According to the Financial Conduct Authority, over 40% of UK adults have savings of more than £10,000. This is reassuring but it seems a great deal of it is not invested.

Indeed, Barclays Bank estimates that 13 million UK adults hold £430bn in cash deposits.

Cash can be a good place to park savings for the short term, as the returns are not subject to the volatility experienced by investment markets. However, extending the time savings are kept in cash and not investing in asset classes like equities and bonds means potentially missing out on generating real returns to enable spending power to exceed the rate of inflation over the long term.

The gap between cash and investing is exacerbated at the moment by the fact interest rates have started falling, and we believe stock markets in the UK and internationally are offering attractive valuations.

There is hope the Budget on 30 October will deliver the catalysts required for investors in UK-listed companies to realise their attractive valuation opportunities

This latter point may seem surprising given the fact the US S&P500 index reached yet another new all-time high at the end of September.

Yet it is important to remember the US stock market has been driven to current levels in large part by a handful of mega caps, including Nvidia and Apple, which have benefited from the fever-like excitement around AI.

The market environment is changing, however. Revenues that have been delivered by US mega and large caps are spreading beyond these stocks, not only in the US but also in international markets. This is at a time when cheaper valuations are available outside large caps.

Our optimism about the outlook and valuations is demonstrated by the fact our team currently has a tactical score of four out of a maximum of five for equity markets in general. But not all equity markets are equal, and some offer greater value than others.

For the last time we saw this concentration in the S&P500, you have to go back to the Great Depression

The table below shows that, on a price to earnings (PE) and price to book (PB) basis, the UK offers the most value, with ratios of 12.2 and 1.9 respectively.

Expectations were raised when the Labour government won a large electoral majority in the summer, with a commitment to economic growth. There is hope the Budget on 30 October will deliver the catalysts required for investors in UK-listed companies to realise their attractive valuation opportunities.

Valuations in global equity markets

Source: Bloomberg/Liontrust, 02 October 2024; *External (hard currency) debt

Over the last two to three years, China’s slowing economic growth and trade tensions with the US have weighed on emerging markets (EMs).

We believe there are several reasons why EMs may now be more attractive. China’s central bank recently announced a new wave of monetary stimulus and EMs could benefit from the relative appreciation of their own currencies versus a potentially weakening dollar following the US Federal Reserve’s recent half-point interest-rate cut.

EM countries tend to borrow in US dollars, so a weaker greenback makes it easier for them and their companies to service their debts.

Barclays Bank estimates that 13 million UK adults hold £430bn in cash deposits

While US-China relations remain complicated, the reorganisation of strategic supply chains could create new opportunities for EMs other than China.

Two of the most expensive markets are the US and Japan after enjoying strong performance over the past couple of years despite the pullback in early August. However, while we are neutral on US equities from a tactical view, we do have a positive score of four out of five for US smaller companies and are bullish on the Japanese market, including smaller companies.

The fact Japan is in an inflationary environment for the first time in a couple of decades should encourage more consumption and, together with an improving corporate picture after years of underperformance, gives us a positive view of the outlook for the stock market.

If, as we believe, the concentration in equity markets of the mega caps in the US lessens over time and revenues and share prices broaden beyond them, then it is important to consider what the relative impact will be on active managers and passive vehicles within portfolios.

We believe there are several reasons why EMs may now be more attractive

If you take the US, which is the biggest passive market, the top 10 holdings in the S&P index represent around a third of the whole index. For the last time we saw this concentration in the S&P500, according to one of our US fund managers, you have to go back to the Great Depression.

The market conditions back then were entirely different to what we have today and we do not believe all the growth comes from just a few stocks.

While passive vehicles have certainly helped us over the years in terms of a broader universe of options to use within portfolios, there is a big opportunity now for active management, particularly in mid and small caps, and for savings to work harder for investors than keeping them in cash.

John Husselbee is head of the Liontrust multi-asset team

Youth centres were closed long ago. Then libraries and bus services felt the squeeze. Now, in the southern English county of Hampshire, highway maintenance is being cut, street lighting rationed and the “lollipop” ladies and men who protect schoolchildren from traffic will soon be a thing of the past.

Although it runs a relatively prosperous area, Hampshire’s Conservative-led council, like most local authorities in England, is facing an attritional fight against insolvency as the rising cost of child and adult social care — which it is legally bound to provide — swallows up funding for everything else.  

The death rattle for other services was sounding this month as the council cabinet met in Winchester to vote on savings towards bridging next year’s shortfalls.

Unison, the union, last month forecast that Hampshire’s budget deficit would be the biggest in the country in 2025-26, at £132mn against a revenue budget of £1.2bn, though other local authorities are worse off in proportion to their revenue.

The council has since increased its forecast deficit to £175mn because demand and costs have continued “to rise more than anticipated in children’s and adults’ social care, special educational needs and school transport”.

“We are not at the cliff edge yet. Others will go over first, but there is a big weight dragging us towards it,” said council leader Nick Adams-King.

When the Conservatives were voted out in Westminster elections in July after 14 years, they left England’s 317 councils in varying degrees of financial distress.

Grants from central to local government were down more than a third in real terms compared with 2010. Meanwhile, ministers repeatedly postponed tough decisions on the way social care is funded, council tax set and finances distributed around the country.

Eight councils have gone bust since 2018, and this year an unprecedented 18 are receiving emergency financial assistance. This comes in the form of capitalisation directions — local government speak for life support — when Westminster allows councils to flog assets and use other capital resources to pay for day-to-day spending.

In the meeting Adams-King chaired, the cabinet had little choice but to vote for more cuts. Services for homelessness, which is at all-time highs nationally, were spared. But waste recycling centres, libraries, highway maintenance, school traffic controllers, cultural and community grants, street lighting and winter services such as gritting roads will all be sliced.

“The cost pressures from statutory services are so high that even this may not be enough to get the budget to balance on a sustainable basis,” Adams-King wrote in a despairing letter to Rachel Reeves later in the week.

With the chancellor painting a dismal fiscal picture ahead of the Budget on October 30, local authorities, which meet in Harrogate for their annual conference this week, are not expecting much of a rescue package.

The one measure the government has promised is longer-term funding settlements to give councils more time to plan. The Treasury declined to comment on Budget speculation but the Ministry of Housing, Communities and Local Government said longer-term financial arrangements would provide “greater stability” and help end “competitive bidding processes for pots of funding”.

Local officials have welcomed that pledge, but warn that much more is needed.

Noting that the cuts agreed in Hampshire would only get the council halfway towards balancing the budget next year — with the rest having to be drawn from reserves — Adams-King implored Reeves to prioritise reforming local government finance if vital services were to survive.

Keith House, Liberal Democrat opposition leader on the council, said the same. “This government might get away with it, for another year, giving some pots of money for those councils going under,” he said. But without a more radical fix Labour would preside over an accelerating number of bankruptcies beyond 2025-26, he added.

The Local Government Association has called on Reeves to deliver a “sustained increase in overall funding that reflects current and future demands for services” and that bridges the £6.5bn black hole it forecasts across all councils to 2027.

In the longer term, the representative body wants government to stop dictating where grants are spent, and to carry out a “fair funding review” promised since 2016 on where they are allocated.

Among more radical ideas, the cross-party think-tank Demos will this month propose in a paper that councils be stripped of responsibility for adult and social care and homelessness. Under its plans, these would be organised under devolved regional trusts — similar to the NHS, but with financial risk borne at the central government level where resources can be pooled.

Andrew O’Brien, policy director at Demos, said such a change would end the “fiscal fiction” that made local government legally responsible for delivering social care and a host of other services but left it dependent on Whitehall to do so, and on resources that were rarely matched to geographic demand.   

“Just restoring central government grants isn’t going to fix the system,” he said. “One solution is to take financial responsibility for adult and child social care and homelessness away from local authorities”, allowing them space to focus on other neglected roles.

Across all local authorities, spending on adult and child social care has increased from 53 per cent of expenditure in 2009-10 to 66 per cent in 2022-23, according to Demos.

In Hampshire, which is among the top four counties in terms of concentration of wealth, the figures are starker still: funding to the council from Westminster is down 46 per cent since 2011. The cost of providing adult and child social care has soared from £381mn in 2010-11, or 53 per cent of the budget, to £809mn this year, or 83 per cent. Hence the painful cuts.

“None of us want to be making these decisions. We find ourselves here because of the way local government finance is structured. I hope this government might change that,” said Adams-King.

RESIDENTS being kicked out of an iconic tower block from Only Fools and Horses have revealed they won’t budge.

Harlech Tower, located on the South Acton Estate in Ealing, is set to be demolished to make way for modern new housing that will accommodate more people.

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However, many residents living in the flats, which the council has labelled as “shabby,” have expressed that they do not wish to move out.

The tower featured as Peckham’s Nelson Mandela House in the popular TV show, Only Fools & Horses.

Phil Robinson lives on the 12th floor and has a special connection to Harlech Tower.

For decades, the 75-year-old served as the caretaker of the building, including when Only Fools and Horses was filmed there.

Phil has witnessed all sorts under his tenure from house fires to TV crews.

The former caretaker stated that even if he were offered a home in the new development, he would prefer to remain where he is.

“This is my home and I’m being forced out,” he said.

Phil moved into the tower with his late wife in 1975, and he cherishes the fond memories of their life together in the flat.

The 75-year-old also recalled the time Only Fools and Horses was filmed there with the crew having to do a whopping 32 takes for one scene.

Phil was diagnosed with stomach cancer and relies on his neighbours to bring him food as he can’t walk very well.

The Harlech Tower resident fears that the demolition of the block and the dispersal of his neighbours will strip him of the support network he’s relied on for years.

Phil isn’t alone in his desire to stay, as many other residents also prefer not to be displaced from their flats.

Terry, 77, and his wife Elizabeth, 82, have lived on the fourth floor with their daughter and son-in-law for the past 50 years, making them the longest-serving tenants in the block.

The couple told the LDRS that, despite their reluctance to move, they would consider a decent alternative offered by the council.

However, since they learnt of the plans to demolish Harlech Tower, Terry revealed that the council still hasn’t told them where they’ll end up.

The 77-year-old claimed that although the building was approaching the end of its life, there had been no problems until the council refurbished it 15 years ago.

He added: “Since then we have had loads of it… and when you make complaints to the council, they aren’t forthcoming.”

The demolition of Harlech Tower will clear the way for 3,500 new homes to be built on the estate as part of a project worth an estimated £850 million.

The removal of the block is set to start by 2027.

The council added that the move to demolish the ageing tower block will generate twice as many affordable homes.

The decision to replace the iconic tower with a new building stems from a series of faults identified within the block, according to the council.

In contrast to the residents expressing disappointment over the demolition plans for Harlech Tower, the council stated that most tenants in the building have welcomed the “regeneration program” and have chosen to request a new home in the redeveloped estate.

The council added: “Any residents who decide they do not wish to take up one of the newly build homes on the estate will be moved into a suitable home which meets their needs within the borough.”

The Sun has contacted Ealing Council for comment.

In Eimear McBride’s novel Strange Hotel, the unnamed protagonist arrives at a hotel and finds the sense, more than the sight, of other people. There are cigarette butts in the courtyard and the sound of someone next door zipping up a suitcase and boiling the kettle. When she meets up with men in her room, they are fleeting, nameless exchanges: tonight, he is hers, tomorrow he will be someone else’s. The hotel seems to belong only to the protagonist, but we are aware that it is hosting countless other people and happenings. She can feel their shadows.

It is this ghostly space of busy isolation that we enter into when we stay at a hotel. They have this feeling of insectile activity; as if too many people’s memories are occurring one over the top of another.

When I began writing my new collection of short stories, I knew almost immediately that I wanted to set it in a hotel. I was interested in exploring what it means to be a woman moving around in the world, attempting to find some sort of safety within unsafe spaces. Taking the reader into a hotel felt like asking them to enter a place that they would instinctively feel cautious or uneasy about. I wanted them to expect, subconsciously, some darkness. In the stories in The Hotel, which are linked by their shared location, the land itself is haunted and the process of building the hotel is cursed from the start. People are drawn there; some leave without occurrence, but many find themselves, for a long time afterwards, unable, quite, to forget it. In one story a lonely girl staying with her parents discovers a new friend who she later bricks up inside a wall; in another, a resident monster falls in love. 

Someone – we never saw who – had come in and filled it with their presence

While I was researching and writing, I read a lot of books, rewatched films and thought about the space. Why is it so often portrayed as a haunted space, filled with ghosts and danger?

I haven’t always seen hotels as sites of unease. I don’t remember ever staying at one as a child, and so they took on a sort of mythic status in my mind. Compared to the familiar stone cottages on the Isle of Wight, with their gardens filled with long orange slugs, the crumbling houses in France or the dormitories on school trips, with their stink of teenage shoes, hotels seemed enormously luxurious, the height of sophistication. They were, for me, Lucy Honeychurch’s long hair lit with soft Florence light in A Room with a View; mysterious and very grown-up.

But the first time I stayed in one I began to see their potential for discomfort. I was around 23 and had won a writing competition, the prize for which was a few nights’ stay in a hotel in the Lake District. It had a long winding drive and glowing soft stone. The room was enormous and my partner and I cavorted around, jumped on the bed, filled the vast bath to the top. The next morning, when we returned after breakfast, it had changed. Someone – we never saw who – had come in and filled it with their presence. The heavy curtains had been tied, the bed was made, even our clothes had been tidied away. We felt ashamed of our messy suitcase, our unmade bed, and also unnerved. The thought occurred to me that the door could open at any time and someone could come in and move us around the way they had moved our things. They could come in when we slept and fill the bath with milky water, open all the windows, tuck the bedding in around us so tight that we could not move. Some illusion and pretence of solitude and privacy was shattered. Perhaps we had thought we had the only key. 

This sense that a hotel is simultaneously empty and filled is no clearer than at the Overlook Hotel in Stephen King’s The Shining. Danny and his parents are travelling to the Overlook for the winter off-season. The enormous hotel, located high in the mountains, will be empty of guests and other staff and the family will be snowed in.

Already, here is the sense that something is wrong: a cavernous empty hotel is not a suitable home for a small family. Except, because this is a horror novel, the emptiness is an illusion. The Overlook is bustling with the dead, with fragments and flashes of trapped memories that fill not only the corridors, the baths and the gardens but also the fragile, violent mind of Danny’s father. 

These themes echo through Joanna Hogg’s film The Eternal Daughter. Tilda Swinton plays both a middle-aged filmmaker, Julie, and her elderly mother, Rosalind. It is Rosalind’s birthday and they have travelled together to a rural hotel to celebrate. The hotel has all the hallmarks of a classic horror location: a too-long driveway, gardens filled with low-floating mist, an unfriendly receptionist. There seem to be no other guests, but Julie is kept awake by noises from the floor above. 

As the days pass, it becomes clear that Rosalind has existing, and troubling, memories of the hotel; it used to be a country house owned by her family. Memories are layered one on top of the other. Rosalind herself says it: “They hold these stories. And we’re here now. And that was then. And there’s just this muddle in me, of when it is exactly.” 

My father recounts the story of the ghost at his honeymoon

If rooms hold stories then the hotel, with its ever-changing cast of room owners, is the ultimate archive of memories. Almost all of us have experienced the moment of entering a hotel room and finding something a previous occupant has left there; some of us have had the unpleasant moment of going into the room and finding someone else asleep in the bed. My father sometimes recounts the story of the ghost at his honeymoon. In a cottage in the Lake District he saw something on the stairs: a blur of movement. There was no feeling of malevolence but only of repetition, as of someone who had been there before. 

The German word for the uncanny, unheimlich, which translates directly as unhomely, tells us something else important. The unheimlich is the place between the familiar and unfamiliar. It goes some way to explaining why horror is so often located in domesticity. 

Miranda July takes us to this hinterland in her new novel All Fours when the protagonist moves into a motel and employs a designer to decorate the room. Though the room is beautiful, the protagonist finds herself undone. “I was stuck in some terrible purgatory, neither here nor there, not home but not really anywhere else.” This in-between feeling mirrors the days in which she sits in the hospital after her son has been born, waiting to see if he will live or die. Sometimes we cannot go back home. By the end, the motel has a horror-like draw. “The finished room was hard to leave and not because it was so beautiful.” 

I wanted, in The Hotel, to show a building as if it were a person, from conception to death. Whenever I write I am aware of places, houses, forests or rivers, as bodily: as characters in a story. Sitting at my desk, writing these stories, I felt haunted myself, as if when I turned around there would be someone there, waiting. Throughout the collection, a refrain repeats itself, scrawled on walls or in diaries: “be there soon”. The Hotel draws us in and, sometimes, does not let us go again. 

The Hotel by Daisy Johnson is published by Jonathan Cape at £14.99