August 10, 2023 - Taking Stock

August 10, 2023September 12, 2025

U.S. inflation July 2023 up 0.2% to 3.2%

Up slightly for the first time in a year

U.S. consumer prices rose a mild 0.2% in July, but the rate of inflation rose for the first time in more than in a year in a sign it’s going to take a while to get the cost of living fully under control. But a steady slowdown in inflation over the past year could keep the Federal Reserve on the sidelines when officials consider whether to raise interest rates again at their next meeting in September.

The yearly rate of inflation, rose to 3.2% from to 3% in the prior month. It’s the first increase in 13 months, though inflation has eased considerably since hitting a 40-year high of 9.1% in 2022. The core rate of inflation, which omits volatile food and energy costs, also rose 0.2% last month.

The increase in core inflation over the past year slowed slightly to 4.7% from 4.8%. That’s the lowest rate in almost two years. The Fed doesn’t ignore food and energy prices, but the central bank views the core rate as a better predictor of inflation trends. Even so, the core rate of inflation remains well above the Fed’s 2% goal.

Rapid rate rise

Over the past year the U.S. central bank has been raising interest rates rapidly to try to slow the economy and dampen inflation, but it’s unclear if the Fed will continue to do so at its next meeting in September 2023. Financial markets put the odds close to zero.

Inflation has slowed sharply in the first half of 2023, but further gains this year are unlikely to come as easy. U.S. gas (petrol) prices are on the rise again. U.S. rent and house prices are still going up. And labour costs are increasing more than 4% a year, making it harder for the Fed to achieve its inflation target.

Robust economy

The U.S. economy, for its part, is still expanding at a surprisingly robust pace. Strong consumer demand could keep prices elevated, especially for popular services such as hotel rentals, dining out and entertainment.

Whether inflation is still rising too fast for the Fed to necessate another rate hike in September remains to be seen, for now.

August 10, 2023September 12, 2025

Hack Attack! UK’s electoral registers stolen

The UK’s elections watchdog has revealed it has been the victim of a complex cyber-attack potentially affecting millions of voters.

The Electoral Commission said unspecified ‘hostile actors‘ had managed to gain access to copies of the electoral registers, from August 2021. Note the word ‘unspecified’ is used – do they even know?

Hackers also broke into its emails and “control systems” but the attack was not discovered until October last year. The watchdog has warned people to watch out for unauthorised use of their data.

The commission said hackers accessed copies of the registers it was holding for research purposes, and for conducting checks on political donors. The commission knew which of its systems were accessible to the hackers, but could not ‘conclusively‘ identify which files may have been accessed.

‘Very sophisticated’ attack

The personal data held on the registers – name and address – did not itself present a ‘high risk‘ to individuals, it added, although it is possible it could be combined with other public information to ‘identify and profile individuals’.

It has not said when the hackers’ access to its systems was stopped, but said they were secured as soon as possible after the attack was identified in October 2022. Why was it left so long to be made public and how long did it take to make systems secure again?

Explaining why it had not made the attack public before now, the commission said it first needed to stop the hackers’ access, examine the extent of the incident and put additional security measures in place.Defending the delay, commission chair John Pullinger said: “If you go public on a vulnerability before you have sealed it off, then you are risking more vulnerabilities.” He is reported to have said the ‘very sophisticated attack involved using software to try and get in and evade our systems’. Well, that clearly worked then.

He reportedly said that the hackers were not able to alter or delete any information on the electoral registers themselves, which are maintained by registration officers around the country. Information about donations and loans to political parties and registered campaigners is held in a system that is not affected by this incident, the notice added. He understood public concern, and would like to apologise to those affected.

Steps

The commission added that it had taken steps to secure its systems against future attacks, including by updating its login requirements, alert system and firewall policies. The Information Commissioner’s Office, which is responsible for data protection in the UK, said it was urgently investigating.

Labour’s deputy leader Angela Rayner reportedly said: ‘This serious incident must be fully and thoroughly investigated so lessons can be learned‘. Why wouldn’t it be investigated? I dislike it immensely when clueless politicians roll out this ‘standard remark’ as an attempt to demonstrate they ‘know what’s going on’.

Then what? It happens again and we have to… learn more lessons…?

Step up the security – we have the ability!

August 10, 2023September 12, 2025

‘Neither a borrower nor money lender be’.

William Shakespeare 1564 – 1616

The phrase, ‘neither a borrower nor money lender be’ is a famous quote from William Shakespeare’s play, Hamlet, spoken by the character Polonius to his son Laertes. Polonius is giving his son some advice before he leaves for Paris, and he tells him not to lend or borrow money from anyone, because it can ruin friendships and lead to financial troubles.

Quote

‘Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry’.

The phrase means that we/you should be self-reliant and prudent with your money, and avoid getting into debt or lending money to others. It implies that borrowing and lending can cause resentment, dishonesty, and loss of trust between people. It also suggests that borrowing can make you lazy and wasteful, while lending can make you lose both the money and the friend. Thats’s true!

Relevant

The phrase is still relevant today, as many people face the challenges of managing their finances and dealing with debt. It is often used as a proverb or a piece of wisdom to warn people against the dangers of borrowing and lending money. However, some people may disagree with the phrase, and argue that borrowing and lending can be beneficial in some situations, such as when one needs to invest in education, business, or emergency needs. They may also point out that borrowing and lending can strengthen relationships if done with honesty, generosity, and gratitude.

August 10, 2023September 12, 2025

Credit card debt in the U.S. reaches new high of $1 trillion

Problem?

Americans are using their credit cards more than ever, pushing the total balance to over $1 trillion for the first time in history, according to a report from the New York Federal Reserve.

The report, released August 2023, showed that credit card balances rose by $45 billion to $1.03 trillion in the second quarter of 2023, reflecting robust consumer spending as well as higher prices due to inflation. The increase was the largest quarterly gain since 2008 and surpassed the previous record of $1.02 trillion set in 2019.

The rise in credit card debt also coincided with a higher payment failure rate, which measures the share of borrowers who are at least 30 days behind on their payments. The failure measure climbed to 7.2% in the second quarter, up from 6.5% in the first quarter and the highest level since 2012.

The New York Fed reportedly said that the increase in failure rates may reflect a normalization to pre-pandemic levels, as many lenders offered relief programs and forbearance options to borrowers during the Covid-19 crisis. However, some analysts warned that the high level of credit card debt could pose a risk to the financial stability of households and the economy if interest rates rise or incomes fall.

Expensive debt

Credit card debt is one of the most expensive forms of debt, and it can quickly spiral out of control if not managed. ‘Consumers should aim to pay off their balances in full every month, or at least pay more than the minimum due, to avoid paying unnecessary interest and fees.

Interest rates and fees on credit cards are one of the highest payable and if you fall into the debt spiral it can be almost impossible to liberate yourself from that consuming debt.

Younger users

The New York Fed also noted that credit card usage has become more widespread among Americans, especially among younger and lower-income borrowers. The share of adults with at least one credit card increased from 76% in 2019 to 79% in 2021, while the share of those with four or more cards rose from 18% to 21% over the same period.

Tool

The report suggested that credit cards have become an essential tool for many consumers to access credit and smooth purchases over time, especially during periods of economic uncertainty and volatility. However, it also cautioned that credit cards can also lead to overborrowing and financial distress if not used responsibly.

It is one of the most expensive ways to borrow money and far too easy to access.