Financial Notes

MITCH’S NOTE 👋

Well it’s been another week of trying political moves around the upcoming Budget, the public aren’t happy, businesses aren’t happy and markets certainly aren’t happy. Today I wanted to share the latest with you…

MARKETS 📈

Lets start with the UK’s top 100 companies in the FTSE100:

Down 1.55% since market open - signalling a lack of confidence and low sentiment in the UK stock market…

What about the Government Bond Market also known as GILTS?

Up by 0.1% meaning UK government borrowing costs just got that little bit more expensive…

The British Pound?

Not you as well! Down 0.4% against the USD, and is falling against many other major world currencies making our exchange rate less favourable. A weaker pound means importing goods (which we do a lot of) becomes more expensive!

Why is all of this happening? Well it’s as a result of latest rumours being released by media outlets which has caused additional uncertainty over the UK’s fiscal position.

Reports were leaked that Chancellor Rachel Reeves was considering ditching the 2% additional income tax proposal to ensure she doesn’t break her manifesto pledge.

Good for us, perhaps not good for the governments spending plans though!

The reason Reeves is looking at dropping this proposal is due to better than expected OBR forecasts, which suggest that instead of being in a £30B blackhole, it’s ONLY £20B.

Hooray! 🙄

The problem here, is this forecast provided is based on Rachel Reeves being able to deliver on growth forecasts, growth forecasts that require a government to be PRO-GROWTH.

But as at the most recent reports, well the UK economy is shrinking, not growing... well kind of.

It contracted in the month of September, but economic growth is still marginally up in Q3 2025 by 0.1%, but still, not exactly the strong prospering nation that we all hope for.

And it could get worse…

Whilst Reeves appears to have ditched the income tax increase, it appears she’s going to tax you in a way that most people don’t know about, a stealth tax also known as fiscal drag.

This is where Rachel Reeves could freeze the income tax thresholds, they are already froze until 2028, but she could propose to implement this freeze for longer.

Here’s how it impacts you and why you’ll end up paying more tax…

For every year that goes by, you and me hope to earn more money, at least in line with the inflation rate.

So a £40,000 salary last year, with a 3% inflationary adjustment on it would be a new salary of £41,200.

Perfect, £1,200 a year better off right?

Wrong…

You’d still be a basic rate tax payer, but you would be paying slightly more tax due to your slightly higher salary.

And where this gets more destructive is that over time, it puts more and more tax payers into 40% tax bracket, when they earn over £50,270 per year.

In theory, as life becomes more expensive because of inflation, you get a pay rise to offset that cost of living….

….BUT the reality is, the UK government is taking MORE from you in tax, making that squeeze on your finances even greater.

In summary if Rachel Reeves doesn’t increase the income tax thresholds in line with inflation, WE are worse off.

So by freezing them for longer, it means they make more tax revenue, at your expense.

So we have to make more cuts to our lifestyle and spending, and not them.

I hate that this weeks Financial Note feels like more of a negative tone, as I prefer to be more solutions oriented, but as I write this I can’t help but be honest in that this is how i’m feeling, and I’m sure how a lot of viewers and the general public are feeling too, but do let me know your thoughts on all this by replying to this email.

I NEED YOUR HELP 💭

As the year rolls into a close, it’s time to start thinking about New Years Resolutions. Data from YouGov showed for 2025, 29% of resolutions were to do with money! In light of this I was thinking I could run some mini-workshops, completely for free, anything from key “investing terminology”, to perhaps more advanced topics for those that already know the basics.

So I need a favour, what workshops would you like to see? Hit reply to this email and tell me!

BONUS STUFF ⭐️

VIDEO OF THE WEEK 🎬