Personal Finance: Some assurance for US bulls

It is that time of the month when the Government starts throwing statistics at us so we can gauge the state of the economy. There are those who consider we take our own temperature too often, but regular statistics do at least demonstrate a trend. And there are two worrying trends here in the UK at present: rising wage settlements and consumer spending.

In a way, we should not be too surprised over the trend in wage settlements. Even if the Government has not loosened the reigns since it took power, there is the perception that things have changed and years of difficult wage negotiating, in which employers have been backed by a parsimonious administration, have come to an end.

Moreover, the economy is buoyant. With senior managers and company directors benefiting, why should workers not have a slice of this particular cake too? But it has worried enough of the Bank of England's Monetary Policy Committee to ensure a split vote over holding down interest rates.

The funny thing is that in the US, where unemployment is even lower than here, wage settlements remain subdued. Perhaps the workers there are all too aware of the threat the wounded Asian tigers could present. And interest rates continue to fall in America. Another threat could be over the horizon, though. Or is it an opportunity?

The relative buoyancy of retail sales here is a recent phenomenon. Up until less than a year ago people were still reluctant to spend, despite a strong economy. Then came the windfalls, delivering an estimated pounds 30bn to Middle England, as building societies and life companies demutualised.

In America, of course, everything is always bigger. So it is with personal finance. It seems the American life assurance industry is poised to restructure in a move that will deliver billions of dollars of shares to as wide a range of recipients as benefited in the UK.

Prudential of America has already announced the intention to start the ball rolling. If listed in New York, Prudential is likely to be the tenth-largest company, with a market capitalisation extending into hundreds of billions of dollars. Makes even Halifax look small beer.

And this could be only the beginning. Metropolitan Life, the second- biggest life assurer - with assets above$170bn, is likely to follow suit. Prospects look exciting.

All this will take a couple of years but it heralds a restructuring of the US life assurance industry every bit as dramatic as what happened here.

The wealth that it will thrust into the hands of Americans does not bear thinking about. It could trigger a spending boom. But then again, it should help support the stock market. Given the way personal savings have boomed over the past decade in the US, this could add to the wealth locked away for the future. Maybe those long-term bulls of American shares have got it right.

Brian Tora is chairman of Greig Middleton Investment Strategy Committee.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Life and Style
Couples have been having sex less in 2014, according to a new survey
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Blahnik says: 'I think I understand the English more than they do themselves'
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam