019t beaten yet and interest rates may still have to rise.<\/p>\n

    Markets will be too busy celebrating to listen. They\u2019re already predicting four interest rate cuts next year, and now they might increase that to five or six.<\/p>\n

    There are still risks. November\u2019s inflation drop was driven by the falling oil and gas price, and that could go into reverse if the Red Sea crisis intensifies.<\/p>\n

    Bailey will seize on any opportunity to talk up the inflationary threat, but is only talking down his own reputation.<\/p>\n<\/div>\n

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    Banks have seen the writing on the wall and are busily slashing mortgage rates.<\/p>\n

    This means we will avoid a house price crash while the stock market will rally, boosting our pensions and Isas. The FTSE 100 is already up 1.37% on this morning\u2019s news.<\/p>\n

    Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will be happy as they\u2019ve thrashed their target of cutting inflation to five percent by year end (even if they had little to do with the outcome).<\/p>\n

    Savers will be the losers, because as I\u2019ve been warning for months, interest rates will fall.<\/p>\n

    But the biggest losers will be Andrew Bailey and the BoE, whose reputations are sinking even faster than inflation.<\/p>\n

    Let\u2019s hope they wake up to the new reality in 2024, and start talking about cutting interest rates rather than hiking them. Then we\u2019ll really see some fireworks.<\/p>\n<\/div>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":"

    [ad_1] Annualised consumer price inflation of 3.9 per cent in November is the lowest since September 2021 (Image: Getty) The inflationary surge of the last two years has cast a huge shadow over everybody and everything. Combined with the energy shock, it\u2019s triggered a desperate cost-of-living crisis, that\u2019s left millions facing a desperate choice between …<\/p>\n","protected":false},"author":1,"featured_media":16465,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/16463"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=16463"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/16463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/16465"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=16463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=16463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=16463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}