MoneyWeek 1075

MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

United Kingdom
Dennis Publishing UK
51 Issues

in this issue

3 min
from the executive editor...

“Inflation is going to catapult a whole lot of us into higher tax bands in the coming years” Gordon Brown has a lot to answer for. As chancellor, he created the template for the “showbiz budget” – leak the big stories upfront to generate “buzz”; scatter the speech with small-scale bureaucratic interventions that sound good but don’t amount to much and talk abig game on fiscal responsibility while quietly hiking taxes and spending as much as you can get away with. Rishi Sunak, the Conservative chancellor, belongs to a nominally different party, but his latest budget was very much a Gordon Brown special. Fiscal rules that sound strict but depend entirely on how a government defines “investment”, and thus come with their own portable goal posts? Check. Fiddly little schemes that generate…

1 min
branding flop of the week

The mascot for the Cop26 summit in Glasgow should be “a symbol of the international effort to tackle climate change and leave the world in a better state for the next generation”, says The Daily Telegraph. So it’s hard to understand why Boris Johnson’s administration signed off on a “seal dressed in a blue cheerleading uniform and a Glasgow-themed bobble hat” at a cost to taxpayers of £1,645. To make matters worse, many in Whitehall think the figure, known as Bonnie, looks “more like a rat than a seal”, to the point where insiders have dubbed it “King of the Glasgow Rats” in a nod to recent outbreaks of vermin on local streets. Perhaps strangest of all is that Bonnie isn’t even new. She was created for the 2018 European…

1 min
good week for

The founder of Babylon Health – which provides the virtual GP service for the National Health Service – is worth $1bn after the firm listed on the New York Stock Exchange this week, says the Times. Ali Parsa, who set up Babylon Health eight years ago, has a stake of around 30% in the company, and stands to receive a further 38.8 million bonus shares if the share price doubles. The town of Fleetwood in Lancashire has received a £41.4m bequest from Doreen Lofthouse, the businesswoman who turned Fisherman’s Friend cough sweets into a global brand, says the BBC. Lofthouse, who died in March, was known as “the mother of Fleetwood” and she and her family – who still control the business – had given millions of pounds to community projects…

1 min
bad week for

Art-making robot Ai-Da (pictured) was detained by Egyptian customs for ten days on the way to an exhibition at the Great Pyramid of Giza, over fears that it could be part of an espionage plot, says Artnet. Images generated by the machine – which was created by Oxford art dealer Aiden Meller in February 2019 – have sold for a total of $1m. However, officials initially wanted to remove its modem and the cameras installed as its eyes. Ai-Da has now been released to take part in the show, which opens this week. Devon & Cornwall Police will pay £5,000 in compensation to a man who was wrongly arrested in July last year when trying to pay for petrol with a £100 commemorative coin, says the Daily Mail. Brett Chamberlain’s offer…

2 min
is the bank of england all bark, no bite?

Will Andrew Bailey prove a more “reliable boyfriend” than Mark Carney? asks Jill Treanor in The Sunday Times. During his time as Bank of England governor Carney gained a reputation for sending mixed signals about future interest-rate changes, causing one MP to liken him to an “unreliable boyfriend”. Now Bailey, his successor, is the one making promises. This month he said that the Bank “will have to act” on rising inflation. Investors have taken him at his word. Markets are pricing in an interest rate hike from 0.1% now to 0.25% before the end of the year. They then expect rates to rise to 1% by next summer. Bond markets wobble Short-term government bond yields, which are “highly sensitive to expectations for interest rates”, have leapt as prices have fallen, say Tommy Stubbington…

1 min
the gamestop frenzy: what really happened

A new report from America’s Securities and Exchange Commission (SEC) casts doubt on the popular David-versus-Goliath account of January’s GameStop saga, says Declan Harty on Fortune. The story goes that ordinary investors teamed up against Wall Street short sellers, sending the share price of struggling videogame retailer GameStop soaring by 2,700%. The frenzy around GameStop and other “meme stocks” such as AMC Entertainment was supposedly driven by retail investors co-ordinating on internet forums such as Reddit. Massive buying from ordinary investors forced hedge funds that were shorting the stock – betting that its price would fall – to instead buy it to limit losses, driving the price even higher. But the report finds that this “short squeeze” was not the main cause of GameStop’s soaring share price; instead, it was the overall…