Brian’s Brainstorm

After the Rate Hike: Nothing Has Changed

This month saw the first interest rate rise in a decade.  But nothing has  changed.  The reward for leaving your money on deposit in a bank or building society is still very unattractive.  And the message of the last ten years remains the same: only by taking calculated risks can you have a hope of retaining or increasing the purchasing power of a capital sum.

Before the financial crisis of 2008 the interest you earned from a bank or building society deposit account more than kept pace with inflation; so your spending power in the future would not diminish.  It follows that it was not imperative to seek advice to invest in riskier instruments like equities and bonds.

Ten years ago you could earn nearly 5 per cent annual interest in a building society account.  Although inflation was 4 per cent back then; at least spending power was preserved.

Life for the cash investor was even easier in the 1980s.  In 1986 you could earn nearly 10 per cent a year from your building society account while inflation was running at less than 4 per cent.  So there was no need to need to worry about the stock market if you were virtually guaranteed a 6 per cent real return.

But for the last ten years, leaving your money in the bank has delivered a sharp erosion in your real purchasing power.  If you had deposited £1,000 in a bank or building society account five years ago; the sum total in your account now would be less than £1,020.  With these returns it really makes sense to seek guidance to invest in other financial instruments.

If you were of a cautious disposition and invested in gilts; your capital sum would have grown to £1,200. A more adventurous investment in the UK stock market would have produced a nest egg of £1,600.

Now obviously these alternatives are more risky than leaving cash in the bank but the days of leaving your money at the high street in the expectation of preserving your spending power are still long gone.

Brian Durrant

Staff Matters

  • Since the summer, a number of our team here at Conçerva have been busy continuing their professional development by preparing for and sitting exams.
  • Our former apprentice, Adam Robinson, has passed his first exam since joining and we are sure he is already looking forward to his next one…
  • We would also like to welcome Lauren Emmett and Liam Taylor who are our latest staff additions at Conçerva.
  • Liam joined us back in July as a member of our paraplanning team and has has a wealth of knowledge of the industry having been involved since his graduation.
  • We have extended the team further with Lauren signing on as our new apprentice.

Save the Date

With our annual day of events with Seven Investment Management a little under a month away, we would like to take this opportunity to let everyone know that there are only a handful of spaces left.

Please get in touch with Ian Bromley as soon as possible to reserve one of the few remaining spots.

Statistical Information

Last Month This Month Change
CPI 2.9% 3.0% +0.1%
RPI 3.9% 3.9% +0.0%


The latest inflation figures released by the Office for National Statistics (ONS) for September saw the Consumer Prices Index (CPI) reach its highest point since April 2012.

Prices across all categories monitored by the ONS were higher in September 2017 than this time a year ago, however both the food and non-alcoholic beverage sector and the recreation and culture sector had the most significant upward effect on inflation.

UK Consumer Price Inflation

Sep 2017 Nov 2017 Change
Base Rate 0.25% 0.50% 0.25%


It has been a little over a year since the Monetary Policy Committee (MPC) dropped the Bank of England Base Rate to 0.25% in the face of post Brexit vote uncertainty. Despite the economic turbulence caused by this event, unemployment has fallen to record lows and inflation has been rising since October 2016 placing pressure on the MPC to act.

The last meeting saw a 7-2 vote in favour of raising the Base rate back to 0.5%. Early indications show that further rate rises are expected but not in the short term.

The MPC is next due to meet on 14th December.