Quicker than expected?
In his latest report to the Treasury Select Committee, the Governor of the Bank of England Mark Carney has highlighted that, since November, the prospect of a greater degree of excess demand over their forecast period and the expectation that inflation would remain above the target have further diminished. The report highlights the need to therefore to set monetary policy so that inflation returns sustainably to its target at a more conventional level.
As a consequence, the Monetary Policy Committee (MPC) has judged that, were the economy to evolve broadly in line with their February Inflation Report projections, monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than anticipated at the time of the November Report. This suggests a bank base rate rise sooner than originally predicted but still a gradual rise as stated in earlier statements.
At its February policy meeting, all members thought that the current policy stance remained appropriate to balance the demands of the MPC’s remit. The outlook for growth and inflation was likely to require some ongoing withdrawal of monetary stimulus and there is still the commitment that any future increases in Bank Rate would be at a gradual pace and to a limited extent. The Committee will monitor closely the incoming evidence on the evolving economic outlook, and stands ready to respond to developments as they unfold to ensure a sustainable return of inflation to the 2% target.
Spend it before it’s too late
The paper £10 note featuring Charles Darwin will be withdrawn at 23:59 on Thursday 1 March. The Bank of England are encouraging anyone who still has any to use them in the next week. Over 73% of £10 notes in circulation are polymer, but there are still around 211 million paper £10 notes left in circulation. Put end to end, that’s enough notes to retrace almost half of Darwin’s journey on HMS Beagle. Or, these would weigh the same as nearly two thousand giant Galápagos tortoises that Darwin saw on his travels.
After 1 March 2018, the new polymer note featuring Jane Austen will be the only £10 note with legal tender status. Some banks and building societies may accept paper £10 notes after 1 March but this is at their own discretion. Most retailers will no longer accept the paper £10 note as payment. The Bank of England will continue to exchange Darwin £10 notes for all time, as it would for any other Bank of England note which no longer has legal tender status.
Making the Move
According to new research from Aldermore, almost three in 10 (29%) British workers, the equivalent of nine million people, plan to make the ambitious move to become self- 2 employed in the future. Compared to research conducted last year, this is an increase of five million British workers, as only four million (15%) planned to make the move 12 months ago. Of those who aspire to become self-employed, over one in six (18%) intend to make the move in the next year, while for a further 28% it will take three years.
When exploring what type of business aspiring entrepreneurs want to start, one in seven (15%) would launch in the retail sector. This is closely followed by the catering and accommodation industry for just over one in 10 (11%). Making the transition to self-employed can be a risky life decision, but the research shows that the ambition is paying off for those that have already made the move. Over half (51%) of those self-employed have been able to earn more money than in their previous job, and almost three in 10 (29%) expect their revenues to increase in the next 12 months. Across the UK, the self-employed based in London are some of the most confident about revenue growth with over a third (35%) expecting to see an increase, followed by almost a third (32%) in the North West. The political and economic uncertainties don’t seem to be a concern, with over half (53%) saying Brexit negotiations will have little impact on their business.
Although the research has revealed that seven in 10 (70%) self-employed believe they made the move at the right time, they also highlight there were a lot of factors to consider when deciding to make the transition, with financial fears causing the most concern. Over four in 10 (44%) were worried about not having a regular source of income, and almost two fifths (38%) were worried about an irregular volume of work. These concerns are proven; half (50%) of those already self-employed have experienced irregular income and two fifths (40%) have had to deal with inconsistent cash flow. Other difficulties encountered by the self-employed are late payments from clients (37%), as well as a lack of free time (21%). Despite these challenges, almost all (93%) have said they enjoy being their own boss. Aside from the challenges of running their own business, the self-employed have cited difficulties trying to secure a mortgage. When asked about the mortgage process, seven in 10 (70%) believe it is harder for those who are self-employed to secure a mortgage. A major challenge the self-employed face is having enough evidence to verify their income; seven in 10 (70%) believe this is a problem, and over half (56%) feel lenders are less understanding of the circumstances of the self-employed.
Lifestyle leading to a reduction by 4
Research from VitalityHealth has identified a significant longevity challenge facing the UK, with life expectancy being reduced by more than four years, predominantly due to individuals’ poor lifestyle choices.
This research is based on analysis of people’s long term health using VitalityHealth’s Vitality Age algorithm. Vitality Age measures the impact of lifestyle, clinical and mental health factors on a person’s life expectancy. The disparity between Vitality Age and chronological age – termed the Vitality Age Gap – describes the number of years that an individual could expect to lose, or gain, in life expectancy as a result of their lifestyle choices and other risk factors. Importantly, the issue of longevity and reduced life expectancy is not confined to old ages. In order to assess the impact of poor lifestyle choices and other risk factors on mortality risk amongst the working age population, VitalityHealth has analysed the Vitality Ages of UK employees undertaking its Britain’s Healthiest Workplace study.
In the 2017 study, 88% of employees had a Vitality Age greater than their chronological age, with 10% having a Vitality Age Gap of 10 or more years older than their chronological age, meaning their life expectancy is drastically reduced. This drastic reduction in life expectancy means that many people can be expected to die before reaching retirement, and the increased risk of premature death has ramifications for employers and the general economy. Based on these findings, VitalityHealth estimates that the UK will see approximately 30,000 deaths each year among the working age population driven primarily by lifestyle health factors. When projected over a 10-year period, this equates to over 4 million working years lost, translating into a £125bn cost to the UK economy. Additionally, these figures do not reflect the full cost and impact for employers, who are faced with the need to recruit and train a replacement to overcome the loss of an experienced employee.
Gigging in the UK
Over a third (36%) of gig workers aged 55 and over take on ‘gig’ jobs to help them ease their way into retirement, according to new research from Zurich UK. Published within Zurich UK’s ‘Restless Worklife’ report – based on UK-wide analysis from YouGov of over 4,200 adults, of which 603 were gig workers – the research found that the same amount (36%) said flexibility and being able to choose the work they take on was the main attraction. In fact, over one in ten of all gig workers questioned only expect to stop gig work when they are over the age of 75, almost ten years after passing State Pension age.
The number of workers over the age of 50 has grown significantly over the past few decades, with government figures showing the employment rate for people aged 50 to 64 has grown from 55.4 to 69.6 per cent over the past 30 years.
However, the gig economy itself has attracted its fair share of criticism, with little job security or access to workplace benefits given most are not defined as full-time employees. Lack of workplace benefits such as income protection, holiday and sick pay was put forward by 44% of gig workers over the age of 55 as the main drawback, while over a third (34%) said it was not knowing where their next paycheck would come from and 27% said it was not having access to a workplace pension.