I try to write a finance post on a Friday but I was busy doing other things this week. Inflation is eroding our savings and investments now. With inflation running at 10.1% all we can do is look for investments that will give us a decent return and not be too much of a risk. I have turned to defensive stocks that give lower returns but are safer bets. I’m still keen on banks but I am currently considering having a punt on Associated British Foods owners of Primark. I think Primark will do quite well over Christmas as people queue to buy Christmas jumpers and socks! We all have high energy bills and so we are being thrifty and frugal and shopping around but there will still be money going into the shops at Christmas.
Here in Wednesbury, we have a lantern parade this afternoon and a big switch-on of the Christmas lights with celebrities and a Christmas tree at the centre of it all. The council’s events team are organising it with help from local civil society groups. That will get people in the mood to spend money!
I’ve just had my energy bill. That was £373 and that was for autumn! I’ll pay another direct debit this week and then wait for my £66 to be paid back to my bank account. My energy account is still in credit and I’m using less energy than last year but I still have concerns about what will happen in April when OFGEM raises prices again. The energy market needs to be fixed and we need to get rid of “green” levies and VAT on energy.
To make matters worse they are changing the allowances for capital gains. We can’t win! We have to expect that the pandemic will have to be paid for but we all paying for Brexit and for that Kwarteng Catastrophe in September.
The big question now is what will the MPC do on the 15th of December? There is no January MPC meeting so they have to think ahead. An interest rate rise is just about certain but how much 1/4 or 1/2%? The latter would be sensible but not popular. A rise would mean higher mortgages and higher interest payments for the government too.
Looking through analysts’ predictions and recommendations of UK top companies most opinions were “Hold”. There weren’t many advising “buy”. Reckitt Benckiser has a strong buy and I did buy recently. 7% of analysts say sell ABF, 14% say buy and the rest say hold. I’m more optimistic that the Primark owner will do well especially as it has a buy-back programme. I bought Beazley and the analysts are 100% buy for Beazley. We have to limit risks and still look for bargains now.
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