Navigating a high inflation economy
With rising inflation currently marking the UK economy, various challenges such as decreased purchasing power, erosion of savings, increased investment uncertainty, and higher interest rates on loans come to front of mind.
Given the UK’s consistent experience of growing inflation rates compared to other G7 nations, it becomes important to acquire a comprehensive understanding of available opportunities, associated risks, and strategic approaches for effectively navigating this period of economic uncertainty.
In our recent webinar, our expert panel of financial planners, mortgage advisers, as well as Schroders economist George Brown, together discussed various areas people are considering within the current economic backdrop for personal and business finances, as well as mortgages. Below are their top tips from the session.
Top tips for navigating a high inflation economy
- Inflation has fallen sharply, but it looks set to settle at higher rates than we have become accustomed to in recent decades.
- Because of the higher rates of inflation, interest rates won’t be returning to the ultra-low rates we witnessed in the aftermath of the global financial crisis.
- Buckle up for asset volatility and populist politics as the global economy undergoes a disorderly return to the old normal.
- Have a plan for the future: don’t take any more risk than you need to, but understand the risk of inflation. Think long term, not short term.
- You can shop around the different banks but it is a chore keeping up with all the rates – a better option may be to use a cash management service.
Mortgages
- Secure your mortgage six months before your current products end date.
- Look at the ‘whole of market’ to find a cheaper mortgage, not just the products from your current lender.
- Consider an offset mortgage. Maintaining liquidity while putting the money to work by tax efficiently reducing mortgage payments.
Contact us if you would like more information on how to navigate a high inflation economy.