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Rathbones has successfully stemmed the tide of outflows that ensued following its merger with Investec’s wealth division. In a trading update released today, the wealth management firm revealed that investors withdrew £200m from its platform in the last quarter of the year, a decrease from £600m in the previous quarter, as reported by City AM. Despite witnessing "particularly strong discretionary inflows", the asset manager noted that a temporary surge in withdrawals around the Autumn Budget resulted in net negative outflows. The company's discretionary and managed propositions saw an increase in inflows to £400m, up from £100m between July and September 2024. However, as the transition into Rathbones continued, cash kept flowing out from the Investec Wealth & Investment business (IW&I), with outflows rising from £300m in the previous quarter to £400m. In 2023, Investec announced that its wealth and management division would merge with Rathbones in an £839m deal. "The integration of IW&I continues to proceed well, and we have made substantial progress in the integration process, in line with our expectations," the firm stated today. "The client consent process is well-progressed with very encouraging responses, and we continue to anticipate completing the client migration onto a single operating platform during the first half of 2025." Over the past year, investors have withdrawn over £1bn from IW&I, offsetting the £415m that flowed into Rathbones’ investment management arm and £606m into its asset management arm. At the close of the year, the firm reported funds under management standing at £109.2bn, an increase from £108.8bn at the end of September and £105.3bn at the end of 2023. However, this was slightly below the anticipated £110bn closing funds under management projected by analysts. The company's share price has struggled to make significant gains in recent months, trading down four per cent from a year ago. "Rathbones’ shares have weakened like others in the sector in recent months, reflecting the generally weak sentiment towards asset-gathering stocks given the uncertainty that has prevailed," commented analysts at Peel Hunt. The firm outlined its priorities for 2025, stating: "Our priorities for 2025 include completing the migration of IW&I clients whilst adding marketing and distribution capability to support organic growth opportunities, both directly and in tandem with third-party IFAs."

Professional Services

How many times will the Bank of England cut interest rates in 2025?

2025-09-14 07:05:30

The speed at which the Bank of England reduces interest rates in 2025 will be a significant point of interest for financial markets, mirroring its importance in 2024. The Bank has only cut interest rates twice this year, leaving the Bank Rate at 4.75 per cent as we enter the new year. Following the latest data release in December, financial markets anticipate a similarly slow pace of easing in 2025. Official figures released the week before Christmas revealed that inflation increased to 2.6 per cent in November, meeting expectations but confirming that inflation remains stubborn, as reported by City AM. Wage growth exceeded market predictions, indicating that price pressures will continue for some time. Unsurprisingly, the Bank chose to maintain rates in December. There was little alteration in the Bank's guidance, with policymakers pledging a 'gradual' rate of interest cuts due to numerous uncertainties surrounding the economic outlook. However, the voting split did surprise markets, with three out of the nine members of the Monetary Policy Committee (MPC) advocating for another cut, primarily due to the UK's recent sluggish performance. GDP figures indicated a contraction of 0.1 per cent in October, marking the second consecutive month of shrinkage. The Bank of England predicts the economy will stagnate in the final quarter of 2024. Indeed, since the summer, growth has been minimal at best and the Budget hasn't provided much relief for businesses. The Monetary Policy Committee (MPC) noted that the increase in National Insurance Contributions is "weighing heavily on sentiment". As we move into the new year, many economists suggest that policymakers will be more influenced by the prospect of slow growth than persistent inflationary pressures. "Although the UK economy is facing significant wage pressures, economic activity is significantly less dynamic than in the US," said Guillaume Derrien, senior eurozone economist at BNP Paribas. He added: "Between an ECB whose rate cuts will, admittedly, be gradual but steady, and a US Federal Reserve that is now more hawkish, the Bank of England will be in an intermediate position in 2025, with four rate cuts expected in 2025...at a rate of one cut per quarter," Ruth Gregory, deputy chief UK economist at Capital Economics, concurred. "We haven’t changed our view that the Bank will continue to cut rates by 25bps a quarter," she stated. The rise in inflation in November was predicted long ago – it was mainly due to base effects – while the MPC pointed out that monthly pay figures can be "volatile". Persistent inflation could still pose a problem for the Bank, but at this point, sluggish growth appears to be the primary concern. Stagnation has already shown up in the official statistics. The Monetary Policy Committee (MPC) is facing uncertainty regarding the influence of Donald Trump, particularly on interest rates and how his tariffs might affect the global economy. The specifics of the tariffs remain vague. "Indicators of trade policy uncertainty had increased materially, but that the magnitude and the direction of the impact of any such policies on UK inflation was at present unclear. These effects might not be apparent for some time," commented the Bank during its last meeting. They indicated that President Trump is poised to significantly affect international trade policy yet refrained from estimating the potential outcomes.

Professional Services

UK dividends dip as mining sector cuts payouts, despite overall growth in 2024

2025-09-12 13:33:05

In 2024, UK dividends experienced a 0.4 per cent decrease on an underlying basis after mining companies cut payouts by 40 per cent compared to the previous year. Despite headline dividends in 2024 increasing by 2.3 per cent to £92.1bn, this was largely due to a surge in one-off payments amounting to £5.6bn. Underlying or regular dividends dropped to £86.5bn, primarily due to a £4.5bn reduction in payouts by mining stocks, which had been the largest paying sector over the preceding three years, as reported by City AM. Excluding miners, underlying growth in UK dividends for 2024 stood at four per cent, while headline growth was 8.4 per cent, as per data from Computershare’s Dividend Monitor report. Housebuilders also contributed to the decline in the total dividend, with FTSE 100 giant Persimmon and FTSE 250 member Bellway both reducing payouts throughout the year. Overall, 17 out of 21 sectors saw increased or maintained payouts in 2024, with banks, insurers and food retailers being the strongest contributors to growth. Conversely, the final quarter of 2024 witnessed a 0.1 per cent rise in underlying dividends while headline figures fell by 0.5 per cent. Looking ahead to 2025, Computershare estimated that median dividend growth should continue at a rate of between four to 4.5 per cent. However, it highlighted that significant cuts have already been announced by several major firms, such as the soon-to-be-merged Vodafone/Three, which are likely to bring down the headline figures. As a result, it is predicted that underlying dividend rates will see a modest increase of just one per cent to £88.2bn, while headline rates are anticipated to rise by a mere 0.7 per cent to £92.7bn. David Smith, portfolio manager at Henderson High Income Trust, commented on the potential impact of the UK Budget: "The impact of the UK Budget is likely to curtail dividend growth for some domestic businesses given corporate margins are coming under pressure from the increase in National Insurance and minimum wage." He also pointed out the international aspect of the UK market, stating, "However, one must remember that 75 per cent of the UK market’s revenues are derived overseas where the global economy is improving."

Professional Services

London and Home Counties hardest hit by huge capital gains tax burden

2025-09-12 01:19:18

London-based investors and those from the Home Counties are poised to be the most affected by the upcoming rise in capital gains tax in April, prompting advice from a top accountancy firm to shift assets into more tax-efficient schemes. UHY Hacker Young, accountants, have provided data exclusively to City AM that taxpayers in the capital are expected to shoulder an additional £430m in capital gains tax (CGT) this year, comprising 30% of the total increased revenue, as reported by City AM. Neighbouring counties such as Buckinghamshire, Surrey, and Hampshire are also set to contribute substantially, with an additional £306m forecasted. In her initial Budget delivered towards the end of last year, Chancellor Rachel Reeves chose to increase both the lower and higher rates of CGT. Basic-rate taxpayers, earning up to £50,270 annually, are now subject to a CGT rate of 18%, a jump from the previous 10%. Higher-earners will experience an increase from 20% to 24% in their CGT when the changes take effect in April. Phil Kinzett-Evans, a partner at UHY Hacker Young, heavily criticised the tax increases, suggesting they could hinder economic growth and reduce market liquidity. "One of the problems with increasing capital gains tax is that it discourages investors from investing in UK growth companies that are listed on the stock market – exactly the kind of investment we need to see more of in the UK," he stated. "It [also] forces investors to consider holding on to assets rather than liquidating them, locking up money that would otherwise fuel the economy at a time when economic activity is stalling." The study, conducted through a series of Freedom of Information requests, revealed that residents of Kensington and Chelsea will be hit hardest by the increases, facing an additional £108m in CGT this year. This figure is more than double the expected receipts from the next highest council, which UHY Hacker Young predicts will be Westminster with an extra £53m in capital gains tax contributions.

Professional Services

Bank of England to cut rates five times in 2025, says Morgan Stanley

2025-08-25 22:25:30

Morgan Stanley has forecast that the Bank of England will implement five interest rate cuts in 2025 to bolster a faltering economy. On Monday, the US investment bank revised its growth forecasts downward, attributing this to the prolonged effects of the Bank's monetary tightening and repercussions from the Budget, as reported by City AM. It now anticipates the UK economy to expand by just 0.9 per cent in 2025, a decrease from the previous projection of 1.3 per cent and significantly below the consensus among City economists. "While the peak impact of the Bank of England’s policy tightening is likely behind us, its drag on the economy still persists," Morgan Stanley analysts wrote. They also observed that the measures announced in the Budget have negatively affected business sentiment. The analysts highlighted a "limited hiring appetite" even before the increase in employment costs, with demand becoming "lacklustre to non-existent" post-Budget. Recent purchasing managers’ index (PMI) data indicates that companies have been shedding jobs at the quickest rate since the financial crisis, barring the pandemic period. "The mood music has deteriorated meaningfully since the summer," the analysts commented, suggesting that the Bank would focus more on the weakening economic activity than on persistent inflation signs. According to Morgan Stanley's predictions, the Bank Rate would end the year at 3.50 per cent, a reduction from the current 4.75 per cent. Goldman Sachs, another Wall Street heavyweight, also expects the Bank to aggressively cut rates, forecasting six reductions by mid-2026. These forecasts are considerably more dovish than market predictions, which suggest three or four rate cuts by mid-next year. Policymakers are set to convene again on 6 February, with a third rate cut expected to be endorsed.

Professional Services

AJ Bell's trading update reveals boom in new customers and assets

2025-09-07 13:42:01

AJ Bell has reported a significant growth with assets under administration soaring to £89.5bn by the end of 2024, an indication of the investment platform's appealing eight per cent customer increase over the year. The trading platform enjoyed a 17 per cent surge in assets throughout the previous year, with a three per cent rise in the final quarter, according to its latest trading update, as reported by City AM. The customer base has nearly reached 561,000, largely owing to its direct-to-consumer platform, which saw a four per cent uptick in users during the year's last quarter. The rate at which advised customers expanded was more modest, experiencing a two per cent growth within the same period, bringing the total to 174,000. "During the quarter we continued to see the benefits of our dual-channel model and the high-quality propositions that we offer to both the advised and D2C market segments," commented AJ Bell's chief Michael Summersgill. The investment firm witnessed robust net inflows across both its platform and investments operations during the final quarter, achieving £1.4bn and £400m respectively. Particularly notable was the direct-to-consumer sector, which secured net inflows of £1.1bn, marking a hefty 57 per cent jump from the equivalent quarter in 2023. "Ahead of the October Budget, speculation around the tax treatment of pensions caused a short-term behavioural change among retail investors, which normalised quickly once the content of the Budget became known," Summersgill added. The company's chief executive stated: "The strong start to the year positions us well as we approach the busy tax year end period. We remain focused on the significant long-term growth opportunity that exists in the platform market. Our dual-channel approach and continued investments into our propositions and brand mean we are well-placed to continue our strong growth." AJ Bell recently received an upgrade from Shore Capital, moving from a Hold to a Buy rating, based on the weakness in its share price and the long-term need for people to save for retirement.

Professional Services

FTSE 100's best and worst-performing stocks of 2024 - from British Airways owner to JD Sports

2025-09-09 01:39:21

The FTSE 100 yielded a return of 5.8 per cent in 2024, but beneath the surface, a distinct divide has emerged between the winners and losers of the blue-chip index. Several stocks have been dropped from London's main index, including Burberry, Easyjet, and Ocado, making way for heavyweights such as Games Workshop and Alliance Witan. Approximately half of the index has generated a double-digit return, with eighteen companies growing by more than 30 per cent, indicating some clear victors. The top-performing FTSE 100 stock in 2024 was British Airways' parent company, International Consolidated Airlines, which nearly doubled in value over the year, as reported by City AM. The airline embarked on a £7bn transformation plan this year, with analysts optimistic about its long-term benefits. Rolls-Royce was a close second, gaining over 90 per cent throughout 2024. The Derby-based giant profited from a resurgence in the aviation sector and increasing interest in nuclear power. Over the past two years, Rolls-Royce has returned more than 500 per cent. Natwest was the third best-performing stock on the FTSE 100, growing by over 80 per cent. A robust set of results boosted the Big Four bank in October when it reported a 26 per cent increase in third-quarter profit. Barclays' stock reached a nine-year high in October, buoyed by high profits from its investment banking division and a resilient performance from Barclays' UK bank. The FTSE 100's best-performing stocks have seen impressive returns, with International Consolidated Airlines leading the pack at a 93.5% increase, followed closely by Rolls-Royce and Natwest with 90.7% and 80.5% respectively. DS Smith and Barclays also performed well, with gains of 77% and 72.7%. Conversely, examining the poorest performers reveals that two retailers have felt the brunt of market challenges. JD Sports experienced a significant drop, losing over 40% of its value. "JD Sports started the year with a profit warning caused by mild weather and heavy discounting affecting pre-Christmas 2023 sales," explained AJ Bell analyst Dan Coatsworth. "The share price took a beating and only started to recover in earnest during the summer. The retailer was subsequently knocked for six by more weather problems and complaints that the US election hurt demand."

Professional Services

Jobs saved as Horizon Works Marketing assets acquired

2025-08-25 22:36:39

Jobs have been saved at an established North East marketing agency following its administration. Horizon Works Marketing, which had operated from a base in Cramlington, called in administrators following challenges stemming from the Covid pandemic. The firm's founder says it is now looking positively to 2025 after a new company has been established to continue trading under the Horizon Works name, with 10 jobs secured in the process. Insolvency experts at KBL Advisory were appointed to Horizon Works late last year. Founder and managing director Samantha Vassallo acquired the assets of Horizonworks Marketing Limited and has established Horizon Works Limited. The business, which is now based out of the Blyth Workspace building at the Port of Blyth, was originally set up in 2010 and has established a specialism in business to business marketing services for innovation and technology-led manufacturing and engineering businesses. Its team of marketers, writers, designers, digital experts and PR and communications specialists provide a range of services including strategy creation, marketing campaigns, SEO, brand development, media relations and digital development. In the 15 years since its inception, Horizon Works has carried out work for a variety of clients across the automotive, process, engineering, energy and technology sectors - many of them North East-based and others further afield. It is also an affiliate partner of several sector-based groups such as the Engineering and Manufacturing Network, a Fit for Defence partner of Make UK Defence, and is a member of the North East Automotive Alliance (NEAA), NOF and the Entrepreneurs’ Forum. Samantha Vassallo, managing director of Horizon Works, said: "The restructure was necessary due to legacy financial pressure resulting from the Covid-19 pandemic. All jobs have been safeguarded and the specialist team that Horizon Works has built up over 15 years remains in place.

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