Schools finally look set to welcome back children in September, while markets will also be ending their summer hiatus (albeit from staycations only for many investors this year).
The latter should be braced for a flurry of activity this coming month as the extraordinary measures taken by the government – including the extension of the furlough taper (for now) – the government has several issues to deal with.
First on the agenda is the coming of age of the very first Child Trust Funds (CTFs) as swathes of holders start turning 18 from 1 September onwards. It could perhaps be coming at no worse time than in the middle of a never-before-seen health, economic and financial crisis.
Teenagers up and down the land will be smarting from the A level results fiasco. Those who failed to secure university places, or did not wish to, will now be faced with a ferociously tough jobs market while simultaneously receiving a financial windfall. One can only hope sensible decisions will be made and, dare I say it, the government offers some sort of constructive advice.
We’re also set for St. Leger’s Day on 12 September. The old adage refers to aristocrats, bankers and merchants who would leave the City of London for summer and return in time for the St Leger’s Day race. Fortunately, the race is – at the time of writing – going ahead this year. But it would seem, with all the activity over summer, St Leger’s may just not matter too much as far as markets are concerned. Judging by the S&P 500 erasing all its losses, some investors will be fuming if they ended up following that time-worn tip.
On 15 September, the latest employment figures will give us further insight into the state of the jobs market as the furlough tapers. Most experts are worried that the positive signs of growth we’ve had will be sandbagged as unemployment rockets. Ultimately consumption drives the UK economy, and the less people who have incomes, the less they can spend.
On the 16 September, we have the latest inflation figures. Like August’s set of data, September’s numbers carry extra weight, as these figures will help us decide by how much the State Pension is uprated by.
The new State Pension uplift is decided every year by the higher of three figures: wage growth, inflation, or 2.5%. It is fairly well recognised this deal was a giveaway that never should have happened. Theresa May even attempted to downgrade it to a double lock in her failed 2017 election manifesto.
The whole issue has simmered on, booted into the long grass by politicians reliant on older people to vote for them or unwilling to seem like they’re harming the elderly (the BBC is learning what that feels like after the free TV licence for over 75s was scrapped).
Coronavirus has been a year of change though. The triple lock is woefully unfair to a working-age population that has experienced years of stagnant wage growth, so could this moment be the cataclysm that brings change?
Either way, wages aren’t just sluggish – they’re actively decreasing, so handing a 2.5% pay rise to pensioners (who are portrayed in the media as vulnerable but as a cohort typically hold more wealth than any other age group in the UK) could further fan the flames of resentment towards the government.
Elsewhere in the month we have the latest interest rates decision from the Bank of England on 17 September. Talk of negative rates goes on but whether we are there yet is unclear. Meanwhile, on 8 September an FCA consultation on how to help so-called mortgage prisoners closes.
August turned out to be quite a busy month, particularly on the political front. I wouldn’t expect any less from September. As ever, all the best from us here at MRM and CCM.