High costs of living alone
Living without roommates or a partner is becoming more popular despite the high costs of living making this more difficult.
Within the last year the amount of people living alone has risen from 178,000 to 237,000.
Alan Boswell Group have compared the cost of living alone to the square footage of a 1 bed flat, studios and single room occupancies to determine the cheapest and most expensive areas of the UK to live alone.
The cheapest places to live alone
The cheapest places to live alone are in the North of England or in the midlands with an exception of Plymouth which sits at NO. 9 on the Alan Boswell list with the price per square meter at £11.77.
Price per square meter is £8.85 making it the cheapest place to live as a single occupant.
Price per square meter is £9.17.
Price per square meter is £9.22
Price per square meter is £9.91.
The most expensive places to live alone
Cities in the South of England are the most expensive to live alone with an average price per square meter of, £18.09 which is a 76.95% increase from the North which is, £10.22 per square meter.
Price per square meter is £23.39.
Price per square meter is £19.33.
Price per square meter is £19.32.
Price per square meter is £17.40.
The cost of living alone
Living alone will always be a more expensive option than sharing the cost of rent and household bill with a partner or roommate.
The average monthly costs of living alone are reported at £651 excluding the costs of rent. These costs include, council tax, household bills, groceries, phone bills and more.
Those who live alone are spending on average 92% of their disposable income on living expenses compared to 83% for couples.
Living alone also means spending on average, £15 more on grocery shops per week.
This explains the data that 47% of young singles have no savings at all.
How to cut down costs
There are a few ways in which you can reduce your spending including, lowering your energy bills through useful tips to lower your energy usage or installing a smart meter.
If you are on a low income then learn a few ways you can still budget and use you money efficiently to stay afloat.
Setting yourself a budget which prioritises rent and bills to help you keep track of your money. This can be done by using finance apps.
Don’t be defeated by high living costs and a low budget, learn ways to make your money work for you.
Good news today as the inflation rate remains steady at 2% - the Bank of England’s target. The Office of National Statistics reported the forecasts from economists had placed the inflation rate at 1.9%, which unfortunately has not been met.
Inflation within sectors
The Bank of England was hoping for service inflation to be down to 5.1% however, this remains at 5.7%.
The so called, Taylor Swift effect could be causing hotel prices to be up by 9.8% up from 7% as her Eras Tour makes it’s way around the UK. With summer starting, the season of concerts and getaways begins causing hotel prices to increase.
- ONS report that the sector experiencing the lowest rate of inflation was clothes and footwear.
- The sectors keeping inflation high are hotel prices, restaurants, transport and household services.
- The price of restaurants and cafes saw a monthly rise of 0.3%, lower than the 0.5% rise in the previous year.
- Transport inflation is largely due to the price of second hand cars where prices have decreased by 0.3% compared with a decrease of 1.9% a year ago.
- Food inflation led the way in the dropping inflation rate in previous months. ONS reports that the price of food and non-alcoholic beverages rose by 1.5% in the year to June 2024 compared with the rise of 1.7% the previous year.
Bank of England decisions
The Bank of England next meet every 6 weeks to discuss any changes and decide on the base rate. They will meet next on the 1st August.
Many hope they will drop the base rate from it’s current 5.25% however with several sectors remaining high this could be unlikely.
We hear a lot about the benefits of investing and the need to increase your income through investments. However, this isn’t always an option for everyone and starting to invest can be a big decision and should be thought out.
Investing is a great way to build on your income as well as create financial independence. Cash in your bank account will be losing value without a great interest rate which is hard to come by due to inflation. With investing, your money will adapt with inflation and the value of your money is protected.
If you are ready to invest find out which type of investing suits your goals and situation the best.
When should I start investing?
You Gov shares decline more than a third after pollings this morning and warnings come that annual profits would fall short of their forecasts.
You Gov do not make the majority of their revenue from the electoral polls and instead they are a company which conducts market research for businesses to generate their income.
They have shared 9 public polls since the announcement of the UK election date.
They conduct opinion polling throughout this period for the upcoming election, they share the consensus of the UK public on the political parties to reveal predictions on which way it could go.
Expected revenue
Financial Times shares the updated expected profit for You Gov which has fallen from £48,3million in 2023 to between £41 - £44 million now.
Most would expect You Gov to experience a boost during election time however this is a small factor towards their revenue.
Why?
The Financial Times reveal what the company feels are the factors to blame for their plummeting shares…
- The slowing sales of its data products division
- The declining demand for its fast research services
- The challenges seen in their European, Middle East and African Markets
Their focuses for the next financial year
- Optimising its cost base
- Prioritising investment in key growth areas
- Developing AI capabilities
- Enhancing Sales organisations
Today, the Conservative party have announced their manifesto with Rishi Sunak stating their pledges for their time in parliament if they are voted in on July 4th.
The pledges which could affect you
If you're planning to buy a home
- Reviving the Help to Buy scheme for first time buyers. The government will support buyers with a equity loan of up to 20% towards the cost of a new home. Trying to get onto the property market has become a great challenge so the help to buy scheme should help more people struggling to afford the deposit start the process.
- The threshold for stamp duty will be risen so that first time buyers will not have to pay unless the property costs more than £425,000. This means that 8 in 10 first time buyers would not pay stamp duty according to Zoopla. Stamp Duty is a payable tax when you buy property.
If you are a pensioner or will be retiring soon
- Implementing the Triple lock plus for pensioners to ensure they do not have to pay income tax. The state pension has been rising with inflation for pensioners to have a healthy income, as this rises it has become dangerously close to the income tax threshold. This Triple Lock Plus means that the state pension with rise alongside the tax free threshold for pensioners.
For your healthcare
- Investing more into better healthcare facilities and building 40 new hospitals by 2030 to improve care for patients. The Conservatives NHS productivity plan aims to see productivity grow by 1.9% a year from 2025-26 which will unlock £35 billion in savings by the end of the decade. The NHS improvements remain on each manifesto and with 40 new hospital promised to be built, will the staff, training and investment come with it?
If you are young and planning your next steps
- Cut funding for ‘rip-off’ degrees and use this money to fund 100,000 high-quality apprenticeships. This fits into their plan to raise productivity and efficiency during their parliament as seen by their pledge for National service for 18 year olds. The conservative claim they are securing the future for young people, how do young people feel about their options?
Paying taxes
- The Conservative have emphasised their plans to cut taxes this parliament, partly playing against Labour. They have pledged to cut National Insurance by 2p by April 2027 and abolish completely for self-employed. There are 4m self employed people in the UK with the number constantly growing, the conservative are aiming to please large target groups. The aim to cater to working people and the strain of finances through cutting taxes. This pledge means National Insurance will reach 6% by 2027, a tax cut of £1,350 for the average worker on £35,000 according the Conservative Manifesto.
- Cutting National Insurance will cost £2.6bn a year but the Sunak has stated their plans to bring the money from clamping down on tax avoidance which would raise £6bn as well as from lower welfare payments which should raise £12bn.
The Conservative manifesto lay priority on cutting taxes, improving investment which continues their economic trend of using trickle-down economics, in which cutting businesses and income taxes could see results in a greater economy for the UK.
Two leading energy groups, RWE Renewables and PPC Renewables have financed their 940-megawatt portfolio of solar farms in Amyntaio, Western Macedonia through their Meton joint venture company.
RWE Renewables is a leading company in the field of renewable energy and with investments just like this one they are on their way to the success of the transition.
PPC Renewables is a 100% subsidiary company of PPC acting as a pioneer at national and European level in wind and solar energy since the 80s. They are one of the largest renewable energy developers in Greece. This is PPC’s first joint venture with another large private entity in Greece.
This joint venture is vital for the country’s energy transition and will build the largest combined capacity currently in Europe.
Lambadarios law firm acted as legal counsel to RWE Renewables through this project. Their banking and finance corporate teams led by Partners, Prokopis Dimitriadis and Konstantina Siozou as well as Kateria Gini and Christina Kyrgialani. Real Estate matters were handled by Sophia Alonistioti and due diligence issues dealt with by Constantinos Lambadarios, Melina Katsimi, Margarita Kontogeorgou and Sotiria Bouranta.
www.lambadarioslaw.gr
It was announced this week that inflation rates have finally fallen to a ‘normal’ rate of 2.3% after a long road of rising rates. This is much closer to the Bank of England’s target of 2%.
The Bank of England has held their rates at 5.25% setting this to tackle the rising inflation. With the inflation rate falling so significantly this could mean the UK could see rates coming down this year. Inflation falling typically means the mortgage rates can fall with it.
The rising wages set in April and the energy price cap which was set in April as well this has been a driving factor in falling inflation.
Predictions
Financial markets predict a cut in June or August for mortgage rates with the inflation rate holding steady.
2 out of a 9 person monetary policy committee voted for a 0.25% cut in interest rates which is an improvement from just 1 vote previously. This could be a sign they are on their way to making the cut.
Economists predict that the interest rates could be cut to 4.75% or 4.5% by the end of 2024 and by the end of 2025 to 3.5%.
It’s not all positive
The forecasted inflation rate was 2.1% before the announcement this week of 2.3%. This slight difference could add concern that it is not falling as quickly as predicted and the Bank of England could see this as a reason not to cut interest rates.
Mortgage rates.
The bank of England set the base rate which is currently at 5.25% which sets the rate of borrowing money for mortgages and other loans. For first time buyers this has made it almost impossible to get onto the property market with the cost of living and high interest rates making it a challenge to save enough. In May the average 2 year fixed rate mortgage was around 4.74%.
In the first quarter of 2024, repossessions increased by 36% as people struggled to pay off their mortgage.
Those who are remortgaging this year could be in a for a lucky break if the interest rates fall in time allowing them to get a better deal.
Councils declaring bankruptcy
Since 2018 8 council have declared bankruptcy including 4 in the past 15 months which are, Woking, Nottingham, Birmingham and Thurrock.
Almost 1 in 10 councils in England have warned that they will go bankrupt in the next 12 months due to financial trouble.
A survey based on 160 responses from 128 councils out of 317 shows the widespread concerns and struggles. It found that 9 in 10 council plan to raise council tax whilst others will be raising the price of services such as parking and waste disposal.
They expressed their struggles over the costs of children’s services and the soaring homelessness bills as the biggest risk factors for district councils.
The problems of Birmingham Council
In late 2023 Birmingham council effectively declared bankruptcy following a £760 million equal pay liability bill.
This led to drastic measures including a 10% increase in council tax.
The equal pay liability was not the leading factor here despite the council highlighting this aspect.
The Birmingham council has also been experiencing a faulty IT system which meant their finances were unavailable and potentially inaccurate for about 7 months.
They paid over £100m to have a badly implemented upgrade which only created IT issues as well as being £100m down.
Due to this they are still waiting for the figures to be audited and verified as their outgoings and incoming payments could not be accurately checked. The figure could be severely overstated and the reactions unnecessary.
Many councillors believe this problem should be corrected before declaring bankruptcy as well as taking drastic measures for its over 1million residents.
Your Council
Northamptonshire issued a notice in 2018 and was the first local authority to do so in 20 years. Since, Slough, Croydon, Thurrock, Woking, Birmingham and Nottingham have all issued a notice of bankruptcy. Many others have warned that a notice could be in their near future too.
Over the next two years there will be a predicted £4bn gap in funding for councils.
At the start of 2024, the Department for Levelling Up, Housing and Communities added £600m to the annual local government finance settlement. They aimed to support local authorities with social care as well as rural services.
In February, they confirmed that councils would be provided £64.7bn funding for the 2024-25 financial year including the earlier £600m. The rise assumed that all councils would agree to the maximum council tax increase, 5% for unitary and county councils, and 3 per cent for district councils.
Later in February they announced that 19 councils would receive the Exceptional Financial Support framework with 11 receiving funding for previous years including, Birmingham, Bradford, Cheshire East, Croydon, Eastbourne, Havering, Nottingham, Plymouth, Stoke-on-Trent, and Woking.
The UK property market has seen sky rocketing prices including rising mortgage rates making it more difficult for people to get on the property ladder. House prices have been falling slowly even in places like Manchester.
Where has seen the biggest price falls?
East of England, South East and South West have seen the largest price falls in the last year with the average home costing £344,000.
This is still +30% above the UK average.
The Property market 2024
Zoopla has recorded that there is currently an increase in sales and demand for house meaning on either side of the transaction this could be getting easier
There is 15% more property sales agree than in 2023.
An 11% uplift in buyer demand as buyers return to the market.
There are also 21% more homes for sale which is increasing the choice for buyers.
The most expensive places to buy a house
London will always win the top spot and currently the average price here id £523,400 which is almost two times more than the UK Average.
If you are trying to save, learn more about finances or want to take on some new techniques for your money then reading from those who have done it or are experts in the field could help you.
There is so much advise out there it can become overwhelming, when finding the book for you make sure it contains what you are looking for and won’t make it more complicated than necessary.
Below is a short list of books which could help you to invest, save, learn about finances and help you build better habits. Pick up one of these helpful reads for world book day and learn more about your finances.
Key to my approach to markets is that they require political stability to thrive – hence the most remunerative markets tend to be found within the most stable nations. They tend to have robust and enforceable legal systems, solid financial infrastructure and a culture enabling transactions and risk-taking. That’s the key to understanding the fundamental strength of the City of London – centuries of stability.
All around the world, we are now seeing a rise in instabilities – triggered by supply chain breakdowns, the supply shocks in Energy and Food, and now wage demands. Nations are struggling with inflation, rising interest rates, higher debt service costs on borrowing, rising bond yields, currency weakness, and how to address multiple vectors of financial instability as they try to hold their financial sovereignty together.
It’s occurring at a time when we seem to have reached the lowest common denominator in the political cycle. That’s a critical problem – voters need leadership in crisis, and they can easily be fooled by populists.
Confidence in a nation’s political direction and leadership is one of the key components of the Virtuous Sovereign Trinity, my simple way of explaining how Confidence in a country, the value of its Currency, and the Stability of its bond market are closely linked. When they are strong – they can be very strong. Strong economies rise to the top.
But, if any one of the Trinity’s legs were to fracture, then the whole edifice could come tumbling down. Which is why we should be concerned sterling is down over 10% this year. It strongly suggests global investors have issues with the UK.
Key to my approach to markets is that they require political stability to thrive – hence the most remunerative markets tend to be found within the most stable nations.
The UK is a good example of what might go wrong. If confidence wobbles in the government’s ability to handle the multiple economic crises now upon us, particularly the rising tide of industrial unrest as workers demand higher salaries to cope with inflation or servicing the nation’s debt, then the UK’s currency and bond markets could come under massive pressure. Investors will demand a higher interest rate to account for the increasing risk inherent from investing in the UK, while the currency could tumble as investors sell gilts to buy less vulnerable more stable nations.
At least the UK is financially sovereign. We control our own currency. Sterling may weaken, but we can always print more to repay debt… Except that would probably cause a global run on sterling as confidence in the UK would further tumble. If the currency leg were to fracture, interest rates would have to rise, wobbling confidence further.
The Virtuous Sovereign Trinity sounds stable, but experience shows it can quickly turn chaotic if issues are not swiftly addressed.
Clearly, the UK has some current confidence “issues” regarding the incumbent political leadership. The growing perception that Boris is a “lame duck” magnifies internationally held concerns about how his government has failed to seize the opportunities (such as they were) from Brexit, doubts about energy and food security, and the apparent dither in policies are all perceived as reasons for sterling weakness and are another reason bond yields are rising as global investors exit.
While the UK’s debt quantum should be manageable – Italy is somewhat different. As part of the Euro, Italy is no longer financially sovereign. It has rules on Debt/GDP to observe (and ignore). But effectively Italy borrows in a collective currency it has no real control over. It has to plead with the ECB for the right to borrow money and will rely on the ECB to announce special measures to make sure its debt costs don’t turn astronomical. Without the ECB, Italy would be heading straight for a debt crisis.
That’s why ECB head Christine Lagarde is desperately trying to guide the ECB towards the establishment of anti-fragmentation policies to stop Italian debt instability leading to a renewed European sovereign debt crisis. Fragmentation means Italian bond spreads widening to Germany – the European sovereign benchmark. It’s a political issue because Lagarde is no central banker, but a politician sent in to lead the ECB to the inevitable compromise that rich German workers will pay Italians’ pensions.
In the USA there is an even larger political impasse developing. The US Supreme Court’s decision – by 4 old men and one catholic woman appointed by Trump – to deny women the right to control their bodies by undoing abortion rights highlights the increasingly polarized nature of US politics. Republicans, and their fellow travellers on the religious right, are delighted. Democrats are appalled.
US politics simply doesn’t work. All efforts by Biden to pass critical infrastructure spending have been stymied. There is zero agreement between the parties – each has destroying the other at the top of its to-do list, rather than rebuilding the economy. The result is increasing doubts on the dollar. It’s a battle the Republicans are winning by dint of managing to stuff the Supreme Court with its appointees. It’s no basis for democracy or market stability.
At the moment the dollar is the go-to currency, and treasuries are the ultimate safe haven. It could change. The world’s attitude to the US is evolving. The West may be united on Ukraine, but global support is noticeably lacking. 35 nations representing 55% of the global population abstained from voting against Russia at the UN. The Middle East and India see Ukraine as a European problem and a crisis as much of America’s making. As the West lectures the Taliban on schooling girls, the Republican party has moved the US closer to a dystopian version of The Handmaid’s Tale of gender subjugation.
As the World increasingly rejects America, then America will reject the rest of the World. Time is limited. The Republican Administration, run by Trump, or kowtowing to him, will likely pull the US from NATO and isolate itself. That’s going to become increasingly clear over the next few years. The dollar, the primacy of Treasuries… will leave a massive hole at the centre of the global trading economy.
It will be particularly tough for Europe. As we seek alternative energy sources, what happens when Trump 2.1 proves as pernicious as Putin and shuts off supplies?
The supreme court decision was clearly timed to come at the Nadir of this US political cycle – a weak president likely to lose the mid-terms in November – when the Roe vs Wade news will be off the front pages. It means the damage to the Republicans in the Mid-Term Elections could be limited – they will still make the US essentially ungovernable for the next 3 years.
If the US was a corporate, it would be a massive fail on corporate governance. But it’s not. It’s the current dominant global economy and currency. Politics and markets can’t be ignored.
The threat is becoming increasingly clear. It’s a massive threat to markets, society and economic growth. Expect to read a lot about it.
The big news in December is Jerome Powell, Fed Chair, finally admitting the post-COVID inflation we’ve seen building over the past 18 months is anything but “transitory”. It’s here to stay. That’s come as something of a surprise to many analysts who went with the central bankers dismissing inflation as a likely short-lived issue, a mere post-pandemic hurdle that would swiftly be passed by. Over the coming weeks, sentiment is likely to shift towards new long-term inflation scenarios as the inflation numbers remain stubbornly high. It’s difficult to imagine an inflationary scenario that’s positive.
Inflation is currently running a shocking 5-6% across the Western Economies – for how much longer, or how much higher is a “how long is a piece of string question.” We don’t know. Inflation is now in a spiral of supply chain hick-ups, wages, earnings and contradictory expectations. Inflation may ease tomorrow. It may not. Be a boy scout… Prepare for a rough ride.
Unexpected consequences include fears that inflation will boost rising pandemic populism, leading to protectionism and the end of globalisation – a less connected global economy is likely to prove inflationary, especially in terms of increased tariffs.
What is, perhaps, most frightening, is how little financial professionals – from central bankers, investors and traders – really understand what inflation is and how it emerges. It is overly simplistic to state inflation is “everywhere a monetary phenomenon” as the uber-monetarists proclaim. That fundamental ignorance could create massive policy mistakes and market uncertainty.
Unexpected consequences include fears that inflation will boost rising pandemic populism, leading to protectionism and the end of globalisation – a less connected global economy is likely to prove inflationary, especially in terms of increased tariffs.
The next time some “expert” tells you inflation is all the fault of Governments borrowing too much, ask them to explain how and why. What a vast number of market participants don’t get is inflation doesn’t follow rules – it follows sentiment. Governments and central banks have been stuffing the global economy with liquidity for the last decade, but it's only in the last few months the pandemic shock has crystalised real inflation. Why… Because suddenly people fear inflation.
Let me coin a new mantra on inflation: “Inflation is everywhere what people fear it might become…”
Conventional wisdom assumes inflation can be mitigated inflation by cutting liquidity; central banks raising interest rates (tightening), while governments can raise taxes and cut spending programmes (austerity). These monetary arguments are logical but also highly simplistic and create largely erroneous hopes and expectations. Hope should never be a strategy. Conventional wisdom is cheap.
The confusing reality of the system of multiple demand and supply transactions we call the global economy is it’s anything but a series of binary questions. It’s unfeasibly complex. If you raise interest rates that may cause a rise in the relative value of the currency, thus reducing inflation from imported goods, but it will equally create a series of shocks through the economy in terms of more expensive loans, impacts on retail jobs and services and rebalance the whole demand/supply equation as a trillion new decisions will be made by economic participants.
Hope should never be a strategy. Conventional wisdom is cheap.
Financial markets work because participants are constantly evaluating every nuance of information to determine future prices. Prices are a reflection of the market putting together everyone’s perception like some enormous voting machine. Inflation is just a particularly important part of the economic picture influencing the market vote at present. Should we let it panic us?
Maybe not - we’ve just undergone a period of unmatched and sustained global monetary creation through the past 12 years – since 2009. Stock prices have tripled – posting massively higher gains than the relatively lacklustre economic growth we saw over the same period. It’s financial asset inflation, pure and simple. It’s happened because stocks look relatively cheap to ultra-low interest rates, and central banks have been pumping liquidity into the financial system (in the hope of creating economic activity) via QE.
The result is massive financial asset inflation on a cause and effect basis: make money cheap and financial assets will rise. (Conversely, that’s why everyone predicts a stock market crash when rates (the price of money) rise!)
But long-term Financial Asset Inflation since 2009 has created a whole series of massively destabilising consequences. The rich have become phenomenally richer – buoyed by soaring stock prices. Generally, they are exactly the same people saying governments are borrowing too much, taxing them too much and it’s time to cut spending! Expectations that markets will only keep going higher have sucked in legions of retail investors convinced they’ll get rich (only if they stay lucky). The results of chronic inequality, political blindness and insane financial optimism make for a hopeless unbalanced and unfocused economy.
The real value of the global economy is not the market cap of an electric car company worth trillions, but the number of electric cars being produced and sold. (These are very different metrics – one is perceived future value, the other real value.)
What a vast number of market participants don’t get is inflation doesn’t follow rules – it follows sentiment
Inflation in the real economy is not cause and effect. It’s a constantly evolving perception and expectations led threat. It changes as the votes with the markets change and the behaviours of economic participants change.
The supply chain crisis as the global economy reopened triggered a host of consequences around the globe. What’s happened has been complex and spawned a host of unforeseen knock-on effects. The coronavirus and successive lockdowns are still throwing new shocks into the system – as a result, the system is becoming increasingly chaotic and impossible to predict as the threat board keeps changing.
This is roughly how it worked:
Economies around the globe shuttered themselves through lockdowns and working from home. Goods become scarce – from construction lumber to microchips at both micro and macro level, from local shortages to national level. Prices of scarce goods rocket – often temporarily till new supply leaven shortages. However, workers perceive higher prices and demand higher wages to compensate – triggering wage inflation. Prices become elastic to the upside and sticky to adjust downwards. Companies raise margins and prices to meet wage demands, fuelling further wage demands and declining demand. The intricate balances between demand and supply become increasingly chaotic, and more so when new COVID lockdowns raise new supply chain threats. Throw in an energy inflation spike and you create a recipe for disaster.
The key thing is not that inflation is simply due to the consequences of too-low interest rates (the monetary phenomenon) or rising government indebtedness (pumping money into the economy) but is due to the expectations of crowds towards perceptions of rising costs.
In a crisis, human behaviour tends to become increasingly difficult and fractious to predict. The unpredictable behaviour of crowds makes Central Bankers policy choices fraught. Traditional inflation responses like austerity, raising taxes, tighter monetary policy, are as likely to cause market instability and generate increased expectations to push inflation as to ease it.
The time to cut liquidity, the amount of money sloshing around the financial system was a long time ago. That money – that’s fuelled financial asset inflation – is now pouring into the real economy in terms of buying real assets like property, pushing up real inflation.
Complex eh? But don’t panic… yet.
