Moody's warns UK consumers are vulnerable to BoE rate hike

LONDON (Reuters) – British consumers are vulnerable to a hike in interest rates, ratings agency Moody’s said on Thursday, two weeks before the Bank of England is widely expected to hike borrowing costs for the first time in more than a decade.

British household debt levels are high and still growing, Moody’s noted in a report on the outlook for securities tied to the consumer economy.

The ratings agency’s comments came a day after the Financial Conduct Authority regulator said over four million Britons were having difficulty paying their monthly bills — especially younger consumers and renters.

“As real income declines, UK consumers are vulnerable to an economic downturn and any increases in inflation or interest rates could cause problems for household finances, especially for those on lower incomes,” said Annabel Schaafsma, managing director of structured finance for Europe, the Middle East and Africa at Moody‘s.

The Bank looks on course to deliver its first increase in borrowing costs in a decade, according to most economists polled by Reuters, reversing last year’s rate cut that followed Britain’s vote to leave the European Union. [BOE/INT]

But a majority also said they thought now was not the right time to raise rates, citing an absence of evidence that growth in the economy or wages are about to pick up significantly ahead of Britain’s divorce from the EU.

Consumer credit — which until recently was expanding at an annual rate of 10 percent — is still outpacing household income by a wide margin.

The Organisation for Economic Co-operation and Development said on Tuesday this was a “major financial stability risk” — a starker assessment than the BoE‘s.

The British central bank has said there is no overall debt bubble in Britain but has expressed concern about areas of consumer debt, such as car loans.

Moody’s said it expected the performance of securitisation deals linked to the consumer economy to weaken.

It also said residential mortgage-backed securities (RMBS) based on the buy-to-let rental market were “very sensitive” to a weaker economy and that both occupancy rates and rent were expected to decline.

The outlook for the prime RMBS sector — covering the top end of the residential market — was better because borrowers were in good financial shape, Moody’s added.

Reporting by Andy Bruce; Editing by Catherine Evans

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Reuters: Money

Queen's bank goes for younger clients as rivals try to steal crown

LONDON (Reuters) – After three centuries as banker to Britain’s rich and famous, from Charles Dickens to Queen Elizabeth II, Coutts, one of the world’s oldest banks, is trying to modernise.

Britain’s largest private bank wants to update not only its technology and ways of doing business, but also its 325-year-old brand to sell more products to more customers, tackle competition from international rivals and boost revenues.

Chief Executive Peter Flavel aims to increase Coutts’ appeal to a younger generation of wealthy Britons, including vloggers, gamers and other entrepreneurs getting rich from new technologies, as well as its traditional clients.

“We don’t want to live in the history or live in the past, we need to be modern and contemporary and relevant today,” Flavel told Reuters.

”The client base we have here is of course what you would expect, the landed estates and the gentry, that traditional wealth, and that’s a big part of what we’ve had as a bank.

“But the bigger part of what we do today is banking entrepreneurs and helping them develop their businesses.”

Australian-born Flavel, previously CEO of private wealth management at JP Morgan (JPM.N) in Asia and global head of Standard Chartered’s (STAN.L) private bank, was brought in by parent Royal Bank of Scotland (RBS.L) 18 months ago.

Since his arrival, he has pushed for stronger cooperation between the private bank and the universal services offered by RBS.

He has also been exploring more quirky ways to update Coutts’ image.

One of these more off-beat projects is the expansion of a roof garden at Coutts’ central London headquarters, adding fresh fruit and vegetable patches and three bee hives, which produce Coutts-branded honey soon to be given out to new customers.

“We’re having a bit of a think about how we might just be a little different,” Flavel said.

“Banks are serious and boring and risk averse. You can create that little sense of not taking yourself too seriously at – and this is the big one – the appropriate time, because you’re dealing with people’s money.”

Flavel has focussed on tapping RBS’s commercial bank for client referrals, which has helped to broaden its customer base.

Entrepreneurs now make up a growing portion of its business, and outside of London account for 80 percent of the client base.

Coutts is adding 1,700-1,800 new clients annually. But RBS’s wealth management division has struggled to translate a 2.8 percent increase in customer deposits in the first half of this year into revenues, which fell by around 3 percent.

“Private banking is not a volume game,” Flavel said. “New clients are interesting but new clients with significant amounts of their relationship with us are much more interesting.”

Doormen are seen at the entrance to Coutts private bank in London, Britain October 10, 2017. REUTERS/Peter Nicholls

To that aim, the bank’s specialist advisers now have to work across traditional product silos to try to tap into the whole spectrum of their clients’ financial needs, from borrowing to wealth management.


But Coutts also now faces competition from international rivals, including Deutsche Bank (DBKGn.DE) and Julius Baer (BAER.S), which are expanding private banking in Britain.

After suffering big losses at their investment banks from huge bets on the U.S. housing market and costly legal settlements, many European lenders are turning to private banking in the hope that the traditionally low-risk business can provide more stable returns.

But the business of managing the fortunes of the world’s wealthy is not without its challenges.

Many clients are still risk adverse even 10 years on from the financial crisis, while the increased competition from traditional banks as well as online platforms is putting pressure on the amount banks can charge for their services.

Slideshow (5 Images)

Private banking accounts for less than 5 percent of the profits of state-backed RBS, which chose to keep Coutts through a major restructuring over the past decade. But it sold off Coutts’ international operations in 2015, leaving it to focus solely on Britain’s wealth market, worth about 825 billion pounds.


Since its establishment in 1692, the core of Coutts’ business has been looking after the wealth of Britain’s aristocracy, landed gentry and celebrities.

The latter includes sports stars – a significant number of the England football team for instance.

But when it comes to attracting up-and-coming wealth, Sebastian Dovey, analyst at wealth management research firm Scorpio Partnership, said Coutts has a challenge ahead.

“They (Coutts) can play the prestige card … but that doesn’t rub so well now as perhaps it used to,” he said.

“We’re in a much more abrasive consumer market. They’re top quartile but they have to understand that they don’t have a natural right to winning entrepreneurs.”

Helped by cost-cutting, RBS’s private banking division boosted its operating profit by about 60 percent to 82 million pounds in the first half of the year, but its cost-income ratio remains high, at 72.3 percent.

For Flavel, some small costs are worth absorbing to enhance clients’ experience, such as exchange rate fees for users of its multi-currency card.

Coutts is also spending 20 million pounds a year on digital initiatives, including a new online platform launched earlier this year that lets clients execute their own investments.

“We need that mixture of the history and the future,” Flavel said. “That’s exciting and a bit of a challenge at the same time.”

Writing by Emma Rumney. Editing by Jane Merriman

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Reuters: Money

More Millennials Becoming Homebuyers

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Couple reading paperwork in new house

Members of the millennial generation have actually been slammed for bad spending and conserving routines in the face of big student financial obligation problems. Others have actually scolded them for depending on the “Bank of Mom and Dad.”.
A brand-new credit record from Fannie Mae recommends that more millennials are ending up being house owners.
Fannie Mae– a government-sponsored business that assurances and purchases home mortgages– states in the file that the variety of young property owners has actually been reducing for years, other than throughout the real estate boom from 2000 to 2005.
The Great Recession and its after-effects sped up the decrease in homeownership amongst more youthful individuals.
Information from the united states Census Bureau’s American Community Survey reveal that the variety of owner-occupants in between the ages of 25 and 34 dropped by approximately 300,000 every year in between 2007 and 2012 in spite of the young person population growing throughout that time duration.
The reduction in the variety of young property owners began to slow in 2013, when it fell by less than 100,000. In 2014’s figure was “basically flat,” according to Fannie Mae’s credit record.
Exactly what’s next? According to the credit report:.
Considered that the young-adult population is anticipated to continue broadening quickly throughout the 2nd half of the years, it would take just modest additional enhancements in homeownership rate patterns for the variety of young house owners to go back to development.
If such a go back to modest development amongst young house owners takes place, it might have a number of ramifications for the real estate market, the Fannie Mae file notes, consisting of:.
– Creating the have to change the size, type and geographical area of brand-new real estate building.
– Expanding education and therapy efforts targeted at unskilled property owners.
– Stepping up efforts to supply innovations and services ideal for young property buyers.


Throw a No-Spend Holiday Party — Savings Experiment

Throw a No-Spend Holiday Party

It’s simple to toss a terrific vacation celebration without investing a great deal of money? Here’s how.
Something as easy as a homemade cider and vacation cookie celebration can assist you conserve huge. Simply bake an additional batch of cookies and leave them unfrosted. Set up a cookie embellishing station with tubes of icing, and bowls of sprays.
This low expense event is simply one innovative method to conserve. Host a high-concept Gingerbread Home Celebration if you desire to take your dessert embellishing an action even more. Have your visitors bring things like sweet walking sticks and chocolate morsels and have a good time getting crafty on a budget plan.
Keep in mind: tossing an innovative vacation dessert celebration can cause some extremely sweet cost savings.

The 15 Biggest ‘Shark Tank’ Success Stories of All Time

Business Tips from Shark Tank's Barbara Corcoran

Business owners who make it onto a “Shark Tank” episode have the chance to present their business to a seeing audience of 7 million possible clients.
The business that land a handle several of the program’s financiers then have the opportunity to scale and, in many cases, end up being a nationally acknowledged brand.
We checked out old episodes and asked the Sharks themselves about their most effective offers. Keep reading to find out about the greatest “Shark Tank” success stories up until now.
Scrub Daddy

scrub daddy

A sponge business has by far end up being the greatest “Shark Tank” success story. Over the previous 3 years, Scrub Daddy has actually added an overall of $ 75 million in profits, according to financier Lori Greiner.
Greiner negotiated with its creator and CEO Aaron Krause in Season 4 for $ 200,000 in exchange for 20 % equity. At that point, Krause had actually had a hard time to reach $ 100,000 in sales over 18 months, however Greiner saw terrific possible in the business’s trademark offering, an exclusive smiley-faced sponge that was more long lasting, sanitary, and reliable than a standard one.
She assisted Krause broaden his product and brought them onto QVC and shops like Bed Bath & Beyond, where they have actually ended up being bestsellers.
Tipsy Elves

Tipsy Elves
When Robert Herjavec invested $ 100,000 for 10 % of Evan Mendelsohn and Nick Morton’s awful Christmas sweatshirt business in Season 4, it might appear to audiences that he was banking on a short lived trend. It ended up, however, to be his most lucrative “Shark Tank” financial investment, he informed Business Insider.
To remain ahead of patterns, Herjavec assisted make Tipsy Elves a year-round novelty clothing business that can capitalize off numerous vacations and college football season.
Prior to its 2013 “Shark Tank” look, Tipsy Elves made $ 900,000 in yearly earnings; in 2014 it added around $ 8 million, and this year it’s on track making $ 15 million.

“Shark Tank”/ ABC.
In Season 5, Charles Yim got a five-Shark offer for Breathometer, a portable breathalyzer that deals with a mobile phone. Mark Cuban, Kevin O’Leary, Daymond John, Herjavec, and Greiner participated a $ 650,000 offer for 30 % of the business.
Considering that his “Shark Tank” look, Yim received an added $ 6.5 million in financing, partnered with the respected Cleveland Clinic, and established a more precise and more portable primary item in addition to a gadget that tracks oral health and hydration levels.
Yim informed Inc. Breathometer is anticipated to end 2015 with $ 20 million in sales, double in 2014’s number.
Bubba’s-Q Boneless Ribs.

Shark Tank.
Al “Bubba” Baker, 1978 NFL Defensive Rookie of the Year, protected a handle John in Season 5 for $ 300,000 in exchange for 30 % equity in and licensing rights to his business, Bubba’s-Q Boneless Ribs.
John informed Business Insider that as somebody who developed a profession in fashion, he never ever anticipated that his most rewarding financial investment would remain in a rib company.
John assisted Baker protect a handle a massive food processing plant and stated he believes he can quickly get Bubba’s-Q to end up being a nationwide brand with $ 200 million in lifetime sales.
Grace and Lace.

“Shark Tank”/ ABC.
In Season 5, Barbara Corcoran invested $ 175,000 for 10 % of husband-and-wife duo Melissa and Rick Hinnant’s fashion business Grace and Lace. Corcoran informed Business Insider that it’s her most rewarding “Shark Tank” financial investment.
Prior to their look, the Hinnants generated about $ 1 million in sales. They are now anticipating $ 6.5 million this year, an increase assisted by a look in Cosmopolitan publication.
As the business has actually grown, its humanitarian objective has too, and considering that appearing on the program it has actually utilized earnings to open 2 orphanages in India, real estate an overall of 100 kids.
10 Thirty One Productions.

10 Thirty One Productions.
In Season 5, Cuban chose to set up $ 2 million for 20 % of Melissa Carbone’s live scary home entertainment business Ten Thirty One Productions.
In 2014 the business generated $ 3 million in income, and although he did not divulge a precise number, Cuban informed us it is making a minimum of half a million dollars in yearly revenue.
10 Thirty One had another effective Halloween season this year in its birth place of Los Angeles, however had a hard time in its growth to New York City due to an absence of prep work for storm conditions. Carbone stated it was a important however demanding knowing experience, and she anticipates broadening to Cuban’s home town, Dallas, next year.
Wicked Good Cupcakes.

Wicked Good Cupcakes.
Tracey Noonan and Danielle Vilagie are a mother-daughter duo from Boston with a business that makes cupcakes in a container. In Season 4, they negotiated with O’Leary where he invested $ 75,000 for royalties rather of equity. He made $ 1 from every cupcake offered till he made his refund, and after that started getting 50 cents per cupcake offered.
Because its look on the program, Wicked Good Cupcakes has actually broadened to a brand-new production center and a few brand-new places.
O’Leary stated it’s been his most successful financial investment of the program, and given that Noonan and Vilagie appeared, they’ve gone from around $ 7,000 in month-to-month sales to $ 400,000 (or about $ 4.8 million yearly).
Red Dress Boutique.

“Shark Tank”/ ABC.
Herjavec and cuban split a $ 1.2 million financial investment for 10 % equity in Diana and Josh Harbour’s online females’s fashion merchant The Red Dress Boutique in Season 6, with Cuban taking the lead advisory function.
In the week following their tv look, the husband-and-wife group added $ 1 million in sales, however likewise could not stay up to date with need. Cuban assisted them with facilities concerns, and in 2014 they added $ 14 million in profits.
Cuban stated it’s making a minimum of half a million dollars in yearly earnings.

In Season 6, Bombas cofounders offered John a 17.5 % stake in their business for $ 200,000. It is an online-only athletic sock business that contributes a pair of socks to a homeless shelter for every single pair offered.
Bombas’ creators informed radio host Jason Bax that they offered $ 400,000 of socks in the 4 days after their tv look and ended 2014 with $ 2 million in sales.
John stated it is among his most successful financial investments.
Simple Sugars.

“Shark Tank”/ ABC.
When she got in the tank in Season 4 to pitch her skin care business Simple Sugars, Lani Lazzari was simply 18 years old. She wound up negotiating with Cuban for $ 100,000 in return for 33 % equity.
Within simply 24 hours of her episode’s premiere, Lazzari’s sales jumped to $ 220,000 from $ 50,000, and she struck $ 1 million 6 weeks later on. Today Simple Sugars items remain in more than 700 retail places and ship globally.
In 2014 the business generated more than $ 3 million in income, and Cuban stated it’s one of his most rewarding financial investments from the program.

“Shark Tank”/ ABC.
Husband-and-wife group Brian and Julie Whiteman entered into the tank in Season 3 to present GrooveBook, a digital picture membership service. For $ 2.99 a month, users get a bound book of high-resolution pictures they took with their mobile phones. The creators negotiated with Cuban and O’Leary for $ 150,000 in exchange for 80 % of licensing revenues, with O’Leary taking the lead advisory function.
Not just did the Whitemans gain 50,000 customers soon after the premiere of their episode, however last November, the openly traded business Shutterfly purchased GrooveBook for $ 14.5 million.
Cousins Maine Lobster.

“Shark Tank”/ ABC.
Cousins Sabin Lomac and Jim Tselikis delivered lobster from their house state of Maine to their brand-new house in California and began a high-end food truck called Cousins Maine Lobster, which ended up being understood for its lobster rolls. The cousins negotiated with Corcoran for $ 55,000 in exchange for 15 % of their business in Season 4.
Quickly after their episode premiered, the business struck $ 700,000 in sales. In 2014 they added $ 8 million in profits, according to Entrepreneur.
Bottle Breacher.

“Shark Tank”/ ABC.
Previous Navy SEAL Eli Crane and his spouse and company partner Jen negotiated with Cuban and O’Leary for $ 150,000 in exchange for a 20 % stake in Bottle Breacher, a business staffed by military veterans who turn dummy.50 quality bullets into stylized bottle screw.
O’Leary has actually taken the lead brand ambassador function and stated it’s one of his most lucrative financial investments. It’s remained to grow to fulfill enhancing need, and has actually made more than $ 2.5 million in sales this year.

“Shark Tank”/ ABC.
Herjavec invested $ 350,000 for 10 % of Max Gunawan’s foldable, magnetic light business Lumio in Season 6 after calling him “perhaps the very best business owner” he had actually seen up until now on the program.
In 2014 Lumio made $ 3 million in sales, striking that mark once more this previous June, he informed Forbes. He described that his development is healthy which he will remain to make distribution handle shops that attract a high-end, creative audience.

“Shark Tank”/ ABC.
Rick Hopper basically handed the reigns of ReadeRest over to Greiner when he consented to a $ 150,000 financial investment in exchange for 65 % of the business in Season 3, however it turned his little one-man program into a big success.
The item, a magnetic clip that holds spectacles in location on a t-shirt, routinely offers out on QVC. In 2014, Hopper stated that he’s made over $ 8 million in overall sales given that his “Shark Tank” look.

10 Easy Tax Moves You Should Make Now to Increase Your Tax Refund


Tax Time spelled out on a calculator.

With the vacations around the corner, the majority of us are concentrated on decking the halls or charting out our New Year’s resolutions. The end of the year is likewise the perfect time to take actions that might decrease your tax costs.

When you submit next year, here are 10 simple and fast ideas you must make prior to the end of the year to enhance your tax refund.
1. Collect invoices and kinds.
It might appear a little early, however event invoices for tax deductible expenditures and income sources for the previous year will keep you arranged and guarantee you do not forget anything when you take a seat to do your taxes.
2. Defer benefits.
All your effort settled this year, and you are anticipating a year-end reward, however this money in your pocket might bump you as much as a greater tax bracket and enhance your tax liability. See if your company will pay your perk in January if you can hold off on getting that additional earnings this year. You will still get it near year-end, however you will not need to pay taxes on it when you submit your 2015 taxes.
3. Contribute to charity.
You can assist somebody in requirement and gain advantages of a tax reduction for contributions to a certified charitable company by Dec. 31. Even if you make a contribution by credit card, you do not have to pay it off in 2015 to get the tax reduction.
4. Take a class.
However you might likewise enhance your tax refund if you take a course to advance your profession you might not just see an increase in your income. Spending for next quarter’s tuition by Dec. 31 might offer you an important tax credit as much as $ 2,000 with the Lifetime Learning Credit.
5. Maximize your retirement.
Another terrific method to decrease your taxable earnings and construct your nest egg is to make a contribution to your retirement cost savings account. Whether you contribute to a 401(k) or a conventional IRA, you can take a dollar for dollar reduction in your earnings and likewise conserve for the future.
6. Take the saver’s credit.
The saver’s credit, likewise referred to as the Retirement Savings Contribution Credit, is an unique tax break offered for low- to moderate-income earners who support their retirement strategies. The credit depends on $ 1,000 ($ 2,000 if you’re wed filing collectively), and you can assert it in addition to your tax reductions for a standard 401(k) or IRA contribution.
7. Invest your FSA.
Now is the time to take care of those physician’s sees you’ve been putting off if you have a versatile spending account and you have cash left. You might just be able to bring over up to $ 500 into your 2016 FSA if you have unused cash in your FSA account on Dec. 31. Depending upon your strategy, there might be a grace duration to utilize your funds in the start of next year.
8. Balanced out financial investment gains.
In order to take benefit of this, you will require to offer the losing financial investments and offset your losses versus your gains. Any additional will then be passed onto the next tax year.
9. Price quote your family earnings for medical insurance.
If so, you will have to forecast your 2016 family earnings and household size when you use. Start looking into any modifications that might take location in 2016 (growing your household, task promo, heading into retirement, and so on).
10. Enhance your innovative premium tax credit.
If you got help for medical insurance through a sophisticated premium tax credit, one wise step you can make is to decrease your adjustable gross earnings by adding to your retirement strategy, which might enhance the premium tax credit you’re qualified for at tax time. If you are buying brand-new insurance coverage in the marketplace you can likewise ask for to take half of your support to assist spend for insurance coverage upfront and ease needing to pay anything back if you experience modifications to your earnings.