“Never let a good crisis go to waste,” Winston Churchill once said — and many international investors may be wondering if they should heed the late wartime prime minister's words and take advantage of the financial crisis that threatens to engulf the UK.
The country is in an economic mess. Worse, it is largely self-inflicted, as new Prime Minister Liz Truss makes a misguided start to her tenure.
On September 23, Chancellor Kwasi Kwarteng stood up to deliver a mini-budget aimed at driving the country's economy back to its long-term trend growth rate of 2.5 per cent a year.
Instead, he plunged it into chaos, destroying investor confidence, crushing the pound and almost triggering a pensions meltdown.
While Mr Kwarteng on Monday bowed to widespread pressure and scrapped the plan to abolish the 45 pence income tax rate for high earners, the mini-budget remains a nightmare for Britons and could end 12 years of Conservative rule. But is it also a buying opportunity for overseas investors?
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Watch: UK Prime Minister Liz Truss defends economic plan
Suddenly, UK assets are going cheap. Stock markets are down, bond prices are tumbling and Credit Suisse reckons property prices could fall by 10 per cent to 15 per cent. For those with US dollars, UK assets are already more than 20 per cent cheaper, in currency terms as the greenback soars.
So what’s gone wrong and how bad — or good, depending on your perspective — can things get?
Mr Kwarteng's “fiscal event”, as he labelled it, was a masterpiece of bad timing.
Ms Truss had just announced an energy bills support package that could cost a staggering £150 billion ($168.1bn), which will be added to the nation's debt rather than funded by a windfall tax on oil and gas companies.
The last thing international investors needed to hear was that the UK was going to borrow another £72bn to fund tax cuts for the super-rich.
Allowing bankers to pay themselves bigger bonuses and initially scrapping 45 per cent income tax band was never going to be popular. But to launch it at a time when millions are facing the choice between eating and heating their homes was a fiasco.
The Tories are plunging in the polls, but the real threat comes as international investors vote with their feet.
The UK is unusual as it relies on overseas buyers to finance almost half of its government debt, to the tune of about £70bn a year. Former Bank of England governor Mark Carney once called it “relying on the kindness of strangers”.
Ms Truss and Mr Kwarteng have abused that kindness, with foreigners reluctant to buy government debt from a country whose leaders appeared to have lost all fiscal sense.
Last Wednesday, yields on 30-year UK government bonds, known as gilts, soared from 3.6 per cent to almost 5.2 per cent as investors demanded a higher return. One year ago, 30-year gilts yielded just 1.33 per cent.
When bond yields rise, bond prices fall. This almost smashed the nation’s £1.5 trillion workplace pensions system, as trustees found their bond holdings no longer matched their liabilities and had to sell them in a panic to raise cash.
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Cost of living crisis in the UK — in pictures
BoE governor Andrew Bailey stepped into prevent ruinous financial contagion with a pledge to buy £65bn of his own gilts.
The central bank's intervention has given embattled buyers a reason to step back into the market, says Chris Beauchamp, chief market analyst at online trading platform IG. “This might mark the low for now in risk assets.”
The pound has recovered slightly. After threatening to fall to parity with the US dollar, it has crept above $1.11. Gilt yields are below 4 per cent.
An uneasy peace holds but after the recent wave of selling, there’s hope for a bounce in the short-term, Mr Beauchamp says.
However, “this doesn’t change the bleaker medium-term view”, he adds.
Perhaps surprisingly, London’s benchmark FTSE 100 index has not done that badly this year, falling “just” 7.56 per cent. That is dwarfed by the 24.1 per cent drop on the US S&P 500.
The FTSE 100 is packed with banking, energy, consumer staples and healthcare stocks that hold up well in times of weak growth and high inflation, says Jason Hollands, managing director of Bestinvest.
“It has low exposure to growth sectors like technology, communications and consumer discretionary businesses, which have sold off this year,” Mr Hollands says.
Companies listed on the index generate three quarters of their earnings overseas, so actually benefit from a weaker pound, as this boosts the value of those revenues once converted back into a weaker sterling.
The FTSE 100 also offers attractive dividends, currently yielding 4.1 per cent a year against 1.69 per cent on the S&P 500. It is much cheaper than the US, trading at 14 times earnings against around 27 times.
Nobody expects the FTSE 100 to take off like a rocket but it does have its attractions, says Victoria Scholar, head of investment at Interactive Investor. “It offers steady growth and income prospects for long-term investors.”
As with all UK assets, it is also cheaper for dollar buyers, as the pound has fallen an incredible 21.11 per cent against the greenback.
Sterling is not the only currency on the rack. The euro is down 15.74 per cent against the dollar year-to-date, while the Japanese yen has fallen 25.43 per cent against the greenback.
If you earn dollars or dollar-pegged currencies such as the UAE dirham, everywhere is cheap at the moment.
A more exciting question is whether now is the time to buy UK property.
The UK property market has been astonishingly resilient, with prices rising another 11.5 per cent in the 12 months to August despite this year’s woes.
That may change as the mortgage market is in disarray. When gilt yields rocketed, lenders pulled more than 3,000 fixed-rate deals, which were suddenly impossible to price.
Markets expect the BoE to hike base lending rates from today’s 2.25 per cent to 6 per cent, to save the pound and curb inflation.
That would add £7,500 a year to the cost of servicing a £200,000 variable rate mortgage, at a time when millions are struggling to financially cover food and fuel costs. Many will be forced to sell their homes, but could find buyers in short supply.
As mortgage rates rocket and choice shrinks, the market is under pressure, says Tomer Aboody, director of property finance lender MT Finance. “We are seeing a shift in sentiment and the move to a buyers’ market. Sellers no longer call the shots.”
Prime properties, especially within the London area, should sustain values as foreign buyers take advantage of the weaker pound
Tomer Aboody,
director of property finance lender MT Finance
Buying UK property is also slightly cheaper, as Mr Kwarteng cut stamp duty in his mini-budget, saving buyers up to £2,500.
But those expecting to bag a prime bargain may be disappointed, Mr Aboody says. “Prime properties, especially within the London area, should sustain values as foreign buyers take advantage of the weaker pound.”
Anybody buying UK assets today must brace themselves for further volatility, says Joshua Raymond of currency broker XTB. “The Bank of England is applying plasters on the financial wounds created by the Truss government.”
The central bank’s £64bn intervention only lasts until October 14. If Ms Truss and Mr Kwarteng have not relented by then, the crisis could intensify.
Global investors will not want to let today's crisis go to waste but nor should they rush in either.
This could have a lot further to run and if it does, buyers could find even bigger bargains in the months ahead, especially in the nation’s property market.
UAE v IRELAND
All matches start at 10am, and will be played in Abu Dhabi
1st ODI, Friday, January 8
2nd ODI, Sunday, January 10
3rd ODI, Tuesday, January 12
4th ODI, Thursday, January 14
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company%20profile
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Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%202-litre%204-cylinder%20turbo%20and%203.6-litre%20V6%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESeven-speed%20automatic%0D%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20235hp%20and%20310hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E258Nm%20and%20271Nm%0D%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh185%2C100%0D%3Cbr%3E%3C%2Fp%3E%0A
Juvenile arthritis
Along with doctors, families and teachers can help pick up cases of arthritis in children.
Most types of childhood arthritis are known as juvenile idiopathic arthritis. JIA causes pain and inflammation in one or more joints for at least six weeks.
Dr Betina Rogalski said "The younger the child the more difficult it into pick up the symptoms. If the child is small, it may just be a bit grumpy or pull its leg a way or not feel like walking,” she said.
According to The National Institute of Arthritis and Musculoskeletal and Skin Diseases in US, the most common symptoms of juvenile arthritis are joint swelling, pain, and stiffness that doesn’t go away. Usually it affects the knees, hands, and feet, and it’s worse in the morning or after a nap.
Limping in the morning because of a stiff knee, excessive clumsiness, having a high fever and skin rash are other symptoms. Children may also have swelling in lymph nodes in the neck and other parts of the body.
Arthritis in children can cause eye inflammation and growth problems and can cause bones and joints to grow unevenly.
In the UK, about 15,000 children and young people are affected by arthritis.
More on Quran memorisation:
THREE
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What is a Ponzi scheme?
A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Killing of Qassem Suleimani
Killing of Qassem Suleimani
Global state-owned investor ranking by size
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China
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UAE
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Japan
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
The studios taking part (so far)
- Punch
- Vogue Fitness
- Sweat
- Bodytree Studio
- The Hot House
- The Room
- Inspire Sports (Ladies Only)
- Cryo
Q&A with Dash Berlin
Welcome back. What was it like to return to RAK and to play for fans out here again?
It’s an amazing feeling to be back in the passionate UAE again. Seeing the fans having a great time that is what it’s all about.
You're currently touring the globe as part of your Legends of the Feels Tour. How important is it to you to include the Middle East in the schedule?
The tour is doing really well and is extensive and intensive at the same time travelling all over the globe. My Middle Eastern fans are very dear to me, it’s good to be back.
You mix tracks that people know and love, but you also have a visually impressive set too (graphics etc). Is that the secret recipe to Dash Berlin's live gigs?
People enjoying the combination of the music and visuals are the key factor in the success of the Legends Of The Feel tour 2018.
Have you had some time to explore Ras al Khaimah too? If so, what have you been up to?
Coming fresh out of Las Vegas where I continue my 7th annual year DJ residency at Marquee, I decided it was a perfect moment to catch some sun rays and enjoy the warm hospitality of Bab Al Bahr.
UAE currency: the story behind the money in your pockets
