4th July 2022
Bite-sized business news from the UK and beyond
Good morning Would you sign up to a 50 year mortgage…with the rest of your family? Intergenerational, half century loans are reportedly one of the ideas the government is considering to fix the housing crisis. The scheme, already popular in Japan, would see people buying a home with little or no expectation of completing mortgage repayments during their lifetime. Instead the property and outstanding debt would be passed on to their children.
- Brits set for summer of travel chaos
- US stock markets suffers worst start to the year in over 50 years
Brits set for summer of travel chaos
Other stories to keep you in the loop
US stock markets suffers worst start to the year in over 50 years
The US stock market just put up the worse first-half performance since 1970. The S&P 500 index lost almost 21% in the first six months of the year.
The S&P is officially in a bear market, defined as when an index falls more that 20% from its most recent peak. The other major US index, the Nasdaq, is having an even worse time dropping more that 30% since peaking in November.
Weighing down the indices have been big name tech stocks which have had a torrid 2022. Netflix is down 71%, Meta -52%, Amazon -38% and Apple -25%.
The UK market, in comparison, has fared much better in part due to the lack of tech firms. The FTSE 100 lost just 5% in the first six months.
How did we get here?
Investors have been rattled by the US central bank’s efforts to cool down the economy by raising interest rates to counter soaring inflation. The war in Ukraine has also added to geopolitical uncertainty and investor concerns over a global economic downturn.
Looking ahead: Fortunately past performance isn’t necessarily an indicator of future performance. Back in 1970, when the S&P lost 21% in the first half and there was also a period of high inflation, it bounced back to gain 27% during the last six months of that year.
Stat of the day
In the first three months of 2022 Brits saved £4.5bn compared to the peak of £75.5bn during 2020's first Covid lockdown
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