Sterling, savers, pensioners and buy-to-let

The pound has dived on Asian markets with automated trading being blamed for the volatility. At one stage it fell as much as 6 per cent to $1.1841 – the biggest move since the Brexit vote – before recovering to $1.24, still down 1.5 per cent. It is not clear what triggered the sudden sell-off. Analysts say it could have been automated trading systems reacting to a news report. The pound has been volatile since the UK voted to leave the European Union. The 6.1 per cent drop in the pound against the dollar while we were all sleeping is the second-biggest intraday fall the currency has ever suffered, according to the Financial Times. It’s behind only the 11.1 per cent tumble that resulted as the outcome of the EU referendum result became clear. To put that in context, today’s seen a bigger slide than during both the financial crisis and Black Wednesday. The pound has since made back some ground and is down 1.3 per cent. Meanwhile, big electrical items are likely to become more expensive after Christmas because of the weaker pound, says Claer Barrett, personal finance editor at the Financial Times. Retailers have protection in place against currency fluctuations – known as ‘hedges’ – but many of them start to run out around Christmas time, she told BBC Breakfast. That means imports will become more expensive, leading to higher prices and the possibility that the January sales might not be as generous as previous years. Savers Mark Carney, the Governor of the Bank of England, has said that it is for the Government to help millions of savers who have suffered because interest rates are at a record low, according to The Telegraph. Theresa May, the Prime Minister, pledged this week to help savers who have ‘found themselves poorer’  in the wake of the financial crisis while those with mortgages have ‘found their debts cheaper’. She said a ‘change has got to come’ and suggested she wants to end the Bank of England’s policy of ‘quantitative easing’, effectively printing money, now the outlook is improving. Speaking ahead of the International Monetary Fund’s annual meeting in Washington, Carney admitted that the policy had had ‘consequences’ and had left some Britons poorer than others. However he said: ‘Every monetary policy, every monetary action has distributional consequences. It is not for the central bank to address those distributional consequences. It is for broader government to offset them if they so choose.’ Pensioners

Theresa May could bring back pensioner bonds for all ages to help long-suffering savers, it emerged last night.

According to the Daily Mail, former pensions minister Baroness Altmann suggested government-backed bonds with higher interest rates would be a boost to those who have endured rock-bottom returns for years.

It is understood other plans to help savers may include tax breaks, such as ripping up savings limits on ISAs. A source told the Mail that industry experts have been asked to present their ideas to the Treasury before the end of the month.

Buy-to-let

Landlords campaigning against the hacking back of mortgage tax relief were dealt a bitter blow yesterday.

The Administrative Court did not grant permission to proceed with a full judicial review hearing of the legislation in the case led by Cherie Blair QC of Omnia Strategy LLP, representing co-claimants Steve Bolton and Chris Cooper.

The Daily Mail reports that the pair of landlords represented by Blair have raised £180,000 to fight the changes through crowdfunding their campaign – dubbed ‘Axe the tenant tax’ – since it launched in January.

The tax relief change will curb the amount of mortgage interest landlords can offset against tax on their property investments and could mean buying and renting out property is no longer viable for some.

House prices

House prices in the three months to September were 5.8 per cent higher than in the same three months of 2015, according to the Halifax.

Martin Ellis, Halifax housing economist, said: ‘House prices in the three months to September were largely unchanged compared with the previous quarter. The annual rate of growth eased from 6.9 per cent in August to 5.8 per cent. ‘The housing market has followed a steady downward trend over the past six months with clear evidence of both a softening in activity levels and an easing in house price inflation.’

Motor insurance

The rising cost of car insurance is showing no sign of stopping, especially in the run up to winter when motor premiums historically reach their annual peak. Motorists can expect to be paying over £700 on average by the end of the year, according to the latest findings from comparethemarket.com. The latest Premium Drivers Index, which analyses the difference between the ‘average’ and the ‘cheapest’ motor insurance premiums – known as the savings variable – has found that the quarterly cost difference between the cheapest and average premiums on the market has grown to £118 between June and August 2016 – the greatest gap since records began. The average premium between June and August 2016 cost £697, up from £679 in the previous quarter and from £605 year on year – an annual rise of £92.The cheapest policies averaged over the quarter and across age groups have also seen an increase, rising from £510 to £579 in the last twelve months.