Morfitt's Mailshot Issue 32...          Can't see this email properly? View in browser

Morfitt & Turnbull

Issue 32   

Festive Cheer – Yo Ho Ho??
In this festive newsletter I thought we’d look at something that’s pretty important to most of us, currency, particularly after BREXIT.

As most of you are probably aware the BREXIT vote has led to a sharp fall in the value of the pound, at one stage falling to £1 = $1.22 (US) a fall of over 15%. Whilst £1 = €1.31 on the day of the referendum in June, it then fell to its lowest point on 11th October where £1 = €1.09, a fall of around 17%! This will have a significant impact on British Firms, consumers and also, those outside Europe.
So in short, who are the winners and losers from this?

Winners from a weak pound.
  1. UK exporters, who will become more competitive.
  2. Foreign tourists coming to the UK (a little ironic given the vote!!)
  3. Foreign investors will find British assets/property cheaper.
  4. UK firms, who derive profits from abroad.
So who benefits exactly?

UK firms selling goods abroad mainly - Foreign buyers now need less currency to purchase the same quantity of UK goods, therefore, UK exporters can sell their goods cheaper and/or increase their profit margins, so this should help British manufacturers and exporters provided that there is still a demand for these goods from elsewhere in the world of course.
Losers from a weak pound.
  1. Foreign firms exporting to UK
  2. British holidaymakers going abroad will find countries linked to the dollar and euro more expensive.
  3. Foreign workers in the UK, now less attractive so could reduce net migration to the UK.
So who loses exactly?

British consumers buying imported goods. Many imported goods such as food, petrol and electrical items will be more expensive when the pound weakens and this will inevitably lead to inflation. Regarding inflation, as a rough rule of thumb, a 10% devaluation may increase prices by around 2-3%!
So returning to point two above regarding holidaymakers, where can we actually go on our next holiday to avoid being exposed to the weak pound? i.e. Countries where the British pound is used, for those of you still mulling over your next holiday destination try one of these!
  • Gibraltar
  • Jersey
  • Guernsey
  • Northern Ireland
  • Isle Of Man
  • Saint Helena
  • South Georgia & the Falklands
  • South Sandwich Islands
  • British Antarctica
  • Tristan da Cunha
  • Ascension Island
  Remotest island
So here are a few interesting facts for anyone considering visiting the less well known destinations.

Tristan da Cunha is named after the Portuguese explorer of the same name who first sighted the islands in 1506. It is the most remote inhabited archipelago in the world, lying 1200 miles from the nearest inhabited land, St. Helena and 1500 miles from the nearest continental land, South Africa.

The main Island has 265 permanent inhabitants, the summer season gets underway in mid December where virtually all of the Island’s population take part in Sheep Shearing Day, where the wool sheared from the Island’s many sheep are spun and hand knitted into garments, unfortunately at time of writing we’ve now missed all of the excitement but maybe a diary date for next year!

South Sandwich Islands are a remote and inhospitable collection of islands in the southern Atlantic Ocean, discovered by James Cook, with a total land area of 1,507 square miles. There is no permanent population on the Islands, the present inhabitants are the British Government Office, Deputy Postmaster, scientists and support staff from the British Antarctic survey.

The climate is classified as Polar and the weather is highly variable and harsh. As there are no native inhabitants, economic activity in the South Sandwich Islands is limited. The territory has revenues of £4.5 million, around 80% of which is derived from fishing licenses. Other sources of revenue are the sale of postage stamps and coins, tourism and customs and harbour dues.

Merry Christmas and a very prosperous New Year to you all,


Adam's Technical...  The Autumn Statement
This was Philip Hammond’s first Autumn Statement and his last. Next year there will be two Budgets and from 2018 onwards a Spring statement will be followed by an Autumn Budget.

I have highlighted some of the main points from the statement below:
  National Savings & Investments will be launching a 3-year fixed rate deposit account in Apr ’17, which will be available to anyone aged 16 and over. The minimum investment amount will be £100 and the maximum £3,000. The current rate quoted is 2.2% p.a. but this may change.
  Duty on fuel remains frozen in 2017.
  The adult ISA limit is increasing to £20,000 for the 2017/18 tax year (it is currently £15,240). The Junior ISA limit will be £4,128.
Philip Hammond
  The living wage for those aged 25 and over will increase by 30p to £7.50 per hour from 6 April 2017.
  The pension annual allowance that applies to individuals who have taken a taxable income under the flexible pension rules introduced in Apr 2015 is set to reduce from £10,000 to £4,000 from the 6 April 2017.
  As per the March Budget, from Apr 2017, the income tax personal allowance will increase to £11,500 and the 20% income tax band will increase to £33,500. This means tax at the 40% higher rate will not be assessable until earnings exceed £45,000. The 45% tax rate payable on income above £150,000 will remain the same for 2017/18.
  The savings income band that is subject to the 0% starting rate will remain at £5,000 in the 2017/18 tax year.
  From Apr 2018 Class 2 National Insurance contributions paid by the self-employed will be abolished.
  The tax and national insurance savings for salary sacrifice schemes will be removed from Apr 2017. Please note this does not include arrangements relating to pensions, child care, cycle to work schemes and ultra low emission cars.

Other salary sacrifice schemes in place prior to Apr 2017 will be protected until Apr 2018 whilst arrangements relating to cars, accommodation and school fees will be protected until Apr ’21.
  The rate of corporation tax will be 19% from the 1 April 2017 with a planned reduction to 17% by 2020.
  The rate of insurance premium tax will rise by 2% to 12% on the 1st June 2017.

Gareth Says... 

"Trump Slump or Trump Jump"
So the Armageddon worries of "The Donald" being elected and markets falling badly have been and gone, with most American indices getting to new heights! Currency has been more of an issue, as detailed in Craig’s article, with Sterling strengthening recently after earlier falls which has hampered performance of non UK investment. In fact there are only a few sectors that have driven performance namely healthcare, miners, oil and financials. Most of these sectors have been out of favour with fund managers and so performance in recent weeks has been poor.
    Donald Trump
What about the future?

As many of you know I like contrarian theory and perhaps Trump will be good for small and medium size companies in America. He has said that he will reduce both Corporation and Income Tax which may make him popular with many and give a boost to the economy. If he can start to move the economy who knows? However unpopular, he has a proven track record of "winning" in business, with some failure along the way. If you have the appetite how about some American Smaller Companies in your ISA?

Staff Matters
Bev and Lisa collected money or food from everyone in the office and they made up shoe boxes for the elderly as M&T’s charity venture for Christmas, well done ladies!!

After that bumper edition of Morfitt's Mail shot, we have to finish by extending our best wishes to one and all over the festive period and hope that you all enjoy the festive period as much as we did on our office Christmas Night out, as demonstrated by these pictures!!
  Charity collection
Christmas Night Out   Christmas Night Out
The M&T office will be closed as follows:

Close: 12.30 p.m. Thursday 22nd December 2016
Reopen: 8.30 a.m. Tuesday 3rd January 2017      
See you in 2017! Our valuation dates are scheduled for,
Friday 24th February, Friday 30th June, and Friday 20th October.


No. 1 Booths Park, Chelford Road, Knutsford, WA16 8GS
Tel: 01565 624 370   Email: 

Morfitt and Turnbull (Management Services) Limited 
Authorised and Regulated by the Financial Conduct Authority.
Registered Number 740613 England

This email was sent on behalf of Morfitt & Turnbull by 2ndimpression. If you do not want to receive email updates in the future, please send an email to