Lost years, dance floors and Stinking Bishop

Are you ready for a ‘Killer Coffee’ with Dafferns?

Skip, sprint or start/stop

With sticky service sector inflation and a flatlining economy, the BoE may well have blotted its copybook by being seen to allow a technical recession last year. Overall, inflation is falling but genuine growth is proving elusive, lost years are a problem, Chancellors can’t grow their way out of spending pledges. 

The BoE inflationary path may be 2%, 2.5% or 3%, but with a national insurance cut, state pension up, a big minimum wage increase (reasons to be cheerful even if many thresholds have been frozen) delivering the lowest personal tax rate since we voted to join the ‘common market’, we may see a revision or two in the figures yet, especially off the back of higher than expected government borrowing.

Whilst Governor Bailey is out and about telling us all is good, for the markets it’s been a dramatic 3 weeks, with a 0.5% up-swing in expectations. At the beginning of the year forecasters thought 6 base rate cuts, a month ago that had dropped to 4, today we are looking at a modest easing back on rates with less than 2 quarter point cuts in the pipeline. 

So what to expect – base rate cuts skip a meeting, sprint too low, or start/stop to take in the view – in the north east twang of Marcus Bentley, ‘you decide’.

Basta ya

Can, road, kick: 25% re-mortgages extended to 30-year terms to keep payments manageable, with 1 in 5 of us baffled by how a mortgage works – stamp duty is something you lick and 25% of those polled don’t know the difference between fixed rate or interest only loans. Being a homeowner is a labour of love (especially when the Iron Lady gave you the right to buy), even with 5,146 mortgage products available, don’t expect a 5-year fixed rate at 1.86% anytime soon.

Despite this, homes have become more affordable, as the average house price is now 8.3 times the average salary unless you are forty and filthy rich; now the average age of mansion buyers who prefer dancefloors to drawing rooms. Otherwise, UK housing stock is oldest amongst our European neighbours and has less floorspace per person than most.

For those homeowners seeking a Place in the Sun, Jasmine has 1782 properties for sale across the Canary Islands,albeit tourism tensions are heating up with islanders chanting “Basta ya” “Enough is enough!” What will we do if we can’t escape England’s green and (wet) pleasant lands? 

Turophile Truss

49 days to make a mess… In true ‘Have I got news for you’ style; add, take away and jumble up the letters and you get ‘Ten years to save the West Liz Truss’ (Marvellous/maladroit – delete as applicable) memoir. 

In an era of ‘faltering conservatism’ Truss points out that there is ‘no smooth way to achieve the change the country and the wider West needs’. The truth is, there may well be ministers out there who understand the reform needed, they just don’t know how to get re-elected if they go ahead with the reforms really needed.

Ms Truss claims to be the only conservative in the room. If the polls are anything to go by, Rishi and team are on course to surpass the Conservative 1906 election defeat and secure less than 100 seats off the lowest poll rating since the ‘winter of discontent’ (1978), which left an odour not-dislike slightly nutty Stinking Bishop.

Killer coffee

As a nation of recyclable cup holders, climate change has sent the cost of arabica beans north and the price of a medium latte (extra hot!) up by 30%. Coventry’s very own independent ‘Baxter Baristas’ has raised the price by 30p in the past year, the biggest increase for 16 years. Let’s be honest we don’t just go for coffee, it’s the social ambience, they are our ‘third place’ alongside work and home – worth an extra 30p I reckon.

But for the ultimate killer coffee, head to Mayfair coffee emporium ‘Shot’ and sample the exquisite, Japanese ‘typica’ bean available as an expresso, cappuccino or latte for an eye ‘barista-ring’ £265 a cup!

Killer coffees are a great way to unearth those burning business challenges, check out Martin Gibbs’ guide to the Killer Coffee.

Simon Cossey is Dafferns’ Business Development Consultant and part of our Strategic Advisory team.