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The MJBurrows Briefing.
UK money, translated into English, in one email every weekday at 8am.
Subscribe free and get The Ultimate 50: the allowances, reliefs and discounts most people never claim. Claiming them is the best kind of admin.
briefing.mjburrows.com
UK money, translated into English, in one email every weekday at 8am.
Subscribe free and get The Ultimate 50: the allowances, reliefs and discounts most people never claim. Claiming them is the best kind of admin.
briefing.mjburrows.com
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Energy prices are the main reason interest rates went up on Thursday. The Bank of England's minutes say its rate decisions "could not influence" them.
Less daft than it sounds.
The rise to 4%, the first since August 2023, is about what energy does to everything else. The Bank around 5% by the middle of next year. Its worry is firms putting their prices up to cover the bills, then pay deals chasing those prices. The brake on that is the cost of borrowing. Two year mortgage rates had climbed nearly half a point since the start of September, as markets saw the rise coming.
The Bank can't move the oil price. It can move your mortgage.
Less daft than it sounds.
The rise to 4%, the first since August 2023, is about what energy does to everything else. The Bank around 5% by the middle of next year. Its worry is firms putting their prices up to cover the bills, then pay deals chasing those prices. The brake on that is the cost of borrowing. Two year mortgage rates had climbed nearly half a point since the start of September, as markets saw the rise coming.
The Bank can't move the oil price. It can move your mortgage.
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Thursday's rise doesn't look like the last, the Bank's governor says, unless the Middle East conflict is resolved: mjburrows.com/bank-of-englan…
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Your money works longer hours than you do.
Mortgage rates, energy bills, payslips and pensions keep shifting whether you're watching or not. I read the decisions behind them and explain what they mean for you. New articles at mjburrows.com and a free email, every th your day. I'll keep an eye on the decisions.
Mortgage rates, energy bills, payslips and pensions keep shifting whether you're watching or not. I read the decisions behind them and explain what they mean for you. New articles at mjburrows.com and a free email, every th your day. I'll keep an eye on the decisions.
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Democrats now control Congress, and crypto's stablecoin law still starts on 18 January.
The GENIUS Act passed with votes from both parties in 2025, so a change of majority does nothing to unpick it. It sets up a federal framework for payment stablecoins (crypto tokens meant to hold a steady value), and issuers must back their tokens with liquid reserves and sit under federal or state oversight. It takes effect fifteen days after the new Congress is seated, which gives lawmakers barely two weeks.
Tokenised securities (shares and similar assets recorded as crypto tokens) look sheltered too, because regulators have built that market on securities law that already exists. Peter Curley of Ondo Finance sees little reason for it to stall.
The people left waiting are DeFi (crypto services that run without a bank or broker) developers. The Clarity Act failed to advance, and Democratic proposals would extend oversight to those who design, control or profit from the interfaces people use to reach DeFi protocols.
Stablecoin issuers got a statute. Software developers got a waiting room.
The GENIUS Act passed with votes from both parties in 2025, so a change of majority does nothing to unpick it. It sets up a federal framework for payment stablecoins (crypto tokens meant to hold a steady value), and issuers must back their tokens with liquid reserves and sit under federal or state oversight. It takes effect fifteen days after the new Congress is seated, which gives lawmakers barely two weeks.
Tokenised securities (shares and similar assets recorded as crypto tokens) look sheltered too, because regulators have built that market on securities law that already exists. Peter Curley of Ondo Finance sees little reason for it to stall.
The people left waiting are DeFi (crypto services that run without a bank or broker) developers. The Clarity Act failed to advance, and Democratic proposals would extend oversight to those who design, control or profit from the interfaces people use to reach DeFi protocols.
Stablecoin issuers got a statute. Software developers got a waiting room.
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For the DeFi risk and what the regulators are already building on: mjburrows.com/stablecoin-rul…
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UK investors didn't run for the exit in October. The buyers stopped turning up.
They pulled £1bn from equity funds, the ones that invest in company shares, up from £858m in September, yet sell orders slipped 0.3% over the month. Edward Glyn, head of global markets at Calastone, said the Budget left little immediate trace on trading. October was still the sixteenth month of outflows in the last seventeen, and the ninth largest monthly exit on record.
UK focused equity funds lost £815m, taking their outflows since January to £5.3bn. North American funds lost £164m and global funds £229m.
The cash is going somewhere safe. Money market funds, which hold short term, low risk lending such as government bills and bank deposits, took in £516m, their strongest month since November 2025.
Sellers eventually run out of things to sell. Absent buyers can stay away for months.
They pulled £1bn from equity funds, the ones that invest in company shares, up from £858m in September, yet sell orders slipped 0.3% over the month. Edward Glyn, head of global markets at Calastone, said the Budget left little immediate trace on trading. October was still the sixteenth month of outflows in the last seventeen, and the ninth largest monthly exit on record.
UK focused equity funds lost £815m, taking their outflows since January to £5.3bn. North American funds lost £164m and global funds £229m.
The cash is going somewhere safe. Money market funds, which hold short term, low risk lending such as government bills and bank deposits, took in £516m, their strongest month since November 2025.
Sellers eventually run out of things to sell. Absent buyers can stay away for months.
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Trainline is paid a slice of every fare, so when the government freezes regulated fares, the slice freezes too.
Its shares fell 6.5% to below 200p after revenue slipped 1% to £233m, even though ticket sales held broadly flat at £3.3bn. Profit before tax dropped to £55.2m from £66.2m. A £4m charge linked to a Competition and Markets Authority probe into how it displays its mandatory booking fees took a bite, but the fare freeze is the drag that will outlast it. New refund rules from April 2026 also cut the refunded tickets that bring in administration fees.
There are bright spots. Digital railcard users rose 26% to 3m, and the international arm made a £6m profit against an £8m loss a year earlier.
Passengers get the frozen fare. The company selling the ticket gets the bill.
Its shares fell 6.5% to below 200p after revenue slipped 1% to £233m, even though ticket sales held broadly flat at £3.3bn. Profit before tax dropped to £55.2m from £66.2m. A £4m charge linked to a Competition and Markets Authority probe into how it displays its mandatory booking fees took a bite, but the fare freeze is the drag that will outlast it. New refund rules from April 2026 also cut the refunded tickets that bring in administration fees.
There are bright spots. Digital railcard users rose 26% to 3m, and the international arm made a £6m profit against an £8m loss a year earlier.
Passengers get the frozen fare. The company selling the ticket gets the bill.
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For the probe, the app's loyal users and where the profit is coming from instead: mjburrows.com/trainline-shar…
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Revolut is now worth $115bn, and ordinary investors still can't buy a share.
Its private price tag has risen by over 50%, in a round led by Coatue, Durable Capital Partners and Glade Brook Capital Partners. It is the first since final approval to operate as a UK bank in March, which allows Revolut to start lending formally in Britain instead of only holding and moving customers' money.
Profit rose 57% to £1.7bn in 2025, and Revolut says it has since passed 80m customers. Nik Storonsky, the chief executive, has set the next milestone at 100 million.
The stock market debut still has no date. Storonsky put it roughly two years off and prefers the US, where he argues a far bigger pool of buyers will compete harder for the shares. A joint listing in New York and London is still being weighed.
For now, London looks like the junior option in any plan Storonsky backs.
Its private price tag has risen by over 50%, in a round led by Coatue, Durable Capital Partners and Glade Brook Capital Partners. It is the first since final approval to operate as a UK bank in March, which allows Revolut to start lending formally in Britain instead of only holding and moving customers' money.
Profit rose 57% to £1.7bn in 2025, and Revolut says it has since passed 80m customers. Nik Storonsky, the chief executive, has set the next milestone at 100 million.
The stock market debut still has no date. Storonsky put it roughly two years off and prefers the US, where he argues a far bigger pool of buyers will compete harder for the shares. A joint listing in New York and London is still being weighed.
For now, London looks like the junior option in any plan Storonsky backs.
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For the licences, the profit and where London sits in the queue: mjburrows.com/revolut-valuat…
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The City cared less about the Bank of England's expected rate rise than about the paragraph that came with it.
A move from 3.75% to 4% was expected at noon, the first increase since August 2023. Consumer prices rose 3.5% in the year to September against a 2% target, so Andrew Bailey has to write to Chancellor John Healey explaining the overshoot. Gilts, the market for government borrowing, already imply close to five interest rate hikes within two years, and Goldman Sachs expects a further rise to 4.25% in February.
Huw Pill, the Bank's chief economist, has called himself sceptical of that pricing. He is usually the one pushing for higher rates, having argued for them since the Bank missed its 2% target for most of the past five years. ING's James Smith expects the Bank to commit to as little as possible, keeping another rise open without promising one.
The rise itself was close to certain, so the risk sat in the wording. An open ended Bank would make the market's pricing look like a forecast instead of a bet, which is bad news for anyone refinancing a mortgage or a business loan in 2027.
Even the Bank's usual champion of higher rates thinks the market is running ahead of him.
A move from 3.75% to 4% was expected at noon, the first increase since August 2023. Consumer prices rose 3.5% in the year to September against a 2% target, so Andrew Bailey has to write to Chancellor John Healey explaining the overshoot. Gilts, the market for government borrowing, already imply close to five interest rate hikes within two years, and Goldman Sachs expects a further rise to 4.25% in February.
Huw Pill, the Bank's chief economist, has called himself sceptical of that pricing. He is usually the one pushing for higher rates, having argued for them since the Bank missed its 2% target for most of the past five years. ING's James Smith expects the Bank to commit to as little as possible, keeping another rise open without promising one.
The rise itself was close to certain, so the risk sat in the wording. An open ended Bank would make the market's pricing look like a forecast instead of a bet, which is bad news for anyone refinancing a mortgage or a business loan in 2027.
Even the Bank's usual champion of higher rates thinks the market is running ahead of him.
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For what the wording could mean for anyone refinancing in 2027: mjburrows.com/bank-of-englan…
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Household incomes have stalled in the 2020s for three main reasons, and only one of them is a policy choice.
David Miles, chief of the Office for Budget Responsibility, told MPs that frozen tax thresholds sit alongside weak output per head since 2008 and a recent jump in energy prices. He estimated GDP per person (the size of the economy per head) would be about 30% higher had the growth rate from before 2008 continued.
He said the energy spike would weigh on household finances for three years to come, and that the freeze is "increasing the average tax take out of people's income that comes straight out of disposable income". It now runs to April 2031.
The Resolution Foundation projects real household disposable income, what households have left to spend after tax and inflation, rising 1.4% across the 2020s, against 28% in the 1990s.
Weak productivity and dear energy sit largely outside any chancellor's reach. The freeze is the one dial John Healey can turn.
David Miles, chief of the Office for Budget Responsibility, told MPs that frozen tax thresholds sit alongside weak output per head since 2008 and a recent jump in energy prices. He estimated GDP per person (the size of the economy per head) would be about 30% higher had the growth rate from before 2008 continued.
He said the energy spike would weigh on household finances for three years to come, and that the freeze is "increasing the average tax take out of people's income that comes straight out of disposable income". It now runs to April 2031.
The Resolution Foundation projects real household disposable income, what households have left to spend after tax and inflation, rising 1.4% across the 2020s, against 28% in the 1990s.
Weak productivity and dear energy sit largely outside any chancellor's reach. The freeze is the one dial John Healey can turn.
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For the three drags on your pay packet and the one the Treasury controls: mjburrows.com/obr-stealth-ta…
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The crypto industry spent $63m (~£47.0m) trying to keep Sherrod Brown out of the Senate, and Ohio looked set to send him back anyway.
Brown was projected to win despite the money ranged against him. Elizabeth Warren is expected to take the chair of the Senate Banking Committee, which has to approve crypto legislation, and whoever holds that gavel largely decides which bills get a hearing.
During talks on the failed Digital Asset Market Clarity Act, Democratic negotiators pushed for tighter controls on illicit finance, limits on officials taking a direct part in the industry, and stronger consumer protections.
Insiders still hope for a crypto tax bill, but lobbyists hold out far less hope for another attempt at a full bill rewriting who regulates the crypto market.
For $63m, the best hope left is the smaller bill.
Brown was projected to win despite the money ranged against him. Elizabeth Warren is expected to take the chair of the Senate Banking Committee, which has to approve crypto legislation, and whoever holds that gavel largely decides which bills get a hearing.
During talks on the failed Digital Asset Market Clarity Act, Democratic negotiators pushed for tighter controls on illicit finance, limits on officials taking a direct part in the industry, and stronger consumer protections.
Insiders still hope for a crypto tax bill, but lobbyists hold out far less hope for another attempt at a full bill rewriting who regulates the crypto market.
For $63m, the best hope left is the smaller bill.
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For what Warren's gavel means for the industry and the tax bill that is left: mjburrows.com/crypto-regulat…
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London will be the slowest region to bounce back from the next price fall.
Savills expects the average UK price to drop a further 1.5% in 2027, with a recovery arriving only in the second half of 2028. The blame falls on borrowing costs. Mortgage rates have climbed on the back of the war in Iran, and Emily Williams, Savills' head of residential research, says the conflict has pushed back the prospect of meaningful mortgage rate relief.
Over the five years to 2031, Savills forecasts UK prices rising 15.8%, slightly ahead of income growth of 14.4%. London manages 8.1%, against 23.3% in the North West and 22.2% in the North East.
The gap starts with price. The average London home costs more than 11 times the average salary, against about six times local pay across England's three northern regions.
Dan Hill, a Savills research associate, expects larger family homes to keep supporting demand, while flats face a tougher run.
The capital gets the widest affordability gap in the country and the slowest growth to go with it.
Savills expects the average UK price to drop a further 1.5% in 2027, with a recovery arriving only in the second half of 2028. The blame falls on borrowing costs. Mortgage rates have climbed on the back of the war in Iran, and Emily Williams, Savills' head of residential research, says the conflict has pushed back the prospect of meaningful mortgage rate relief.
Over the five years to 2031, Savills forecasts UK prices rising 15.8%, slightly ahead of income growth of 14.4%. London manages 8.1%, against 23.3% in the North West and 22.2% in the North East.
The gap starts with price. The average London home costs more than 11 times the average salary, against about six times local pay across England's three northern regions.
Dan Hill, a Savills research associate, expects larger family homes to keep supporting demand, while flats face a tougher run.
The capital gets the widest affordability gap in the country and the slowest growth to go with it.
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For the full regional table and what Savills says about flats against houses: mjburrows.com/uk-house-price…
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Asian markets have marked down AI shares over a rule that nobody has written yet.
Japan's Nikkei 225 fell 3.6% and SoftBank, an investor in OpenAI, lost 8% after Democrats won the House and the Senate. Texas, where voters worry that data centres could trigger blackouts on a power grid already under strain, was one of the upsets.
Stephen Brown, chief North America economist, said federal regulation was the larger danger because it "could delay the speed of AI adoption too". Ipek Ozkardeskaya, senior analyst at Swissquote, thinks the results could support a further rotation, with investors moving money out of technology and into other corners of the market.
The rule doesn't exist yet, but the invoice has already arrived.
Japan's Nikkei 225 fell 3.6% and SoftBank, an investor in OpenAI, lost 8% after Democrats won the House and the Senate. Texas, where voters worry that data centres could trigger blackouts on a power grid already under strain, was one of the upsets.
Stephen Brown, chief North America economist, said federal regulation was the larger danger because it "could delay the speed of AI adoption too". Ipek Ozkardeskaya, senior analyst at Swissquote, thinks the results could support a further rotation, with investors moving money out of technology and into other corners of the market.
The rule doesn't exist yet, but the invoice has already arrived.
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For the data centre fight and what the analysts say tech could be in for: mjburrows.com/ai-crackdown-d…
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