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Money digest: today’s need-to-know financial news

29 April 2016

10:20 AM

29 April 2016

10:20 AM

April is traditionally a squally month; it seems that there’s a shadow over our confidence as well. The Guardian reports a survey from market researchers GfK which shows that Britons have lost faith when it comes to personal finance, the UK economy and shelling out on big investments. The index was showing 0 in March, but for April has dropped to -3, down seven points from last year.

There can be no sweeter feeling that putting your hand in the pocket of a long-neglected coat and feeling your fingers brush against a crisp banknote. But we’re stashing our cash in more and more bizarre places, according to the Daily Mail this morning. Citing a report from Virgin Money, the paper says that due to ‘dismal’ interest rates, more and more people are squirrelling money away at home. 14 per cent of those surveyed still use a piggy bank; others put money into bottles and jars, teapots and the freezer. 17 per cent of those surveyed said their savings were generating no interest at all. The average ISA now pays 1.29 per cent interest, compared to 2.39 five years ago.

The Telegraph informs us that London has now out-priced many home-buyers, who are looking to York, Bristol and Cambridge instead. ‘The high price of inner London and parts of outer London means that many will look further afield,’ says Miles Shipside, director of Rightmove. ‘[They will have] initially searched for options in London on Rightmove, seeing what they can or cannot get for their money.’ The average house price in London is £600,000; in Bristol it is £250,000.

The New York Times reports on the European Union’s quibble with Google. The search engine has a monopoly on the market, as it is pre-installed onto most devices. Google pays Apple an estimated $1 billion a year to have its website as the default option. A similar case was brought to the Federal District Court in California last year, when two plaintiffs alleged that Google ‘threatened harm to innovation and consumer choice.’ The judge ruled in favour of Google, which already has a 90 per cent market share for search engines in Europe. But the paper claims that the case might help rivals more than consumers. ‘Europe is moving pretty far into left field with this case,’ said Professor Hovenkamp of Iowa College of Law. ‘It seems like over-regulation for the benefit of competitors that won’t end up doing consumers any good.’

Don’t blame yourself if you’re struggling to save: lack of money savvy could be hardwired into our brains, according to When it comes to making decisions about our financial futures, ‘hyperbolic discounting’ comes into play. This means we value something we can have immediately over something we would have to wait for – even if the latter is worth more. ‘Hyperbolic discounting means we discount the future to a greater extent than the money compounds,’ said Chip Castille, a retirement expert at BlackRock.

Finally, it may be time to start buying bitcoins as investment, according to Dominic Frisby in Money Week. This despite the value of bitcoin falling to around $200 per coin, compared to a high of $500 in 2014. He cites the ‘hype cycle’ and says ‘[bitcoin is] in a bull market now. And I think you should buy in.’

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