
Mel Stride: ‘what I would do differently'
She began by stressing that, despite what recent reporting might suggest, she is 'okay' – the economic indicators, however, suggest that the economy is far from okay. Just this morning, the Office for National Statistics (ONS) reported that inflation hit 3.6 per cent in the year to June – well above the 2 per cent target.
On this special edition of Coffee House Shots, James Heale and Michael Simmons are joined by shadow chancellor Mel Stride, who offers his prescription for Britain's ailing economy. He outlines how he would have conducted the speech at Mansion House, how he will spend the recess with business leaders of all descriptions in 'listening mode', and why – when it comes to the big institutions such as the OBR, the Treasury and the Bank of England – he 'isn't ruling anything out'.
Produced by Oscar Edmondson.
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Daily Mail
an hour ago
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How Rachel Reeves could clobber the middle classes with a wealth tax sneaked through the back door: Money experts reveal what every family and pensioner must know now
Fears are mounting that middle-class families could face a devastating tax raid on their wealth as Rachel Reeves scrambles to find a way to fill the hole in the nation's finances. The Chancellor last week refused to rule out a new wealth tax, while only promising that protections will remain in place for 'working people'.


Times
3 hours ago
- Times
McDonald's, the only firm serving up income with a side of growth
How do you fancy having your standard of living cut in half when you are too old to do anything about it? That's the dismal prospect facing many who are preparing for retirement with life savings that lack protection against the insidious effects of inflation — and it's part of the reason why the government is on a drive to get more of us investing. Even apparently small reductions in the purchasing power of money can have big effects over the 20 years or so that the typical pensioner can expect to spend in retirement. According to the Office for National Statistics, the consumer price index (CPI) measure of inflation was 3.6 per cent over the year to June, while the retail price index (RPI) measure was 4.4 per cent. You can see why politicians and their public relations people prefer to quote CPI, while the gilt or bond markets — where governments borrow from international institutions — reckon that RPI is a better measure of what's really going on. Either way, if those rates of inflation remained unchanged, CPI would cause the purchasing power of your money to plunge 50 per cent in 20 years, while RPI would do so in just 16 years and four months. Politicians and everyone working in the public sector need not trouble their heads about any of this, because their defined benefit pensions have inflation protections subsidised by the good old taxpayer. But all of us in the private sector, who must pay for our own retirement with defined contribution pensions, had better think about how we can preserve — or even increase — the purchasing power of our savings. That's why this 66-year-old DIY investor, unlike most financial journalists, keeps banging on about dividends, or the income that some funds and shares can deliver. It is important to be aware that dividend yields — the income that shares pay, expressed as a percentage of their price — are not guaranteed and can be cut or cancelled without notice. High-yield investments often entail high risks, as demonstrated dramatically when Houthi rebels recently sank a bulk carrier ship in the Red Sea. Fortunately this was not one of the 20 vessels operated by Tufton Assets, formerly Tufton Oceanic Assets (stock market ticker: SHPP), but the inherent risks of investing in shipping are reflected in the rewards of this top yielder in my Isa, which pays 8.9 per cent income. It's only fair to add that Tufton shares I bought for 86p in August 2021 cost exactly the same today — so they have achieved no capital growth at all. But, more positively, income from the shares has increased by an annual average of 6.5 per cent over the past five years, according to the independent statisticians at LSEG, formerly the London Stock Exchange Group. The past is not necessarily a guide to the future. But a high and rising tax-free income does provide two reasons to be cheerful when many other economic indicators make me fearful. Much the same can be said about Greencoat UK Wind (UKW), a £4.4 billion fund that manages offshore wind farms. This is the second highest yielder in my Isa, delivering nearly 8.2 per cent income, with dividends rising an annual average of 7.6 per cent over the past five years. If that rate of ascent could be sustained it would double shareholders' income in less than a decade. Less happily, this is another example of the risk that seeking high dividends can lead to low or no capital returns; Greencoat shares I bought for £1.45 in August 2023 now cost just £1.21. • Is it worth buying shares in Greencoat UK Wind? That's why it could make sense to consider less income today in the hope of more capital growth tomorrow. For example, Ecofin Global Utilities and Infrastructure (EGL) is another self-descriptive investment trust — it yields 3.9 per cent, with dividends rising 5 per cent on the same basis as above. Neither number is quite as exciting for income-seekers as those mentioned earlier, but Ecofin shares I bought for £1.52 in September 2019, as reported here at that time, cost £2.20 at close of trade on Friday. That helped this fund, focused on a wide range of electricity and gas companies, become the fifth most valuable holding in my portfolio. Exchange traded funds (ETFs), investment and unit trusts may reduce the risk inherent in stock markets, which is a big worry for pensioners who cannot make up for losses with a bit of overtime or a pay rise. These pooled funds can diminish risk by diversifying our exposure over dozens of different companies, countries and currencies. That should mean they don't all go down at once. Investing directly in a single business might be more risky but can also be more rewarding. For example, the world's biggest fast food business, McDonald's (MCD), yields 2.4 per cent income, which has risen an annual average of 7.5 per cent over the past five years. Even more remarkably, it has increased shareholders' income every year since 1976. That makes it what Americans call a 'dividend aristocrat' — a Standard & Poor's share that has raised dividends for more than 25 years. • My six sovereignty shares can help you and the UK at the same time Never mind the macroeconomics, I invested 2 per cent of my life savings in McDonald's when I paid $95 in July 2014, as reported here at that time. They cost $298 on Friday, supersizing this shareholding to become the second most valuable among 50 constituents of my forever fund. This just goes to show that income-hungry investors can have our burger and eat it. Either way, with or without fries, I'm lovin' it. Short-term share price shocks can create opportunities for long-term investors, and it's better still when dividends pay us to be patient. Consider the world's biggest chocolate maker, whose share price plunged by 13 per cent on the day it unwrapped bad news earlier this month. Few folk in Britain have heard of the Swiss business called Barry Callebaut (BARN) but many enjoy its produce, which it sells to better-known retail brands including the Cadbury owner, Mondelez, and the KitKat maker, Nestlé. High cocoa prices following a poor harvest have hit all the above, as more expensive ingredients eat into profits. Just two countries, Côte d'Ivoire and Ghana, produce nearly 70 per cent of the world's cocoa. Barry Callebaut shares traded above 1,600 Swiss francs last year but I bit into them at SwFr766 in April, as reported here at that time. They had bounced back to SwFr950 earlier this month before another profits warning prompted that double-digit meltdown, when I doubled my stake at SwFr858 on Monday. They traded at SwFr1,016 on Friday. These shares yield 3 per cent gross dividend income, which has risen by a measly average of 2.2 per cent a year over the past five years. Similarly, Nestlé shares I bought for SwFr65 in March 2014 cost SwFr77 last Monday and yield 4 per cent income, rising by 2.5 per cent a year. I have no idea what will happen next to cocoa farmers in west Africa, and my sticky fingers may get burnt, but I suspect current share prices will look cheap in future. Short-term volatility is baked in but so is the long-term craving for chocolate. • Full disclosure: Ian Cowie's shareholdings


BBC News
3 hours ago
- BBC News
Are we willing to drop cash Isas and take more risks with our money?
Savers are missing out on financial rewards because the benefits of investing in stocks and shares are being drowned out by risk warnings, the chancellor week Rachel Reeves said savers would be sent details of investment opportunities if they have money in low-interest accounts. And she won't completely rule out cutting the annual tax-free allowance of cash Individual Savings Accounts (Isas) to push people into stocks and shares Isas instead. But what are her chances of making the UK a nation of investors, rather than risk-averse savers?Experts say women are investing less than men, and have warned the chancellor that some of her ideas could backfire and put off potential new investors. 'Pink websites won't work' Cash savings accounts are steady and safe. The amount of interest varies between account providers, but it is clear how much the returns will be. They are popular when putting money aside for emergencies, or for holidays, a wedding or a contrast, the value of investments in stocks and shares can go up and down, but with risk can come reward. Long-term investments can be lucrative, not only for individuals, but for the economy as a Suter, director of personal finance at investment platform AJ Bell, says Reeves and the finance sector should start by making investing more attractive to written reports on the Isa gender gap, she argues that, for too long, advertising about investing has been designed by men. Lisa Caplan, director at investment company Charles Stanley, agrees. "It's not about making your website pink. It's about using less jargon, competitive language, and masculine imagery," she says."When clients who are women feel seen and understood, they will be more willing to trust their money to an adviser or even an investment platform. I think this is beginning to change." Jema Arnold is an investor, and works for UK shareholders' association ShareSoc. She wants investing to be part of general, honest conversation among friends, not private and hidden. "I go to a book club. I want investing to be like that," she is joined in a London cafe by Laura Colucci, who is in her 40s, and Wendy Lanham, who is 71. All three are divorcees, who were forced to think about their relationships with money when their marriages Arnold was with an investment banker for 17 years. "In many ways I was a traditional housewife," she says. Her now ex-wife had managed that side of the finances."I'd switched off that part of my brain when raising a daughter. That was a mistake. I felt foolish. I had to switch it back on again fairly quickly."Mrs Colucci was the same. "There were investments in my name," she says. "It was a huge learning curve in one year, when I had to take control."Mrs Lanham put her money into savings accounts. Only later did she consider moving some into that was a path that all three initially found difficult to join."People froze up and looked awkward when I talked about investing," says Mrs Arnold. Male domination Mrs Lanham says she joined a group which met to talk about investing. The membership was entirely male. "I bought myself a book called Investing for Idiots, went to a conference, and treated it like adult education," she says. "I did not know anything, but hung in there, and the organisation changed."Now, the trio are members of SIGnet – a network of investor groups that meet in different parts of the UK, or online. It is not-for-profit and covers different areas of interest. It has lots of female they say the chancellor will have little hope of getting more people to invest without initially improving their understanding, especially if they are trying it for the first time."There's no point telling people to go and run a marathon when they've never run before," says Mrs Colucci. Reeves told financial services and business bosses in her Mansion House speech this week that the "negative" narrative around savers investing money in stocks and shares needed to change."For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits," she announced new adverts, reminiscent of the "Tell Sid" campaign of the 1980s, which encouraged people to invest in the newly privatised British messages will also be sent by banks to people who have money in low-interest Suter, from AJ Bell, says this needs to go beyond a "token effort"."If it can get widespread coverage and enthusiasm, then it could make a difference," she says. Isa debate Carol Knight, chief executive of the Investing and Saving Alliance, says Reeves' ambition will be judged a success if more women, more people from ethnic minorities, and more people outside of London become investors. But Anna Bowes, savings expert at the Private Office, says the chancellor risks her plan backfiring by encouraging people to invest now when markets are jittery due to global uncertainty. That could lead to short-term losses."This needs to be done very carefully or it could put off a generation of investors."And she stresses that forcing people to consider a stocks and shares Isa by reducing the amount that could be put tax-free into a cash Isa would be a huge mistake. Reeves has stepped back from immediately cutting the tax-free limit on cash Isas, following a backlash from banks and building she is still keen to shift some of the £300bn in these accounts to being invested in the UK and its companies, despite "differing views on the right approach".Any changes would have an impact on millions of people. Isas are incredibly popular - about 42% of UK adults have at least and shares Isas are less popular but more money is held in them overall - around £431bn, compared to £294bn in cash with Isas are more likely to be older, with estimates suggesting about half of pensioners have one. And while more women have Isas overall, more men have the investment option, with women more likely to stick to the safety of investment companies that sell stocks and shares Isas back a change, while banks and building societies who dominate the cash Isa market are against debate is likely to pick up again as the chancellor's autumn Budget gets closer.