The Rest Is Money 218. How Do We Get Off The Escalator Of Ever Rising Taxes?
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Oct 22, 2025 In this discussion, Karen Ward, Chief Market Strategist at J.P. Morgan Asset Management Europe, dives into the complexities of UK fiscal policy. She analyzes the implications of removing employer national insurance exemptions for high earners and the likelihood of a Bank of England rate cut amid fluctuating inflation. Karen highlights the challenges of filling a substantial fiscal gap without overwhelming taxpayers and the potential risks associated with private credit, all while suggesting pathways to restore investor confidence post-Brexit.
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Where Interest Rates Might Settle
- Neutral interest likely sits between roughly 3% and 4% based on potential growth and the 2% inflation target.
- Ward says longer sticky inflation will delay movement toward that neutral rate.
Account For Inflation On Cash Returns
- Subtract inflation from nominal bank interest when evaluating real returns on cash savings.
- Karen Ward warns many savers mistake higher nominal rates for real gains.
Tax Hikes Can Be Counterproductive
- Tax changes can have unintended inflationary effects that raise borrowing costs.
- Ward notes past NI hikes increased costs for firms and fed through into higher interest rates.