Macroeconomics, the economy, inflation etc. *likely to be very dull*

Dorset_Boy

rick_chasey said:

Be as snobby as you want, I’m in the room speaking to leaders of the industry on a regular basis; that’s what informs my view (and presumably the economist article > they’re probably speaking to the same people)

I suspect that’s rather closer to the expertise than an IFA in the sticks if you want to do a p!sing contest based on your job.

After all, what interest would a IFA have in a fragmented and over intermediated pension system?

Utterly pathetic and totally ignorant.

rick_chasey

Quite.

The UK is not unique with regard to pensions beyond an unusual amount of small funds. Pretending it is won’t help solve anything.

That is why the government is doing something about it and why outlets like the economist are writing about it.

rjsterry

Rick, you're being a bit of a d*** about this whether you know what you are talking about or not. There's no need to slag off other people's professional knowledge just because it doesn't align with yours.

rick_chasey

That cuts both ways RJS

focuszing723

Christ! It's kicked right off here. Have diplomat's been withdrawn yet?

briantrumpet

focuszing723 said:

Christ! It's kicked right off here. Have diplomat's been withdrawn yet?

Someone might have lost their marbles.

focuszing723

I agree with Rick, you lot know fvck all, and I was the one how warned you all about IR's so I know my financials, greed is good n all that.

focuszing723

To the Moon!

Stevo_666

What Dorset Boy and Surrey Commuter are saying on this makes a lot of sense to me.

rjsterry

rick_chasey said:

That cuts both ways RJS

Of course. Neither SC nor DB are making sneery remarks about being from the sticks.

wallace_and_gromit

I had time to kill on the train home from the Big City last night so clicked through the links that were included in Rick's originally linked Economist article. Key findings:

- There's a government and industry backed initiative called the "Mansion House Compact". Presumably agreed at Mansion House itself rather than Starbucks near the tube station (where many of my best deals have been brokered).

- It's a voluntary scheme, with signatories aiming to increase the proportion of unlisted equities in a particular type (*) of pension fund by 2030 to 5%

- It's solely a DC-based initiative.

- The signatories are fund managers including Aviva, Scottish Widows, Aegon, M&G etc

- The motivation appears to be 2-fold: firstly, address the likely shortfall (**) in living standards when auto-enrolled pensioners reach retirement age, and secondly, provide equity finance for startups in fintech, biotech, green etc.

(*) The fund type in question is the default fund offered for auto-enrolled pensions. With exposure to unlisted capped at 5% per the Compact, the downsides of such investments (which curiously aren't really mentioned in any of the links) are limited and unlikely to be a game-changer or a potential mis-selling scandal. Even so, one would think the communication to investors would need to be thought through quite carefully.

(**) Per the "FAQs" in one of the links, allocating 5% of assets to unlisted equities might increase the fund value at retirement by 7%-12%. Doesn't sound unreasonable as claims go, but rather misses the point re shortfalls, which are largely as a result of folk not contributing enough. Funding a 30 year retirement off a 40 year working life is an expensive business. IIRC, auto-enrolment tops out with a 5% employer contribution so most folk don't contribute more than the 5% to secure the employer contribution (and many just contribute the minimum 3%+3% I think). And 10% contributions over 40 years just isn't enough.

So not a game-changer for pensions, but potentially a "good thing" for startups, assuming the 5% allocation goes to the UK, which it doesn't have to, which raises the question as to whether investing in unlisted US equities would be a better bet if you want to take some extra risk.

rick_chasey

UK inflation lower than expected, retail sales revised upwards, a Christmas gift all round.

pblakeney

That's strange.

"The UK is at risk of recession after revised figures showed the economy shrank between July and September."

https://www.bbc.co.uk/news/business-67799713https://www.bbc.co.uk/news/business-67799713

Jezyboy

I'm not sure it's strange? It seems impressive that it's stagnant and not contracting.

kingstongraham

Let's all say it's fine, and it will be so.

wallace_and_gromit

I think it's "strange" that so much seems to ride politically on whether the UK is in a recession or not. Lower GDP figures from previous quarters due to revised estimates is interesting academically, but doesn't change the present or the future. (*) I guess it's just an easy political message to "sell" than time-series analysis of small, positive GDP increases.

(*) The flip side of this is that that when the ONS revised its GDP estimates for 2021 and 2022, the UK's economy turned out to be 2% bigger than was previously thought. This scuppered the "Bottom of G7 growth league" or "Only major economy still smaller than pre-pandemic" arguments but it didn't make anyone 2% richer.

rick_chasey

cant quote but in the BBC article above it discusses retail spending and real incomes rising so it’s not all bad

wallace_and_gromit

Forward-looking indicators such as PMI also looking promising. We're seeing a lot more discretionary activity in real estate lending recently as interest rate expectations are now more favourable and less volatile than has been the case in recent months.

Another issue with the existence or otherwise of a recession is that with reporting delays and a 6 month time period being involved, this is a very backwards-looking indicator.

pblakeney

I said "strange" as a growth in spending doesn't usually go along with a dip in GDP.

That said, the whole recession/growth being a swing of 0.2% is a nonsense. Flat is bad enough news anyway.

With reference to the 6 months delay above, is it not worse than that as for SMEs they are reporting for the 12-18 months prior to that 6 month report?

wallace_and_gromit

"With reference to the 6 months delay above, is it not worse than that as for SMEs they are reporting for the 12-18 months prior to that 6 month report?"

There's a lot of retrospective revisions to the initial estimates, sometimes many months down the line. So whilst GDP is essentially not growing, we could be in the farcical situation of a news announcement that we were in a recession a year ago but are no longer in one, as a 0.0% gets revised to -0.1% etc.

pblakeney

Exactly.

It's all a nonsense but for headlines and historical stuff. It certainly isn't representative of "today".

rick_chasey

Less inflation is good for everyone at the moment.

Jezyboy

Less inflation is certainly good news. Otoh as ever the official figures don't necessarily reflect how people are going to be feeling about the money in their pocket.

I still feel like every time I get to the supermarket checkout, I'm paying more than I'd expect...even if the prices have not necessarily gone up significantly for quite a few months now.

briantrumpet

Food inflation is still at about 9%.

https://www.bbc.com/news/business-65037292

It is partly because the UK has to import a lot more of its food than other European countries, says Grant Fitzner, chief economist at the Office for National Statistics (ONS). "Import prices have gone up a lot more than domestic food, that's one reason why food prices have been so consistently high [in the UK]," he says. "If you compare headline inflation rates with most European countries we are a little bit higher, but if you look at food prices, they are more significantly higher." Danni Hewson, head of financial analysis at investment firm AJ Bell, agrees. "The UK imports around 50% of its food which means adding additional transportation costs to the mix and on top of that costs associated with Brexit red tape for anything coming from the EU," she says.

TheBigBean

Over the last six months the annualised inflation rate for food is 2.27%.

TheBigBean

If anyone ever wants to read beyond the headline the data is here. The link is unchanged for every release.

https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/consumerpriceinflation

pblakeney

Over the last six months the annualised inflation rate for food is 2.27%.

Just goes to show it depends on what is measured. Our grocery shopping is at least 30% up on last year for the same items.

focuszing723

Over the last six months the annualised inflation rate for food is 2.27%.

I think that figure is utter rubbish and assumes people don't go into supermarkets, but they do that's how they survive n things. Even virtual people see the prices when online grocery shopping.

2.27%! Lol.

TheBigBean

6 months is a different period of time to 12 months.

rick_chasey

Numbers really aren’t as bad as people had anticipated.