Weekly Client Update – 22nd December

A Christmas Message

As we approach the festive season, we extend our warmest wishes to you and your loved ones.

We would also like to take this opportunity to express our gratitude for your continued support throughout the year.  We are excited that your feedback has been instrumental in shaping our future communications. In response to your valuable input, this will be the last weekly newsletter of the year. Starting from the first week of February, we will be transitioning to monthly newsletters. This change is part of our commitment to delivering enhanced content which we hope aligns with your expectations. We are dedicated to providing more in-depth articles on financial well-being, offering fresh and rich insights that we believe will further enhance your understanding of the financial landscape.

Thank you for being an integral part of our business. We look forward to continuing to support you in all aspects of your financial journey and hope that we can help you to live the life you want to lead.

Wishing you a festive holiday season and a prosperous and Happy New Year!

Kind Regards,

The Advisa Wealth Team

 

Markets Overview

UK markets: At 0840 GMT, the FTSE 100 was down 0.1% at 7,684.06 – London stocks edged lower in early trade on Friday as a downward revision to UK GDP data raised the risk of recession, although retail sales figures were better than expected. Markets will be open for just a half day’s trading as we head towards a four-day Christmas break.

European markets: European stocks opened modestly lower open Friday, extending losses even after U.S. stocks strongly rebounded from their worst session in months. The Stoxx 600

index was down 0.16% at 8:10 a.m. in London, as the technology sector dropped 1.4%. Oil and gas stocks climbed 0.5%, as markets continue to digest news that Angola is quitting the OPEC alliance.

US markets: All three major U.S. indexes closed higher Thursday, and were back on track for an eighth straight week of gains. The S&P 500 fell 1.5% Wednesday in its biggest one-day percentage drop since September. But markets have mostly ripped higher to end the year, so that selloff is looking more like a blip. As of Thursday’s close the S&P 500 gained 1% and the Nasdaq Composite advanced 1.3%. The Dow Jones Industrial Average rose more than 300 points, or 0.9%.

Asian markets: Bangkok’s SET slipped 0.2% and the Sensex in Mumbai was up 0.2%. Hong Kong-traded shares of Netease and Tencent plunged after China released new regulations for online gaming, helping pull the benchmark Hang Seng index down 1.7% to 16,340.41. Japan’s Nikkei 225 fell 1.76% to close at 32858.31 after leading gains in Asia on Wednesday while the Topix slid 1.14% to 2359.91.

 

UK inflation falls to 3.9% in November

UK inflation slowed sharply in November to 3.9 per cent, triggering a slide in the pound, a stock market rally and increased expectations of an interest-rate cut early next year. Wednesday’s number was well below the 4.4 per cent year-on-year increase in consumer prices predicted by economists in a Reuters poll, as inflation was tugged lower by petrol, food and leisure. The 3.9 per cent figure was also the lowest inflation rate since September 2021, according to the Office for National Statistics data, fuelling speculation about when the Bank of England will reduce interest rates from their 15-year high. The November data — the first time food inflation has been in single digits since June 2022 — will bolster Prime Minister Rishi Sunak, who has vowed to bring prices under control ahead of the election expected next year. Samuel Tombs, economist at the consultancy Pantheon Macroeconomics, said the “surprisingly sharp fall” in consumer price inflation made it more likely that the BoE would cut rates in the first half of 2024, “far earlier than it has been prepared to signal so far”.

Markets now fully expect a 0.25 percentage point cut by May and anticipate that rates will fall by 1.38 percentage points over the course of next year — compared with expectations last Friday of a 1.07 percentage point decline. The pound fell by 0.5 per cent against the dollar to $1.266. The FTSE 100 initially rose to its highest point since May, and closed up 1 per cent, while government bonds also rallied. The yield on rate-sensitive two-year gilts, which moves inversely to price, dropped 0.19 percentage points to 4.1 per cent, the lowest since late May. Tombs added that consumer price inflation now looked set to fall “far more quickly” than the BoE’s Monetary Policy Committee predicted last month. Core inflation, which excludes energy and food prices, was 5.1 per cent in the year to November, compared with 5.7 per cent in the previous month, the ONS said. That was also comfortably below economists’ forecasts. The BoE voted this month to keep rates unchanged at 5.25 per cent, warning it was confronting more stubborn inflation than in the US and euro area. Headline CPI growth remains higher in the Uk than equivalents in the US and EU. The central bank has insisted it will not be rushed into lowering rates, as policymakers wait for conclusive evidence in the labour market that they have done enough to return inflation to its 2 per cent target. Seema Shah, chief global strategist at Principal Asset Management, said that market expectations of deep rate cuts next year looked “knee-jerk”, since the lower-than-anticipated figures amounted to “one data point and the BoE need a string of them”. She added that the BoE had been “unclear in its communications all year, very topsy turvy, and it’s created an unsettling environment for investors . . . The amount of swings in rate expectations is quite unbelievable”.

 

Teaching union narrowly accepts government pay offer

Members of one of the Island’s main teaching unions have narrowly accepted a pay deal from the government  Teachers from NASUWT voted by 52% for the States Employment Board’s offer, which would see their wages rise by 8% next year. Although the decision moves the year-long row between teachers and their employer closer to resolution, members of the other main teaching union, the NEU, have not accepted the offer. This leaves all teachers awaiting the conclusion of the dispute, with further talks between the NEU and the government unlikely to be scheduled until the new year after the school term finished on Tuesday. A 7.9% pay rise for 2023 has already been applied as part of the SEB’s offer, which would see an 8% increase applied from 1 January, a one-off payment of £1,000 on the same date and pay rises matching inflation for 2025 and 2026. Social Security Minister Elaine Millar, who is also the vice-chair of the States Employment Board, said: “We are pleased to hear that NASUWT members have voted to accept the 2024-26 pay deal. We will recommence constructive meetings with the National Education Union when the school holidays are over. ”NEU senior regional officer Caryn Symons said that the NASUWT’s ballot result “doesn’t change our position”. She added: “The majority of teachers remain in dispute. “We will discuss with our members and the executive committee in the new year about what the next steps will be.

 

Grants gifted to Islanders affected by Storm Ciarán

Dozens of families whose homes were severely damaged during Storm Ciarán have received much-needed financial support in the first round of funding following an emergency appeal. Thirty-eight households have been given a share of £72,104 from the Bailiff’s Appeal, launched to help the Island recover from the freak weather event which saw the Island hit by hurricane-strength winds and the strongest tornado recorded in the British Isles for nearly 70 years. A total of £165,000 has so far been raised, and further funds are set to be released in the New Year. Three people were injured and dozens of properties were severely damaged as the storm barrelled across the Channel Islands overnight on 1 November Some Islanders have still not been able to return home. In a statement, Anna Terry, chief executive of the Jersey Community Foundation, which monitored and managed the release of the funds, said: “We have been humbled by the applications to the Bailiff’s Fund for Storm Ciarán.“The storm’s impact was, and continues to be, very significant for families whose lives and homes have been displaced. We are grateful and proud of the philanthropic spirit shown by our community, including generous businesses and individuals who have offered financial support to those most affected by the storm. The applications have further illustrated the scope of the damage and the extent to which our community needs, and is grateful for, the Island’s philanthropic support. ”The grants, which were reviewed by a panel before being released, ranged from £500 to £5,000 and went towards replacing clothes and children’s toys to contributions towards repairing major structural damage.

 

Jersey gas outage: Island Energy’s insurance doesn’t cover customer compensation payouts

Island Energy’s insurance will not cover payments to customers who were left without gas for weeks, the utility company has confirmed – and Islanders will not know the details of any payout before the end of the year. The company said that payments would be considered “goodwill”, rather than compensation – and would have to come out of the firm’s own pockets rather than from its insurance a statement, an Island Energy spokesperson said: “We are still in the process of reviewing the effects of the supply disruption our customers experienced in October. One detail we have now confirmed with regards to our plans is that our insurance will not cover payments to customers“ This is because there are no pre-agreed or pre-planned conditions for payments to customers when disruption occurs, and therefore any payment would be classified as a goodwill payment and not compensation.” They added: “We are factoring this into our plans to understand the full impact to our business and will be able to provide more information to customers in the new year. We would ask that customers bear with us; we will inform them of our plans as soon as we are able. Thousands of Island Energy customers were left without gas from Saturday 7 October, and while some were reconnected from Friday 13 October, others still complained of being without gas three weeks later, with some left with no option but to take cold showers. Later in October, Island Energy chief executive Jo Cox said domestic customers were “likely” to receive automatic compensation, while commercial customers’ payouts would be considered on a “case-by-case basis”.

 

RNLI issues winter swim warning after Islander passed out and needed hospital treatment

The RNLI has warned of the “very real” risks of hypothermia posed by low sea temperatures after an Islander passed out following a cold-water swim and later needed hospital treatment. Gary McGurty, who collapsed on the beach at Beauport Bay, is also urging others to be aware of the symptoms and dangers of hypothermia when deciding to go for a dip in the sea this winter The 55-year-old said that he regularly visited the beach, having started cold-water swimming during the pandemic to help with back issues. However, earlier this month Mr McGurty swam in the sea while still recovering from a “really bad” cold – a decision he now regrets. He explained: “I thought the swim would help me to get over the last of it but it backfired on me. ”Mr McGurty swam for around ten minutes but, after emerging from the 12-degree water, he passed out. I didn’t know about hypothermia, or the symptoms. “I just went all dizzy, I felt sick, it was the strangest thing.”

Despite losing his balance and throwing up repeatedly, Mr McGurty managed to phone his wife Lee, who took him home. Once he got home, the Islander collapsed again and his wife called an ambulance to take him to the Hospital. He admitted: “I really thought it was curtains on that beach. If you’re not 100%, you shouldn’t get in there. “Be mindful about how you feel and don’t take it for granted that it’s going to be the same as your last swim. ”Helier de Veulle, RNLI Jersey press officer, said: “Whilst there are many health benefits to open-water swimming, we would always take the opportunity to remind the public that there are also some risks. “Around Jersey we obviously have to be aware of tides and currents, but it is easy to forget that at this time of year the water temperature is cold at below 12°C and so swimmers should acclimatise to the sea temperature. ”He added: “The risks of hypothermia are very real here, particularly outside the summer months, and so we advise swimmers to be aware of their limitations, swim in groups and make sure that they are fit and healthy before entering the water.”

 

Calls to make e-scooters legal in Jersey following crashes

Two serious collisions involving e-scooters have prompted calls for them to be legalised in Jersey so their use can be regulated. Sarah Highland, who was injured in May, has claimed e-scooters should be subject to speed limits and other restrictions to protect road users. E-scooters are illegal to drive on Jersey’s roads. However, the government is considering including them in its future transport strategy. A spokesperson said they are watching trials in the UK. Sarah  Highfield suffered a fractured spine, a broken leg and bruising after a man riding a e-scooter collided with her on Patier Road while she was walking her dog. She said: “It was very difficult at the time, I had to have a lot of time off work… We’re not going to get rid of them now, a lot of people own them. “I think they are quite an ecologically-friendly way to get around, but I do think they need to be legalised and therefore regulated. “Safety measures need to be put in place to protect both riders and pedestrians, she added.  Over the past four years, five collisions involving e-scooters have been reported to the States of Jersey Police and they say there may have been more that went unreported. Insp Callum O’Connor said: “We continue to see several reports come into us around young people using these on the road, and sometimes with two people on one e-scooter, which is incredibly dangerous for all road-users involved. “Leading up to Christmas [we have] an important message; not legal, can only be used on private land. “There are plans to potentially include electric scooters in the island’s strategy for alternatives to cars, but it is a long-term aim. Carl Dodd from the government’s infrastructure department said they need to speak to “local stakeholders” and present a “couple of options to the States”. It’s really important that we get the balance right in how we legalise them,” he said He added: “There is going to be a bit of time to get this right and think it through”.

 

Voucher scheme to help families in need returns

A campaign that offers £50 vouchers for food or fuel has been relaunched to help Jersey families who face the “dire choice between heating and eating” over the Christmas period. Caring Cooks of Jersey first launched the Food or Fuel scheme last year and distributed 870 vouchers to families in need. It is to run again from this month until the end of April 2024. The charity – which strives to teach children and their families about the importance of nutrition and cooking wholesome meals – hopes to surpass the number of vouchers distributed last year to ensure that an even greater number of families receive support. The vouchers are redeemable at all Coop stores, Jersey Electricity, or Island Energy. Yvonne Corbin, chief executive of Caring Cooks, said: “As we face rising challenges, particularly during the colder months and heightened Christmas period, our Food or Fuel campaign provides critical support to Jersey families “This initiative addresses the dire choice between heating and eating. Our organisation’s commitment to distributing vouchers intends to lessen this burden.” Community, businesses and philanthropists are invited to support the campaign by contacting the charity’s chief executive. Jersey Electricity announced earlier this year that a 12% price increase would take effect from 1 January. The hike, which follows multiple rises implemented over the last 12 months, will add around £3 per week to the average annual domestic electricity bill of approximately £1,200.

 

Free bus journeys on Christmas Eve

Islanders will be able to get the bus for free on Christmas Eve. Liberty Bus has said that for the first time ever, all bus journeys on 24 December will be “absolutely free of charge”, to help Islanders “connect” and do last-minute Christmas shopping, while also “bolstering the local retail and hospitality sectors”. The company’s director, Kevin Hart, said: “Christmas is a time for coming together and creating memories with loved ones. By offering free bus journeys on Christmas Eve, we hope to make it easier for everyone to connect on the day “We encourage the community to use sustainable transport options and reduce the environmental impact while enjoying the festivities. ”He added: “Liberty Bus remains committed to supporting sustainable transportation solutions, and this initiative aligns with their ongoing efforts to promote eco-friendly practices within the community. “By providing complimentary bus journeys, LibertyBus aims to reduce the reliance on individual vehicles, contributing to a more environmentally conscious and enjoyable Christmas experience for all.” LibertyBus will be running a Sunday service on 24 December, with the last buses from town due to depart at or before 9pm.

 

Merry Christmas and a happy New Year!

We would like to inform you that this is our final newsletter of the year and we will be refreshing and changing our newsletter service from weekly to monthly starting at the end of January 2024.  Please note that our office will be closed from 1pm Friday 22 December until 9am Tuesday 2nd January for the holiday period. The Advisa Team would like to thank our clients for your continued support and wish you all a very Merry Christmas and a Happy New Year.