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23 November 2023

After the joy of Rishi Sunak single-handedly halving inflation and delivering 1 of his 5 priorities for 2023, I was very much the optimist ahead of the Autumn statement. Yet, as this column has suggested many times, the inflation cures were naturally in the system already – the government’s actions are not responsible for that. In my opinion, the rest of the budget fell rather flat!

The shocks of extreme spending during COVID, followed by the Russian invasion of Ukraine led to increases in energy and food costs. These along with supply chain disruption, were temporary inflationary drivers, all of which would ease when the situation normalised.

With CPI now at 4.6% (as at 23.11.23), this is a much better scenario than the beginning of 2023 and we seem to be travelling in the right direction. China is suffering a bout of deflation currently and, if that is exported around the world, the downward trend could continue. I mentioned in the 30th May blog that I believed interest rates would sit at 5.5% by year end. Close but a little too pessimistic. The figure will almost certainly be 5.25%.  I also stressed that long term, creativity is needed to coax people back to work, along with getting those on long term sick back into the workplace. I was encouraged this was on Jeremy Hunt’s itinerary, but I feel it is too little too late for the Conservative party’s election aspirations.

With the Autumn statement headline being the reduction of National Insurance by 2% coming in January 2023, I don’t feel the benefits will be enough to sway voters. With a tax burden at the highest level since the Second World War and c.10% of the population being dragged into higher levels of income tax due to fiscal drag, it wasn’t that eye catching. Alcohol duty was frozen until next August which will help pubs ahead of the busy Christmas period.

All in all, rather uneventful. That said, at least the OBR forecast is now pointing to GDP growth of 0.6% this year, beating the previous forecast of 0.2% dip. OBR forecasts are often unreliable, so I am not hanging my hat on their 2024 forecast and onwards. I do generally feel we could come out smelling of roses against our G7 peers (although more out of good luck than real judgement).

Moving on to markets, they have performed strongly since the CPI data was released and the green shoots continue to show themselves. Our focus currently is towards the low end of FTSE 100, FTSE250 & US. Two shares we have bought recently are as follows:


Shares have been weak recently on the back of news that US property giant CoStar was to acquire UK competitor OnTheMarket. Rightmove is the dominant player in the online real estate space and operates as a platform. Company earnings look sustainable even with a weak property market. With 85% of the market (according to Rightmove) and margins of 70% with cash on the balance sheet, this could be an attractive entry point. This is not the first challenger Rightmove has faced, with failed attempts by Zoopla, Purplebricks and even Google Maps. One of the smaller FTSE 100 constituents. Current share price is 504p (as at 23.11.23).


A household name. Shares weakened immediately after their Q3 update on the softer figures in cloud computing vs Microsoft’s Azure. This has presented an attractive entry point in my opinion. Concerns about growth of Google Cloud look overblown, especially as this is a quarterly update. Long term growth looks attractive, especially with Google CEO Sundar Pichai highlighting that over half of generative AI start-ups are customers of Google Cloud.

Other key financials seemed overlooked, strong growth with revenue up 11% and significant increase in earnings. It also highlighted solid results in its core search engine, coupled with success of its Pixel phones, YouTube and other areas. With 55% gross profit margin, 21% net profit margin – growth looks set to continue with this being a short-term blip. Current share price is $140 (as at 23.11.23).

Neil MorssChartered FCSI