Interest in interest rates
There's been another cut, which was expected. But there may be a steeper (unexpected) cut on the way.
The UK central bank interest rate was cut again this week. This was always the plan, as outlined last year by the Bank of England (BoE). We’re now at 4.5%; the lowest level since July 2023 (pre-the ‘Liz Truss Budget of Chaos’).
The BoE said there had been enough progress on lowering inflation to warrant a rate cut, though it plans to keep rates elevated "so as to continue to squeeze out persistent inflationary pressures."
Two members of the Monetary Policy Committee (which makes this decision) pushed for a 0.5% (rather than 0.25%) cut.
By contrast, the U.S. economy remains in solid condition. The opposite for us, where inflation is persistent and growth has cooled — with unknown risks from Trump's trade policy.
What does this mean for mortgages? Since this was outlined anyway, most mortgage lenders have priced this year’s expected cuts into their plans. So it’s not a case of ‘rates were cut, now lenders will follow.’
How about savings? Generally, interest rates will continue to trend downwards on savings accounts. If you do have savings you can lock away for a longer period of time, now would be a good time to get a fixed-rate deal secured — ahead of further cuts.
1. Surveillance pricing is ripping you off. Here’s how to fight it
You know how Uber adjusts pricing based on location and demand?
The US Federal Trade Commission (FTC) had reason to believe that companies were doing that with services and products they sold but microtargeted to customers based on their unique profiles — their age, their spending patterns, and even their tendency to order a specific thing at a certain time of night.
In the final hours of the Biden administration, the FTC released its initial report and found that, yes, “details like a person’s precise location or browser history can be frequently used to target individual consumers with different prices for the same goods and services.”
It recommended that the FTC “continue to investigate surveillance pricing practices because Americans deserve to know how their private data is being used to set the prices they pay.” This was before the new administration came in and, predictably, started to f*ck with everything.
This leaves consumers fending for themselves.
Some tips:
Be aware of how companies can profile you.
If you’re a first-time car buyer, you’re likely less savvier about financing options and deals, so you may be presented with less good options
Hw you interact with retail sites — for instance, how far down the page you scroll, whether you click to page two of search results, or if you sort products by “newest” or “lowest to highest price” — can be tracked as well. “Retailers can use that data to get a better sense of your intent to purchase, and your financial sensitivity.”
I cannot state this enough but REJECT ALL COOKIES. It’s a pain to do it each time you open a site, but it’s a small form of resistance.
Clear your cookies regularly, and, if you’re really freaked out, consider other privacy tools.
Also DENY COOKIES.
And use a VPN (I’ve got Proton VPN (it comes free if you use Proton Mail), and I also started using NordPass VPN because it’s included in the Revolut plan I have (£15 a month, and that alone means I’m getting a discounted FT Digital subscription)
Avoid shopping apps and accounts when you can.
If you have an account with a store, there’s nothing you can do to shield your shopping habits from the retailer.
Checkout as guest, use multiple email accounts etc.
Shopping in-person is best.
Plan ahead
You’re more likely to be targeted with higher prices if you seem to be in a rush
Make a stink — publicly
“If you suspect you’ve been targeted by surveillance pricing, go to Reddit or wherever you post and share your story.” Public outrage is a powerful force, especially against large retailers who rely on their reputation to treat customers fairly.
Push lawmakers to do something about it.
Write to state and federal lawmakers (in the US, state-level is more likely to see changes made than federal, obv)
This is where GDPR comes in; it’s better to be a EU or British consumer than it is to be in the US. Companies legally can’t store information about you deemed unnecessary. So the impact of surveillance pricing may be less exploitative than in the US.
2. How to get an ISA and SIPP cashback bonus
I know everyone in personal finance is always banging on about ISAs (using up your ISA allowance — or at least as much as you can — before the end of the tax year. But, as with any financial product, your loyalty won’t typically be rewarded.
So this article is handy; it outlines the potential gains from transferring your ISA or SIPP (self-invested personal pension) to another provider.
I’ve outlined two of them here; there are more in the article.
As always, make sure you initiate a transfer when moving money from one ISA or pension to another. Do not, under any circumstances, withdraw your money to a bank account, and then transfer into a new ISA or pension. The second it leaves the ‘ISA/pension wrapper’ it loses its status, and is treated as taxable money.
Nutmeg
1% cashback when at least £10,000 is transferred from existing ISAs, pensions and/or child trust funds (CTFs).
This means £100 on £10,000, up to £5,000 on £500,000
The transfer(s) must be initiated by 30 May 2025, and customers must stay with Nutmeg until at least 30 May 2026. The cashback will then be paid by the end of June next year
Offer is for new and existing customers
Interactive Investor
Pension savers that join Interactive Investor and transfer or pay in at least £10,000 into its SIPP can claim cashback of between £100 (on £10,000 - £99,999) and £3,000 (if you’ve got £2 million in your pension(!))
The cashback will be paid within 30 days of the deposit or transfer arriving in the SIPP account.
You must keep the money there for 12 months.
If you have a friend using Interactive Investor, get them to refer you. They’ll get a £200 reward, and you’ll get your first year’s service plan, worth £120, for free. To qualify, you must transfer or fund your account with at least £5,000.
This offer ends 28 February!
3. The UK statistics agency is to scrap the ‘Survey on Living Conditions’ — one of main household surveys
The SLC is one of two surveys used to collect data on household income (the other one is the Living Costs and Food survey)
Why is this interesting? Without good data, it’s harder to design good policy. And, if the information available to researchers is more representative of certain segments in society, over others, it’s going to skew the picture painted of living conditions.
The main issue is that the Office of National Statistics has, for a while now, been struggling to get people to do these surveys. People don’t want to do them, and, post-pandemic, there was a move away from in-person to virtual interviews (less effective).
Despite plans to “almost double” the number of interviewers over the next year, the agency’s field workforce would still be 500 short of the estimated 1,500 needed “to get great statistics now across all of our surveys.”
I feel like there has to be a better way of doing this — there’s all this content online about making money from completing surveys — but it probably requires people to be compensated better for their time.
Links!
Money
UK house prices have hit another record high with the average property price reaching £299,138 (ahead of the Stamp Duty increase I covered last week).
Coffee badging. Some people say popping in to the office to have a hot drink before leaving for the day is a convenient, legitimate way to fulfil their obligations. Bosses disagree.
Business and economy
Apple has ‘Sherlocked’ Partiful — the popular US-based invite app — with the launch of Apple Invites.
The UK government has ordered Apple to give it access to encrypted cloud data — this is part of the Tory-introduced ‘Snooper’s Charter’ — and it could weaken security for iPhone users globally.
LinkedIn is a weird, workaholic wasteland — and a total gold mine for Microsoft
Octopus Energy has launched a platform where you can invest in wind turbines — but your money will likely grow more, and with more stability in regular savings products.
Life
It’s Superbowl Sunday and Amazon sensors will track every tackle. AWS powers the NFL’s data drive — over 500 million data points per season fuel the NFL’s analytics system. There are sensors in each player’s shoulder pads, tracking players’ every move, and there’s one in the football too!
Low energy habits that improved my mental health
The girlboss wellness scammers – why are we all so obsessed? I’ve watched the first episode of new Netflix show Apple Cider Vinegar, and am looking forward to seeing the rest. I LOVE stories about grifters, and scammers, and capitalism.
Happy Sunday :)
Know someone who would enjoy this in their inbox on a Sunday morning?