Top Financial stories of 2017

As we prepare to bid a (fond) farewell to the year 2017, here’s a quick round up of the year’s main financial news.

January While it wasn’t, strictly speaking, financial news, the inauguration of President Trump, was pretty much guaranteed to set the stage for some major changes in numerous areas, including financial changes.  As the UK looks to leave the EU, it will presumably have to negotiate a trade deal with President Trump and his government.

March The triggering of Article 50 and the consequential start of the Brexit negotiations was arguably the single, biggest financial event of 2017, at least from the perspective of people living in the UK. March was also the month in which the UK held what was billed as its last ever spring budget.  The chancellor, Philip Hammond, declared that going forward, budgets would be presented in the autumn.  This, however, is unlikely to be the point for which the Spring 2017 Budget will be remembered.  It is, arguably, far more likely to be remembered for the chancellor’s decision to raise national insurance for the self-employed and the political furore which resulted.  Ultimately the chancellor backed down.

May The election of President Macron put an end to fears that the far right would take power in France and set France on the path to economic reform.  At present time it remains to be seen how far and how fast France will travel down that path, let alone where it will eventually lead or what implications it will have for the UK.  President Macron is likely to be one of the major figures on the EU’s side of the Brexit negotiations.

June Right after the French election, the UK had an unexpected election, which, it was hoped, would bring about a more decisive result than the 2016 election.  In actual fact, it left the Conservatives with an even smaller majority and a “confidence and supply” deal with the DUP.  From a financial point of view, what was noticeable was not just what parties offered in their manifestos, but what they didn’t.  For example, the Conservative manifesto conspicuously did not include a promise to refrain from raising national insurance for the self employed.

July The government announced plans to ban retailers from charging customers for using payment cards (both debit and credit).  While the change is in response to an EU directive, the government has gone further than the directive required by also banning charges for the use of ewallets such as PayPal.  On the one hand, it’s understandable that governments would wish to encourage the use of digital payments in an attempt to squeeze out the (untaxed) cash economy.  On the other hand, it will be interesting to see the effect of this move in practice, since real-world retailers have the option to stop accepting payment cards and online ones could simply move to “handling fees”.

September While Angela Merkel technically won a historic fourth term as German chancellor, her party did not win an outright majority and has struggled to form a coalition.  To put a new twist on an old joke, when Germany sneezes, the EU catches a cold.  More accurately, it is likely to be difficult for the EU to progress with key decisions until they know which way the political winds will be blowing in Germany.  A long period of political uncertainty in a key EU state could turn out to be very unsettling both for the markets and for Brexit negotiators.

November Inflation saw the Bank of England raise interest rates from 0.25% to 0.5% and a new mandate saw Philip Hammond u turn on his spring u turn and start to implement his plan to increase national insurance for the self employed.  Presumably the increased revenues he expects to collect from the self employed will at least help to cover the stamp duty exemption he granted to first-time buyers (for the first £300K of homes costing up to £500K) and the 3% increase in the state pension promised for next year.