Worldwide Financial Planning

I covered the most cost-efficient way to buy a car in this column a couple of months back, and it’s quite apt that the appeal courts have just sided with consumers over the secret car loan commissions, a ruling which may rock some financial institutions further than some may think.

The update from the IMF is rare good news for the Treasury as it gets ready for next week’s Budget. The government appears to have overdone its efforts to pave the way for spending cuts and tax rises.

At the beginning of this rate rise, we were clear they wouldn’t rocket as the mainstream press said, and we explained that in this column. They haven’t. In conversations we are having with borrowers it’s clear that fear has stuck, so let’s look at the facts again.

The FOMC meeting came off the back of a decent CPI print. May’s inflation data came in softer than consensus expectations with headline CPI decelerating slightly to 3.3% versus 3.4% in April.

In monthly terms, CPI was 0.3% (consensus: 0.1%), compared to 0.6% in March. Similarly, core CPI inflation (ex-energy, food, alcohol and tobacco) came in at 3.9% (consensus: 3.6%) vs 4.2% in March.

An end to the interest rate hiking cycle would be welcomed by US consumers, who have seen new US mortgage rates spend four weeks above 7% for just the third time this century. Despite this, new home loan applications increased by 2.3% in the week ending August 25.