Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Inflation in September fell below target in the UK and the eurozone, and dropped to the lowest since early 2021 in the US, hurray!
Yet, another common trend that matters a lot for households went largely unnoticed: food inflation ended its steady decline and ticked up.
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In the UK, inflation of food and non-alcoholic beverages rose to 1.9 per cent from 1.3 per cent in September, marking the first increase since March 2023, according to official data published this week.
Eurozone food inflation for the same period increased 0.1 percentage point to 1.6 per cent, following no change in August and 16 months of almost uninterrupted decline, official data showed on Thursday.
And in the US, annual food inflation in September rose to 2.3 per cent per cent from 2.1 per cent in the previous month, the largest increase since August 2022.
This comes as wholesale food prices stopped declining at the start of the year and started rising again, according to the FAO index. Trends in food wholesale prices lag consumer prices by a few months as items flow through the supply chain, so what’s coming is not encouraging.
In September, the FAO Food Price Index rose to 124.4 in September 2024, up 3 per cent from August, which marked the largest month-on-month increase since March 2022. Price quotations for all commodities included in the index strengthened, with the increases ranging from 0.4 per cent for the meat price index to 10.4 per cent for sugar, it explained.
“The reasons that food prices are rising again are mainly climate related,” said Tomasz Wieladek, chief European economist at T Rowe Price.
The FAO goes into more detail, quoting worsening crop prospects in Brazil following prolonged dry weather and fires that damaged sugarcane fields in late August, as the main drivers of the increase in global sugar prices. Concerns over lower-than-expected production in major Southeast Asian producing countries were behind the rise in international palm oil price increases. Excessively wet conditions in Canada and the EU caused wheat harvest delays and a sizeable cut to production, pushing up wheat prices.
For policymakers the rise in food inflation matters as “consumers form their inflation expectations based on food price inflation because this is a repeated transaction they face every week,” said Wieladek. This is in line with a paper published by the Bank of England last week that found “over 60 per cent of households report that their inflation perceptions are heavily influenced by food prices”.
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Inflation expectations matter for spending behaviour and wage demand. Higher food prices have a disproportionate effect on households because there is little scope to avoid buying groceries, and because what you spend on subsistence comes out of what you can spend on other things.
Admittedly, September’s food inflation was small and barely visible in a chart where food inflation dropped from double-digit heights. However, it will add to much higher price levels than three years ago. In the UK, food prices are about one-third higher than at the start of 2021, they are nearly 30 per cent above that level in the eurozone and 23 per cent up in the US.
A bottle of olive oil in the UK, for example, cost on average £3.50 in early 2021, but now costs £9.20, according to the ONS. These are increases that many people have not experienced before.
And now the trend could be up.
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Claus Vistesen, economist at the consultancy Pantheon Macroeconomics thinks that eurozone food inflation “is now likely rising slightly consistent with a lagged response to surveyed selling price expectations.”
“We think food inflation will rise gradually from here on, but slowly.”
Beachfront Turkish hotel which has seven pools, football academy and daily kid parties
Other archeological draws include a 15th-century castle and the Museum of Underwater Archaeology, which houses one of the oldest prehistoric exhibitions in the world.
And just outside, there is the village of Etrim, where families have been making traditional Turkish rugs for hundreds of years.
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Ryanair services to Dalaman will begin one day later on December 2, 2024.
Flights to Dalaman will leave London Stansted at 6am, landing in Turkey at 12.50pm.
Return services will then leave Dalaman at 2.45pm, arriving back in the UK at 3.45pm.
One of Dalaman’s most famous attractions is the rock tombs of Fethiye, built into the huge cliff faces.
BUDGET airline Ryanair has also added several other new routes to its network in recent weeks and months. Here are a few of the airline’s latest offerings…
The state pension is expected to increase by 4.1% in April 2025 due to the triple lock formula. This means those on the full new state pension will receive £230.30 a week, while those on the basic state pension will get £176.45. The rise is based on average earnings growth (4.1%) exceeding both inflation (1.7%) and the 2.5% minimum. However, some pensioners may see a smaller increase due to a rule affecting pre-2016 pensions.
St James’s Place (SJP) has appointed Adam Higgs as its new head of protection. Higgs, formerly of Protection Guru, will focus on enhancing SJP’s protection offerings and driving growth. He will work with SJP advisers to ensure clients receive adequate protection, aiming to solidify SJP’s position in the protection market. Higgs brings extensive experience from his previous roles at Protection Guru, the FTRC, Foster Denovo, and Scottish Life.
The FCA has denied claims it is forcing small advice firms out of the market through increased regulation. Nick Hulme, FCA head of advisers, wealth and pensions, emphasised the value of small firms and their crucial role in closing the advice gap. He acknowledged the challenges faced by smaller firms in meeting regulatory requirements, but highlighted the Consumer Duty as a way to ease this burden. Hulme stressed the FCA’s commitment to supporting all advice firms, regardless of size, and aims to foster collaboration to benefit consumers.
There are concerns that Labour may scrap inheritance tax relief on AIM stocks in the upcoming budget. This could significantly impact the AIM market, which has already seen a decline in IPOs. Removing this tax break might deter investment in smaller companies, hindering economic growth. Critics argue that AIM is already struggling, with low liquidity and trading volumes, and suggest the government’s PISCES framework as a better alternative for private companies seeking funding.
Financial Life Planning, founded by Kate Shaw, has appointed Rebecca Tuck as operations director to spearhead the firm’s expansion. Tuck aims to streamline internal processes and enhance the client experience before expanding the team. The firm, which champions a client-centric approach, is undergoing a rebrand to attract those who feel underserved by traditional financial planning, particularly Gen X women. They are actively seeking new employees who align with their values and client-focused ethos.
Attivo, a chartered independent lifestyle financial planning business, has appointed Jo French as its new CEO. French brings over 25 years of experience in financial services, having held senior roles at Schroders, Benchmark Capital, Pointon York and Embark Group. She will focus on operational improvements, client experience, and Attivo’s investment platform strategy. Stephen Harper will continue as chair, leading the overall business strategy.
The number of small advice firms is rapidly declining, according to Tim Sargisson, former chief executive of James Hay and Sandringham Financial Partners. He cites increased regulatory burdens, competition, and the rise of digital services as key factors. While niche markets and outsourcing offer potential solutions, they also carry risks. Sargisson predicts that small firms may ultimately disappear, mirroring the decline of traditional high street shops.
Investor interest in ESG (environmental, social and governance) factors has fallen for the third consecutive year, according to the Association of Investment Companies. While almost half of investors still consider ESG, this is down from 66% in 2021. Concerns about greenwashing and performance remain, though governance is growing in importance. Older investors are less likely to consider ESG factors compared to their younger counterparts.
Greg Moss, founder of Eleven.2 Financial Planning, challenges the idea that small advice firms are heading for extinction. He argues that small firms are still dominant in the advice market and offer advantages over larger firms, such as greater innovation and better client outcomes. While acknowledging the importance of technology, Moss emphasizes the value of personal interaction and client care, which he believes small firms are better equipped to provide. He also highlights the limitations of large firms, including bureaucratic processes and a focus on commoditised services. Moss concludes that small firms will continue to thrive as long as they prioritise client needs and relationships.
The FCA’s proposed value for money framework for pension schemes, which closes for consultation today, has garnered mixed reactions from the industry. While broadly supportive of the aim to improve value for savers, concerns remain about potential market disruption, the complexity of the metrics, and the need for consistent application across different pension types. Some argue for a more nuanced approach that considers the diverse needs of the market and encourages innovation.
“The starting gun has been fired on the break-up of Boohoo”, said Russ Mould, investment director at AJ Bell.
“Selling Karen Millen and Debenhams is the obvious starting point, leaving Boohoo with a sharper focus on a younger target market”.
Retail analyst Catherine Shuttleworth added that fast-fashion firms are “under pressure” as shoppers think more sustainably and are “making different choices”.
Boohoo bought Karen Millen for £18.2m in 2019 and three years ago it took on department store brand Debenhams for £55m.
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“Acquired brands like Debenhams and Karen Millen, now purely online players, haven’t had the impact on shoppers that the business might have liked”, said Ms Shuttleworth.
Boohoo admitted on Friday that its youth brands were struggling, including boohoo.com, boohooMAN and PrettyLittleThing but said it expected that to improve in the second half of its financial year.
John Lyttle would be leaving. He joined the company six years ago from Primark.
Under Mr Lyttle, the company has attempted to shift its image away from fast fashion. In 2021, he told the BBC that Boohoo was not a “throwaway fashion brand” and the firm was aiming to be more sustainable.
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In a short statement in the release, the outgoing chief executive said he would stay on until his successor was found.
The company also reported that its sales had fallen by 15% to £620m for the six months to the end of August. Trade tumbled across the UK, the US and internationally.
Tesco Bank also offered current accounts, which were closed to all customers in November 2021.
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Those affected by the switch to Barclays are not required to take any action before the switch, and there will be no changes to their services after it occurs.
Are you owed cash from your bank?
WHAT IT MEANS FOR YOUR MONEY
In the short term, it is likely customers won’t notice much change.
Your credit card and personal loans will still be marketed under the Tesco Bank name, and you won’t need to request a new card or change how you’re repaying any debt.
Barclays has said that it will continue to operate the business under the Tesco Bank brand for at least 10 years as part of a “long-term, exclusive strategic partnership”.
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While no staff will transfer to Barclays under the scheme, it is anticipated that “approximately 2,523 employees across the UK and India” will eventually move over to the banking giant.
Tesco Bank will continue to operate its insurance products, ATMs, travel money and gift cards under its own roof.
In the meantime, it’s always worth checking to see if you can get a better credit card or land deal elsewhere.
FIND THE BEST CREDIT CARD AND LOANS
To assess all the available cards and personal loans, visit price comparison websites like MoneySavingExpert’s Cheap Credit Club or Compare the Market.
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These sites allow you to tailor the perks you’re looking for, whether it’s cashback, air miles, or other rewards.
You should always use an eligibility calculator before applying, that’s because every credit card application leaves a mark on your credit file and can affect your credit score.
Once you run your details through an eligibility calculator and you’ve been shown that you’re likely to be accepted, make a formal application.
To do this, you will need to provide your name, address and email address as well as details of your income so a provider can assess your eligibility.
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You will also need to provide details of how much money you want to transfer to the new card, but you can often do this after you have been accepted.
If your application is approved, you will need to transfer the balances within a set period, usually around 60 or 90 days.
Your old balance will then be cleared and you can start making interest-free repayments on your new card.
CREDIT CARD NEED-TO-KNOWS
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NOT using a credit card effectively can wreak havoc on your finances and your credit score.
If you don’t keep up with repayments or default on your debt, you are likely to get a black mark on your credit record, which could affect your ability to get a credit card, loan or mortgage in the future.
It’s important not to let yourself get sucked into overspending.
You should always clear the full balance as soon as possible.
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If you have a poor credit score, don’t bank on being approved for a card or getting the 0% deal you’d hoped for.
Card providers only have to give the advertised rate to 51% of applicants, so you could end up paying more interest than you bargained for.
After your 0% period is up, lenders can charge upwards of 40% interest, so if you have not repaid the debt fully by then, try to move the debt onto another 0% deal.
If you’ve got a poor credit record, you’re less likely to get the best rates.
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And if you are looking for a new credit card, don’t apply for lots at once.
OTHER BANKING NEWS
Tesco Bank isn’t the only supermarket bank to have been sold in recent months.
NatWest agreed to purchase Sainsbury’s Bank in June 2024.
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In September, the far right, anti-immigrant Alternative for Germany (AfD) party won the most seats in a state election for the first time. Concerns about the AfD’s rise have been growing for some years, but this was the clearest sign yet of the threat the party poses to Germany. As such, the arrival of Djinns in English couldn’t feel more timely.
Djinns — a word of Arabic origin that one character, Peri, says can be used to mean “everything we think is strange, different, unnatural” — was a bestseller upon publication in Germany in 2022. The book, the second novel by Berlin-based Fatma Aydemir, herself the granddaughter of Turkish-Kurdish immigrants, is a deft, multi-layered story of one immigrant family’s life. It feels epic, although its primary storyline happens over just a couple of days in 1999.
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We begin with 59-year-old Hüseyin in the Istanbul apartment where he hopes to retire. As he walks its rooms he looks back over what he has endured since first going to Germany as a Gastarbeiter (guest worker) in 1971, and then settling with his family in Rheinstadt, Thuringia — the state the AfD won this year.
But then Hüseyin suffers a heart attack and dies. The Muslim tradition is to bury loved ones as soon as possible, so his wife and four children hurry to Istanbul.
The novel’s six chapters are each told from a different family member’s perspective. We hear from the couple’s youngest son, 15-year-old Ümit, who is caught up in struggles with his sexuality. His oldest sister, single mother Sevda, fell out with their parents years ago. Peri, a student in Frankfurt, has begun to question their parents’ values, not least the unspoken rule that the family doesn’t speak Kurdish any more. And then there is Hakan, angry at the lot his child-of-immigrants status has handed him, despite his love for that most German obsession: driving on the autobahn at breakneck speed.
Most moving is their mother, Emine’s, chapter. None of her children know the extent of her trauma, until Hüseyin’s death leads to her disclosure. “He took away and gave me everything, your father,” she says.
Aydemir is unrelenting in her depiction of racism. Arsonists target migrant homes, and racist slurs are frequent. But despite this weighty subject matter, its language is playful, translated with a lightness by Jon Cho-Polizzi. Upon hearing of her husband’s death, Emine “had become a collapsed heap of limbs . . . as impossible to reconstitute as the stewed meat in a pot of goulash”. It’s a wonderful, awful image.
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Aydemir’s novel is about Turkish migrants in Germany. But its majesty as a work of literature is in its universality. All over the world, people choose or are forced to leave their homelands. Working out how we can better welcome these migrants is essential if democracy is to survive, and to do so we must open our ears to the reality of their experiences. English-language readers of Djinns must not see this as a German problem; as is evident in the rhetoric of British far-right politicians, the task is ours, too.
Djinns by Fatma Aydemir, translated by Jon Cho-Polizzi, Peirene Press £12.99, 368 pages
Join our online book group on Facebook at FT Books Café and subscribe to our podcast Life and Art wherever you listen
However, speaking on this week’s The Martin Lewis Podcast, the consumer expert revealed there are reasons millions will not get the full headline figure.
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Martin said: “The figure you will see in most places quoted that state pensioners will see a rise of £475 a year, in practical terms that is an unrealistic figure for the vast majority of pensioners who will not see that rise.”
He then went on to explain that this is due to the figure relating to the full new state pension.
This pension came in in April 2016 and is a “totally new” type of pension for anyone who hits state pension age in or after that time.
Martin continued: “But if you look at the numbers, only one in four state pensioners get the new state pension, the rest are on the old state pension because they hit state pension age beforehand.
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“The old state pension is less in its basic form than the new state pension, therefore a 4.1% rise in the old state pension is not as much so the vast majority of state pensioners won’t see £475 a year, they will see £363 a year as the full old state pension rise – it’s much smaller than is often quoted.”
Could you be eligible for Pension Credit?
The MoneySavingExpert then went on to explain that even those on the new style state pension can only get the full amount if they have the correct amount of qualifying years.
Under current rules, you need 35 “qualifying years” to get the full new state pension.
He said: “If you don’t have your ‘full’ qualifying years which millions don’t, especially many of the poorest – many of those who are eligible for pension credit – then you won’t get the full rise because it is a 4.1% rise on what you got and the £363 a year for the old state pension is if you’re on the ‘full’ old state pension.”
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It’s important to bear this all in mind, Martin explained, pensioners need to have “realistic expectations” of what they can get.
He continued: “But also in the debate over winter fuel payment is what’s often quoted is the triple lock increase of £475.
“But only one in four state pensioners get the new state pension which is the higher amount and many of those won’t be on the ‘full’ state pension – so we need to be slightly careful, many people have come to me and said yeah but they get this triple lock of this much extra a year – but the vast majority of pensioners won’t get the full £475 which is what you will see quoted in many media outlets and many government communications.
“The vast majority of pensioners will see an uplift that is far less than that because the vast majority of state pensioners are on the old state pension and many don’t have the full state pension.”
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Topping up your state pension
If you think you’re missing National Insurance years, the first thing to do is check your State Pension forecast.
You can check this as well as the State Pension age through the government’s new ‘Check your State Pension’ tool online at www.gov.uk/check-state-pension.
The tool is also available through the HMRC app, which you can download free on the Apple App Store and Google Play Store.
You might be able to buy back years.
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But earning back the years isn’t free, so your voluntary contributions come at a price.
If you fill gaps between 2006/07 and 2015/16, you’ll pay the 2022/23 rates for contributions.
It is worth £15.85 a week, which means it costs £824.20 to buy one year of contributions.
As the state pension was £185.15 per week in 2022/23, this boost would add £5.29 per week or around £275 per year.
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Although you’d have to pay £8,242 (10 lots of £824.20), the annual state pension boost would be around £2,750.
Someone who was retired for 20 years would get back around £55,000 in total (before tax).
Anyone under 73 can make voluntary pension contributions, as it’s assumed everyone under this age will claim the new state pension.
If you’re below the state pension age, you can check your state pension forecast by visiting www.gov.uk/check-state-pension to determine if you’ll benefit from paying voluntary contributions.
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You can also contact the Future Pension Centre by calling 0800 731 0175.
If you’ve reached state pension age, contact the Pension Service to find out if you’ll benefit from voluntary contributions.
You can contact this service in several different ways by visiting www.gov.uk/contact-pension-service.
You can usually pay voluntary contributions for the past six years.
For example, you have until April 5, 2030, to compensate for gaps in the tax year 2023 to 2024.
The deadline has been extended for making voluntary contributions for the tax years 2016 to 2017 or 2017 to 2018. You now have until April 5, 2025, to pay.
Find out how to pay for your contributions by visiting www.gov.uk/pay-voluntary-class-3-national-insurance.
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You could also be eligible for the top-up benefit Pension Credit if you’re 66 or older and your income is below £218.15 a week if you’re single or £332.95 as a couple or if you meet other criteria.
Pension Credit explained
Pension Credit is a benefit which gives you extra money to help with your living costs if you’re on a low income in retirement.
It can also help with housing costs such as ground rent or service charges.
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You may be able to get extra help of you’re a carer, have a disability, or are responsible for a child.
It also opens up access to lots of other benefits such as the warm home discount scheme, support for mortgage interest, council tax discounts, free TV licences once you’re over 75, and help with NHS costs.
To qualify, you need to be over state pension age and live in England, Scotland or Wales.
If you have a partner, you need to include them on your claim.
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Pension Credit tops up:
your weekly income to £218.15 if you’re single
your joint weekly income to £332.95 if you have a partner
However, even if your income is higher, you might still qualify if you have a disability or caring responsibilities.
There is also another element to Pension Credit called savings credit. To get this, you need to have saved some money towards your retirement.
You can get an extra £17.01 a week for a single person or £19.04 a week for a married couple.
If you have more than £10,000 in savings, the government uses a calculation to work out how much it adds to your income.
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Every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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