Herald - Issue 423

Page 56 • The HERALD • 12th May 2022 v THE HERALD - Proud to be part of your community v ASK A PROFESSIONAL YATES & CO Chartered Accountants Specialists in providing accounting and taxation advice to small businesses and individuals Contact: Colin Yates A.C.A. Telephone: (023) 8086 1550 E-mail: enquiries@yatesco.co.uk Personal and Friendly Service latter, consumers have been on a spending spree a er having spent a large proportion of time during 2020 and 2021 at home. e main reason for the current rise is due to the global price of energy. is has meant higher energy and transport bills for businesses, many of whom pass on the extra costs to their customers. Supply problems and higher shipping costs are also continuing to have an impact on businesses. Central banks kept saying that in ationwas ‘transitory’, but this now seems to have been replaced by the word ‘persistent’. e result is that in ation will remain high on the economic agenda in 2022. In ation is a measure of how much prices have gone up over time. It’s the rate at which cash becomes less valuable – £1 this year will get you further than £1 next year. e Bank of England (BoE) recently announced in ation of 7% from spring 2022 and then start to come down a er that. at’s because most of the causes of the current high rate of in ation hopefully won’t last. It’s unlikely that the prices of energy and imported goods will continue to rise as rapidly as they have done recently. And this means that in ation will eventually decline. e BoE forecasts the rate to be much closer to their 2% target in two years’ time. But even though the rate of in ation will slow down, the prices of some things may stay at a high level compared with the past. Beating in ation means earning higher returns from an investment than the in ation rate in the economy. If your return on investment is less than the in ation rate, this could basically nullify the returns you have earned. Due to various reasons, the purchasing power of money decreases signi cantly every year. Investing with in ation in mind is essential for protecting your current and future wealth and involves choosing assets that naturally keep pace with rising prices. To discuss how Oyster can help you please do get in touch on 023 8084 8410 or pop in to our o ce opposite the old Lloyds Bank in central Hythe. Invest Your Way Out of Inflation by Michael Osman, Oyster Financial Planning e word ‘in ation’ has barely featured in the last three decades but now it’s suddenly back with a vengeance in 2022. erefore, nding ways to generate a return on investments greater than in ation will be a key investment theme – otherwise your wealth falls in real terms. ere are two basic reasons why in ation has been increasing: supply and demand. Starting with the Michael Osman, Oyster Financial Planning