United Kingdom plc

George Osborne has given notice regarding the first wave of spending cuts, as the new coalition government begins to tackle our huge national debt. Consequently, an emergency budget will be announced on 22nd June when we will learn full details of the various savings which will be implemented, to place the country back on a road to recovery.

Events in Greece (and to a lesser extent other Euro-zone countries) have amply demonstrated that we have no choice other than to reduce public expenditure and to do so quickly!

Doubtless, we will all be affected by reductions in public spending and increases in taxation… but it is important to remember that, in addition to cuts, we must have a healthy business sector. The private sector generates the taxes which the Government then spends, so we can also anticipate some positive measures to encourage business activity.

Your Asset Allocation

One certainty is that the next government will finally have to tackle our huge national debt… which undoubtedly means 'no pain without gain'.

We will shortly contact you with recommendations for changes to the investment profile of your portfolio. As we stated previously, we will be focusing on UK Gilts (for stability) UK FTSE 100 companies (who earn most of their income from trading overseas) and developing economies such as India, China and Brazil.

China is also the focus of this month's investment commentary, please see the link opposite. An article from Baillie Gifford features their Greater China Fund and outlines the opportunities for growth in China during the coming years.

It is reasonable to assume that market volatility will remain with us for some years, until it becomes clear that problems surrounding sovereign debt have finally been brought under control. As always, our recommendations will reflect your personal objectives and your particular attitude towards risk.

Overall, we remain optimistic that the UK economy can continue to recover and thereby continue to provide us all with a fair and reasonable return on our investments.

Please do not hesitate to contact us if you would like to discuss any financial matter.

Please use 0845 604 6285 to contact us with any queries or, alternatively you can send an email to: advice@argylefinancialgroup.co.uk