What's Happening in the World of Personal Finance?

Outlook for 2018

For 2017 the Brexit negotiations appeared to dominate all decision making. Despite this uncertainty, markets by and large remained calm and relatively stable. We would expect to see some reaction, and possibly a market correction, during the year ahead although the timing and extent of this is uncertain.

The first increase in interest rates for a decade occurred in November 2017 to maintain control of inflation. We hope that a further increase in interest rates should not prove necessary until the latter part of 2018 and, even then, it will be a modest one.

President Trump continues to astound and confound in equal measure. Despite this the US stock-market continues to perform strongly. It is unlikely that this can continue indefinitely and, once again, we would expect to see some correction in this later in the year. However with measures now in place for both Corporate and Personal Tax reform and steady economic growth we would hope that such a correction would be temporary.

Europe continues to offer investment opportunities in many areas but it remains to be seen how this will be accommodated alongside Brexit negotiations.

Japan continues with the Quantitative Easing cycle and this seems to be having some success, reflected in both (modest) inflation growth and stock-market performance.

Emerging Markets are forecast to grow by 5% in 2018, with growth in China declining but still reaching around 6%. The concern with the Emerging Market sector is that any significant correction in the USA markets could have a ripple effect, which may nullify any gains made here.

With the interest rate cycle at a turning point caution is required with fixed interest and many available funds are showing a preference for credit risk rather than interest rate risk. There are several equity funds that provide income comparable with and in excess of that offered by fixed interest funds at this time.


The ISA allowance remains unchanged at £20,000 for 2018/19 and provides a great opportunity to boost tax efficient savings. The restriction on the amount held within the cash component has been removed completely and there is also the ability to withdraw funds contributed in the current tax and replace them in the same tax year, giving greater flexibility. The move to allow ISA allowances to be transferred to a surviving spouse is also available to help mitigate tax.