Tuesday, 22 May 2018

UK April 2018 Government borrowing falls to lowest leve since 2008

So the good news is that in April, Government borrowing fell to £6.2 billon, down from £7.3 billion the year before. Okay so as a percentage of UK Government spending who cares about a billion here or there, but as ever these things add up.

The critical piece is for me yet again this will show up the Bank of England forecasting and prediction capabilities. Last month they were quite happy to quote the UK GDP slows to 0.1% growth in Q1 of 2018. On the back of this they held interest rates at near record lows and enabled yet another spasm of Remainer questioning of Brexit.

However, when you see that the ONS also showed Public Sector Net Borrowing was down from £2.1 billion to £1.3 billion in March - also a ten year low, then we might wonder why.

Is Government spending much less? Well that is unlikely as our overall debt to GDP ration is still rising.

What is happening are rising tax receipts, Corporate tax, Inheritance tax and Stamp duty taxes have all shown strong growth over the past year. Rising tax receipts can only realistically happen in a growing economy unless they have been raised or reduced around the Laffer curve.

So for me something is amiss, there is no way the economy is producing a few billions in extra taxes over the first months of the year whilst also posting sclerotic growth - one of these numbers has to give.

My guess will be the first three months of the year will be revised up to around 0.3% GDP growth, not stunning but adequate in the circumstances. The annoying thing is that for the Remainiacs this will not affect their mantra of the economy is crashing due to Brexit when there is simply no evidence of this and to date all the evidence has been the to show that threat of Brexit has either no effect or a slight positive to date.

Monday, 21 May 2018

Blast from the Past: Pete & Dud - Glidd of Glood

The Capitalists are rather busy just now, so here's a pot-boiler for y'all.  One of the all-time classics from Pete 'n' Dud.  Many of you chaps will be too young to have seen this first time around - or maybe ever!

(And it's SFW ...)


Saturday, 19 May 2018

C@W SCOOP! Where Meghan's Mum Gets Her Hats!

The BBC sub-title writers have a theory.   "Doria looks beautiful in a hat ...

© 2018

Friday, 18 May 2018

Interesting things to do this weekend

Not sure what to do with yourself, there is a plethora of things to do..which do you prefer?

1. Watch a Wedding on the Telly

2. Watch a football match on the Telly

3. Read The Observer cover to cover

4. Go on a rally to protest over Hamas/IDF somewhere in London

5. Mend the Garden fence

Or something else entirely....

Wednesday, 16 May 2018

The madness of pensions maths

Great article here by Royal London, posing as a news article in the Evening Standard.

I guess the pension company PR think they are pushing a great line here about how we all need to save more and give more money to them so they can get more fees.

To me (this is a 'rant alert' phrase), the result just goes to show how completely crazy the pension system has become. Let's take them at face value, you need £260,000 as an average person to have a decent retirement. I have a great job in the city and am very lucky. I have worked for twenty years, if I work for another twenty I am still unlikely to get to that level of pension saving.

Indeed, over the past 10 years on a cash invested basis, my pension savings are negative - i.e. it would have made more sense to put money in the mattress than into work pension funds. As far as I can ever work out this is because the multiple fees they take out at the beginning of a years and other management fees consistently are higher than any returns I might make on their products.

However, I digress, if only to show that I am less than convinced saving into pensions is such as good idea for the savers. Moreover, to save £260,000 in today's money over 40 years requires saving £6,000 a year, or around 1/3rd of the average salary post-tax. This already includes the state pension and benefits top ups and assumes you have paid your mortgage, if you rent then it is a mere £440,000 needed - or just over half your salary for every year you work (assuming the average wage of £26,000 a year).

It would of course help if the pensions funds offered some compound growth on your investments with them but they try very hard indeed to avoid this outcome - for them, every penny kept is pure profit. The same with the crazy annuity rates which, thankfully, the Government has moved away from enforcing.

Logically, none of this is any good. The best way to save will remain taking out the largest mortgage you can afford at any time, paying the interest and relying in the capital growth. Alternatively, paying off the mortgage too if you feel that is less risky (I happen to think that long-term the risk is with the Bank not the borrower, but each to their own). Then upon retirement, sell your property and move to Greece, Thailand or wherever you can get some value for your hard work. On no account try to live in the UK on pension saving sin the future, this will not work out for you even slightly. All the media today is hued by the many millions of people on final salary pensions which today would require literally millions of pounds in pension savings, of which there will be near zero in the next few years as those schemes were closed long ago.

So in summary, Royal London are mad to think this strategy of reminding people how impossible it is to save will be a long-term benefit for their company - they should stick to lobbying the Government to make pensions compulsory which they have done successfully and then go for making higher contributions compulsory - but don't tell their victims this!