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Little Mill Abergavenny, Monmouthshire

Pictures of these two converted 17th-century Welsh cornmills a stone’s throw from the Brecon Beacons line the moodboards of interiors fans worldwide, who lust after the cottage-meets-farmhouse aesthetic, charming bunk beds, deep country-kitchen sinks and playful palette. Elle digital fashion editor Daisy Murray recently visited, as did art-world consultant Sam Talbot, and it’s also where gallerist Alex Tieghi-Walker chose to rest his head when New York got too much and his home country called.

Kyle House, Sutherland

In Sutherland, at the very top of the United Kingdom, is luxury wilderness escape Kyle House. Part of the Wildland initiative – a Scottish conservation organisation dedicated to a 200-year vision for wild nature, spanning 200,000 acres of the Highlands – the former drover’s cottage looks out over Ben Loyal, the twin-peaked mountain some call the “Queen of the Highlands”, and has been renovated with a chic Scandi-in-Scotland feel. Finn Beales, a photographer who shoots for Breitling and Omega, says the property influenced the design of his RIBA-award-winning home in Hay-on-Wye.

Cul Na Shee, Saddell Bay

Interiors architect and shopkeeper Ben Pentreath has retreated to many Landmark Trust properties in his time, but this tiny cottage – the opposite of many of his own grand designs – is the one that moved him most. Tucked away on a grassy patch of a rocky beach in Scotland’s Saddell Bay, Cul na Shee – “nook of peace” in Gaelic – leaves you completely on your own, with only the sea and Isle of Arran to look out to. His stay there inspired him to buy his own tiny bothy on Scotland’s west coast. “If you define good taste as being all about a wonderful building in a fantastic setting, with just simple necessities and no fluff, then I’d look no further,” he says.

The Engine House, Suffolk

The former engine house of an early 1900s Suffolk stately home is now a bright, airy getaway full of set designer Sandy Suffield’s furniture finds, from markets in Lisbon, northern California and everywhere in between. Among its fans are Sam Perry, Killing Eve’s Emmy-nominated costume designer, knitwear designer Jo Gordon, jewellery designer Katy Hackney and singer-songwriter Nick Lowe, who has scored the music for Margaret Howell’s fashion shows. Guests arrive to freshly picked wildflowers and plenty to see and do: local swimming holes, cycling routes and country bakeries, as well as the acclaimed Lark and Pea Porridge restaurants (though they can always just sunbathe in the walled garden).

Craftsman’s Cabin, Somerset

Alice Temperley has her own family cider farm in Somerset, but still took the time to visit this handbuilt log cabin on the Levels. Her verdict: it’s the ideal base for anyone who wants to take in “real Somerset”, with interiors furnished by local makers and, outside, a “relaxing outdoor bath and fire pit under huge skies”. (Temperley adds that there’s also a great, short walk through the field to nearby village pub The Wyndham Arms.)

Carnacalla Cottage, Cornwall

Designer Simone Rocha is one of many to have spent a few days at this 1800s cottage in Sennen, the most westerly parish in the UK. Through the stewardship of new co-owner, stylist Polly Wilkinson, Carnacalla Cottage has become an extension of London’s creative community. She co-organises a popular fair in town, which last year included a workshop with leading Japanese gorpcore brand Snow Peak and late-night DJ sets. But the main attraction is the cottage and the coastline it sits on: one guest says the West Penwith peninsula is the closest thing the UK has to California’s Big Sur – and you’re also invitingly close to beloved dining pub The Gurnard’s Head.

Fairgreen Farm Guesthouse, Cotswolds

In 2012, former Barneys New York fashion director Amanda Brooks traded her position at the heart of Manhattan’s style scene for the Cotswolds. Cutter Brooks, the shop she subsequently opened, has been such a success that she also now quietly operates Fairgreen Farm Guesthouse, a guest house on her private farm. Brooks’s industry friends, including Colette co-founder Sarah Andelman, Filson’s Alex Carleton, actor Rupert Everett, Architectural Digest global editorial director Amy Astley and Paris chef and restaurateur Rose Chalalai Singh, have all flown in for a sleep.

Bryn Eglur, Carmarthenshire

Over the past decade, everyone from designer Martin Brudnizki to writer Alain de Botton has escaped to Bryn Eglur to recharge their batteries. Just a 15-minute drive from the west Wales coast, this restored ruin marries fully detached privacy with tradition you can feel (many of the interior details date back to 1755). Owner Dorian Bowen jokes that while he offers guests bountiful guides to the local area, their feedback at the end is often the same – most rarely leave the site, instead choosing to laze around with the doors open listening to the birds, meditating in the secret gardens and nuzzling their happy dogs.

The Quist Treehouse, Herefordshire

A literal, grounded, enormous treehouse, The Quist offers northern California details – deck balcony, light-summoning windows and a Swedish wood-fired hot tub overlooking ancient oak and fir trees – in the heart of Herefordshire. Homeware designer Matilda Goad stayed last spring and loved the wood-panelled walls and being surrounded by “hardworking materials like leather, quilting, denim, stone and wool”. Stylist Sarah Corbett-Winder took her family, and has plans to return alone one day soon. “They do a two-night minimum stay,” she says, “which means you really do get to soak it all in.”

RESIDENTS living near to an award-winning pub say a 32ft tepee is making their lives a “nightmare” as it’s like living near a festival.

The Eagle and Child, in Ramsbottom, Bury, Greater Manchester, erected the structure in its beer garden during the pandemic.

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The teepee seats up to 72 people and has been described by the pub’s owners, Daniel Thwaites, as an “essential part of the business”.

It is used to host events including weddings, christenings and birthday parties.

However, the pub, which was crowned UK ‘Pub of the Year’ in 2017, has now been ordered to remove the teepee and an outdoor bar following complaints from neighbours.

Aimee Burgess, who lives opposite the pub in Whalley Road, claims the “constant noise” made by people attending events at the teepee was “like having a festival outside the house”.

On one occasion, she claimed she was awoken by revellers performing karaoke outside the pub at 1am.

“It’s ridiculous,” she said. “It’s like having a festival outside the house with the amount of music, people wooing and cheering, and bottles smashing. It’s constant.”

When the teepee was first built, Ms Burgess said it was “absolutely fine”.

But, as more events began to be held at the pub, the problems began.

“It’s only been bad since they started holding weddings and parties in the outside tent,” she said.

“At first, there was an event every weekend. Now there’s an event during the week and every Friday, Saturday and Sunday night.”

A shortage of parking spaces at the pub means that customers often end up parking their cars on surrounding roads, Ms Burgess claimed.

“It’s mayhem in terms of parking,” she explained. “On a weekend, we have to be back by half six if we want to park anywhere close to our house.

“There have been times when we have had to park a five or ten minute walk down the road.”

Ms Burgess said she had contacted the council to explore the possibility of a residential parking scheme being introduced.

“The pub are trying to make everyone happy and I do feel for them, but they needed to be doing more before it got to this point,” she said.

“The teepee itself is fine, it’s just not a pub that was made for events. It was great as a gastropub.

“The beer garden is lovely and has stunning views but it’s not the place for an outdoor venue for weddings, birthdays and bar mitzvahs.”

PLANNING APPLICATION REJECTED

Earlier this month, Bury Council rejected a retrospective planning application for permanent retention of a circular tented ‘teepee’, outside bar, pergola and toilet block.

It came after neighbours raised objections about issues including noise and waste being thrown into rear gardens from the beer garden.

Planners at Bury Council said the application was refused mainly on noise and traffic issues, plus design and appearance.

A planning report found that the plans “would have a serious and detrimental impact on visual and residential amenity”.

It also expressed concerns about on site parking as the pub only has 11 spaces.

Every Friday, Saturday and Sunday, we are having other people’s parties inflicted on us

Local resident

One man who lives in nearby Cheshire Court said he was among those who objected to the planning application.

“I’ve lived in this house for the best part of 28 years and it’s only in the last three I’ve had to complain,” said the man, who asked not to be named.

“It’s a quiet residential area. Since they have introduced that, it’s caused a lot of issues for the residents.

“Every Friday, Saturday and Sunday, we are having other people’s parties inflicted on us.

“The music starts at about one in the afternoon and the noise goes up as more and more people arrive.

“You get singalongs and people banging on the table. There are times when I can feel the baselines in my windows.

“They are having a good time but putting a tent slap bang in the middle of a residential area has been a nightmare for the last three years.

“It would be nice if the venue could contain that within walls rather than a teepee.”

‘DOUBLE PARKING’

As well as “severe noise” late at night, he said another issue was customers “double parking” on Cheshire Court.

On occasions, he says car have been parked on the street for several days after an event.

“The surrounding area is being used as an overspill car park for the pub,” he said. “If they have got a lot of customers then there is not a space anywhere along this street.

“Sometimes there are cars parked all the way down to the motorway bridge.”

He said items have also been thrown over neighbours’ fences, including stones, glass bottles and vape refills.

“We can’t do anything without experiencing the activities going at the pub,” he explained. “I don’t know what the solution is short of it being put back to what it was.

“Businesses are having a hard time but you shouldn’t be able to run a business if it’s massively detrimental to local residents.

“If they had done this and they were somewhere in the middle of a field and weren’t disturbing anybody then good luck.

“To introduce it to this area has caused such a nuisance for the last three years.

“This argument that the pub was there first so they get carte blanche is nonsense.”

When there’s an event, parking is chaos round here

Jon Walker

Jon Walker moved into his home in Peel Brow in October 2021.

He accused the pub of being “disengaged” with residents, as he said: “It doesn’t feel like a local pub. It feels like an events space.

“A lot of the clientele are not from the area. They drive to the pub and park on the street.

“When there’s an event, parking is chaos round here.

“It p***** people off.

“It would be nice if the pub was more engaged with the local community and came and chatted to us.

“It’s odd that you would get an outdoor events space in the middle of a residential area.”

Ramsbottom councillor Gareth Staples-Jones has since called for compromise after being “very disappointed” by the decision.

He said: “As ward councillors, we were not made aware of this decision.

“If residents have concerns or issues relating to the teepee, it would have been helpful to have known prior or at the time of the issue arising so ward councillors or council officers could approach the brewery and pub to find a middle ground and a way to resolve.

“Waiting until a retrospective planning application to hammer in nails feels wrong.

“I will be working with our enforcement team to ensure we’re doing our best to promote places like Eagle & Child whilst also listening to residents’ concerns.

“Rammy is an attractive destination to live, eat, relax and be part of a wonderful community – we need to grow that by working with businesses and the community.”

Earlier this week a spokesman for Daniel Thwaites said that following the decision “we are currently reviewing our options and are aiming to meet with Bury’s planning team to find a solution that works for all parties”.

“Rammy is an attractive destination to live, eat, relax and be part of a wonderful community – we need to grow that by working with businesses and the community.”

Previously, a spokesperson for Daniel Thwaites said: “The teepee was installed post-Covid as part of The Eagle and Child’s recovery plan and has since been very well received by customers and local community groups.

“Following a recent planning decision, we are currently reviewing our options and are aiming to meet with Bury’s planning team to find a solution that works for all parties.”

The Sun Online has approached the pub and Daniel Thwaites for further comment.

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Good morning. Rachel Reeves has tweaked the UK’s fiscal rules, giving herself considerable wriggle room to spend on capital investment (she hopes to spend an extra £20bn a year having changed the fiscal rules she inherited from Jeremy Hunt to increase her headroom to do so by £50bn). Some thoughts on the purpose of fiscal rules and these changes in today’s note.

Money for nothing

Fiscal rules have three major uses. The first is to reassure markets and investors that you aren’t crazy, stupid or both. One reason why Rachel Reeves is setting out her tweaks to the UK’s fiscal rules in our pages and at the IMF is because she wants to tweak these rules without delivering Liz Truss 2: This Time In Red! This also explains why she is strengthening the UK’s fiscal police, or the Office for Budget Responsibility.

Whether that will work is not my department — read this excellent blog by Louis Ashworth over on Alphaville for more on that — which contains a lot of fun charts, including this one from Deutsche Bank:

However, there is also a political dimension to the strengthening of the OBR, which is to find ways to remind people that the Conservatives made Liz Truss prime minister and to continue to punch that bruise.

My worry here is that while the OBR is, in my view, a fantastic innovation that has improved the UK Budget process, there’s a trade-off between strengthening the OBR and making too many decisions by elected politicians subject to outside organisations. We’ll have to look more closely at the detail of what Labour ends up doing on this, but I do have some concerns about it.

This is the area in which Jeremy Hunt’s fiscal rules had already passed with flying colours: he stabilised the UK’s standing after Kwasi Kwarteng’s mini-Budget.

The second use for fiscal rules is that they are a device through which finance ministries control their spending departments. Hunt’s fiscal rule to have debt falling as a proportion of GDP in five years’ time was less good at this, because in practice the five year rolling target meant that the previous government could, and indeed did, use frankly implausible future cuts to make the sums “add up”. As Richard Hughes, chair of the OBR, put it:

Some people refer to that as a work of fiction — that’s probably generous given that someone has written a work of fiction. The government hasn’t even bothered to write down what its public spending plans are.

How effective Reeves’s tweaked rules are at this part depends on how exactly she will end up defining her commitment to get debt falling.

And the third is that they should discourage the finance minister of the day from making stupid decisions. 

One recurring stupid decision that chancellors of the exchequer have tended to make is to cut back on capital spending when they are in a hole, politically or economically. Indeed, this is essentially what Reeves herself did in the summer: cancelling the A303 Stonehenge tunnel scheme and Edinburgh’s planned exascale computer in order to meet in-year pressures.

It is also how Hunt was able to buy himself the wriggle room against his debt rule to make his cuts to national insurance, by pencilling in planned cuts to capital spending.

Reeves’s tweaked rule removes that incentive to trim capital spending in tough times, so in that respect it is a significant upgrade. Of course, your ability to benefit from that rule depends on many other things, not all of them in your control, as well as whether the tax incentives you are creating for businesses and individuals to innovate and invest are right.

So, while this rule is, on paper, a significant upgrade, the degree of the improvement depends very much on what else happens and what precisely Reeves does with it in next week’s Budget.

Now try this

I had a lovely time at the Royal Festival Hall yesterday, where conductor Marin Alsop and the London Philharmonia played work by Gustav and Alma Mahler.

Honesty compels me to admit that I don’t really like any of the work Alma did while Gustav was alive, but it was very interesting to hear them “in conversation” with one another as it were, and it was as good a performance of Mahler’s Symphony No 5 as I have ever heard. Here’s an excellent set of the whole cycle by Simon Rattle and the City of Birmingham Symphony Orchestra.

However you spend it, have a wonderful weekend!

Top stories today

• ‘Despondent’ shoppers | Consumer confidence in Britain has fallen to its lowest this year as households and businesses “hold their breath” for tax rises in next week’s Budget.

• Work schmerk | Keir Starmer said that anyone who owns shares and rental property is not a “working person”. The prime minister is coming under increasing scrutiny about what he means by the phrase “working people” in his manifesto given next week’s Budget is due to involve up to £40bn of tax rises and spending cuts.

• University entry gap widens | The gap between university entry rates for disadvantaged students and their peers in England has reached its highest level since records began in 2005.

• That sinking feeling | Local authorities in England are predicting a collective deficit of £9.3bn by 2026-27, almost four times the figure estimated for this year, according to research that underlines the scale of the strains on council financing.

• The shadow of the past | The Guardian reports that Keir Starmer has opened the door to non-financial reparations for the UK’s role in the transatlantic enslavement, as he came under pressure from Commonwealth leaders to engage in a “meaningful, truthful and respectful” conversation about Britain’s past. More recently today (speaking to the leaders in Samoa) he stuck to the line that he wanted to look forward and that the future should not be “in the shadow of the past”.

Good morning and welcome to your Morning Briefing for Friday 25 October 2024. To get this in your inbox every morning click here.

FCA records 40% rise in complaints about non-financial misconduct

The Financial Conduct Authority has recorded a 40% increase in non-financial misconduct complaints including bullying, sexual harassment and discrimination last year.

The findings are from the FCA’s survey which looks at how investment banks, brokers and wholesale insurance firms record and manage allegations of non-financial misconduct.

The survey of over 1,000 firms found that the number of allegations reported increased between 2021 and 2023.

The Wellesley Grove Journal

Hosting the MM Awards this year was comedian Lucy Porter, who did such a fantastic job of pointing out how full of acronyms this industry is, we wanted to highlight it here….

“I wanted to find out more about you, so I asked Tom and his lovely team, and they said that these are the Money Marketing Awards, or the MMAs.

“They said that, in the room tonight, we might have CEOs, CFOs, MDs and VPs from companies like CCLA, HSBC, HL, AJ Bell and M&G.

“They said some of you might be members of the PFS, the CII or the CISI. They said you might have MCSI after your name, or be a proud owner of a DipFa or RQF Level 4 diploma.”

Quote Of The Day

Keeping a pot for life will make it far easier to keep track of and boost engagement as members can see their pension grow in one place rather than having a fragmented picture through scattered pensions.

-Helen Morrissey, head of retirement analysis, Hargreaves Lansdown comments on the lost pension problem, with an estimated 3.3m pots going astray.

In Other News

The Income Protection Task Force (IPTF) has announced ambitious plans for 2025 as part of its annual membership presentation.

The plans outlined will see the continuation of some of the organisations key work including 7Advisers, Income Protection Action Week, workstream meetings and the return of the Let’s Talk IP podcast.

It will also include several ambitious projects for the year ahead focusing on the organisation’s key objectives — education, collaboration and insight.

The group also announced an organisation restructure including the introduction of a Board to provide professional oversight.

Andrew Wibberley will step down as co-chair after four years, with Jo Miller becoming managing director and Board chair and Vicky Churcher becoming executive director and vice chair.

Keir Starmer hints at tax rises on people with income from assets (The Guardian)

UK consumer and business confidence weaken ahead of Budget (Financial Times)

Europe seeks to underpin Russia sanctions, fearing Trump overhaul (Reuters)

Did You See?

The government appears to have four key objectives ahead of its first Budget next week:

• Cover the £22bn black hole it has uncovered
• Make the UK pension system less or non-dependent upon state support
• Encourage the UK population to become more financially self-reliant
• Encourage investment in UK business

Richard Hulbert, insight analyst at Defaqto, makes four big predictions ahead of the Budget.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Yesterday UPS reported a strong increase in package volumes for the second quarter in a row after a long post-pandemic slump. Whether this is a victory of the US goods economy, for Shein and Temu, or for all three remains to be seen. Tell us what you have been ordering: robert.armstrong@ft.com and aiden.reiter@ft.com.  

Is yen carry funding the US stock rally? 

Dhaval Joshi at BCA Research thinks that the yen carry trade is an important — indeed, the important — factor in the US tech stock rally, and that the biggest risk to the rally is therefore a strengthening yen. 

His argument is based on the historically wide differential between US and Japanese real rates. Here is his chart of the gap between the two countries’ real policy rates:

It was at just the moment this differential blew out in mid-2022 — and yen financing for US assets became correspondingly cheap — that US tech stock valuations recovered from the beating they took in the first half of that year, when the Fed began to raise interest rates. Joshi provides this tidy chart showing how tech valuations decoupled from 30-year bond yields and started to track yen weakness (the brown yen plot is flipped; up means the yen is weaker relative to the dollar):

Joshi concludes from all this that 

Borrowing in yen at deeply negative real rates has fuelled the latest inflation in US tech valuations . . . the biggest risk to the bull market is not a US recession. The biggest risk is the end of the deeply negative real rates in Japan versus the US.

Interestingly, the end could come from trouble at either end of the trade:

The causality could run either way. Higher real rates in Japan versus the US and the associated stronger yen would deflate US tech stock valuations, as happened in July and August this year. Or a puncturing of the hype and hope surrounding generative AI would unwind yen funded leveraged exposure to US tech, and thereby result in a stronger yen.

Joshi suggests investors hedge this risk by being long the yen.

This theory appeals to Unhedged for several reasons. It is contrarian. And it is nice to have a story about why US stock valuations have risen and stayed high in the face of rising bond yields (a puzzle we discussed yesterday). And we don’t have a particularly good alternative story, other than some “animal spirits” hand waving, or some mumbling about the resilience of the US economy. 

But correlations can deceive. And we wonder whether, in a world where Japanese official policy is (by fits and starts) hawkish and US policy has recently shifted in a dovish direction, whether many investors out there would have the courage to put on the kind of trade Joshi describes — especially after the carry trade scare this summer, and given the volatility of the rate environment ahead of the US election.

We tried to reproduce Joshi’s policy rate differential chart using data we gathered elsewhere; this is what we got:

Our version shows that the rate cap has already closed by 1.3 percentage points, and the trend is clear. 

James Malcolm, a UBS FX strategist focused on Japan, says that

The carry trade itself got wiped out so much [this summer]. We had a dramatic move there. What always happens after these events [is] risk limits get tightened up . . . I spend a lot of time every day talking to people who trade Japan. On the whole, FX guys have had a poor few months, and very little profit and loss cushion. They have no capacity to take risks at the moment.

FX consultant Mark Farrington agrees: “Given how high volatility is, it makes it less likely” that traders are still taking advantage of yen carry, he says. “There are too many unrelated risks floating around.”

If there are any brave carry traders out there, email us. 

(Armstrong and Reiter)

Housing

A few months ago we said that the US housing market was just plain awful. Inventories were rising, yet prices were unaffordable and rising. The situation has gotten worse since. Inventories of new homes have now reached their highest in more than a decade. Chart from John Burns Consulting:

Meanwhile, more existing homes are coming on to the market after years of homeowners being unwilling to give up cheap mortgages. “The [mortgage] lock-in effect is slowly waning,” says Rick Palacios at John Burns Consulting, “And you have select markets, like Texas and Florida, where people are starting to put homes on the market for unique reasons, [such as] property and hazard insurance.”

In a market with high inventories, you might expect prices to fall. Not in the broken US housing market. According to Troy Ludtka at SMBC Nikko Securities America, we are seeing more supply come “at a time when there is no demand”. Prices have ticked down for new homes but sales are subdued. For existing homes, prices are still increasing.

Homebuilders are pulling back. Housing permits and housing starts remain weak:

With builders building less and the decline in mortgage rates stalling, new supply is not on the way.

An economic slowdown would bring rates down and help unlock the market — and rising housing inventories and discouraged homebuilders make a slowdown more likely. Residential fixed investment is an important “swing factor” in GDP growth. The Bureau of Economic Analysis highlighted the downturn in housing investments in the second quarter, when there was more building than there is now. But no one will celebrate a looser housing market that is triggered by a recession.

(Reiter)

One good read

PMSR.

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