Lowes Magazine Issue 115

COMMENT

Staying positive WHEN THE CORONAVIRUS PANDEMIC FIRST impacted the UK, I think few of us expected it would be affecting our lives to this extent mid- year, let alone for much of 2020, as now looks likely. In more ways than one we are far from out of the woods as yet. The human impact has been devastating not just in the UK but across the globe and our thoughts remain with those who have lost family and friends wherever they are. Lockdown’s material effects on the economy mean the UK is now in a recession. How deep that will be will depend on the government’s ability to sustain the support schemes it has put in place and how quickly all businesses can return to some semblance of ‘normal’. Stockmarkets have partially recovered from their dramatic falls earlier in the year and portfolios are looking healthier than they were in the Spring. With nearly 50 years of investment experience, our advice to clients is hold firm and look long term with your investments. While not guaranteed, history shows the stockmarkets do recover over time. Should an unexpected spike in the number of infections occur then aside from the human impact, there will be further effects on both the economy and the stockmarkets. We must hope that does not happen but should it do so, then again, looking beyond the immediate impact on our portfolios will be essential. In his recent Summer Statement, Chancellor Rishi Sunak outlined measures aimed at helping to support the economy, much of which is being funded by government borrowing. Whilst currently it has capacity to do so, there is no doubt that the Chancellor will be looking at ways to help rebalance the books. Inflation can help government debt by reducing the percentage of total tax revenue required to service the debt, making it easier for governments to pay it off. But currently inflation is 0.6%, which is low from historical standards, and well below the Bank of England’s target of 2%. Other ways the Chancellor will look to redress the debt is through spending less – he has already announced a spending review – and, of course, through taxation. He has also commissioned the Office of Tax Simplification to review Capital Gains Tax (CGT), including the current reliefs, exemptions

and allowances. Come the November Budget, we can expect CGT rules will be changed – there may be other tax measures introduced also. Lowes Consultants and our technical teams will be keeping abreast of any measures and how they may affect our clients’ financial planning. Whilst we are impacted by many external factors at the moment, in this environment it is important that we stay positive. From the start of lockdown, Lowes has remained as operational as possible, helped by effective use of technology – we are now all used to conducting meetings via video-conferencing software. We have also been delighted to be able to assist clients with their technology queries, helping them stay in touch with loved ones and friends. Our offer of help remains open if you need it. Our spirits also have been lifted by once again being named Best Investment Adviser at the annual Money Marketing Awards. These are hard won awards and winning this award for a second year is a pleasure. We were particularly proud of the judges observation that: “Lowes combines the intimacy and client care of a small firm, with big firm efficiency and process.” I hope that you and your families remain safe and well.

Ian H Lowes, Managing Director

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