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The Financial Ironmonger Blog No 22/2019

The Financial Ironmonger Blog No 22/2019

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.


The results of the European Parliament elections, in the UK, were much as expected. The newly formed Brexit party captured the largest number of seats, with the two mainstream contenders, Conservative and Labour getting a severe drubbing. Labour lost its only representative in Scotland, where, until recently, it had a total stranglehold. Without that support base, it is very unlikely that they could win a General Election.

Both the Liberal Democrat and Green parties scored significant gains, recipients of those voters who hate the idea of Brexit and wanted to protest at the incumbent political structure. The former were last elected to government in 1906, (you read that right), and since then have had the privilege of promising everything to everyone in the certain knowledge that they would never be held to account.

Finally, and fatally, the lure of government office proved too great for them, and they were sucked in to a minority position in the coalition with the Conservatives in 2010, ending more than a century in the wilderness. Their one flagship policy, abolishing student fees, (then £ 3,000 a year), went on the bonfire of austerity with them agreeing to an increase to £9,000, which the Conservatives knowing that it would totally destroy them, correctly, as it proved. The alternative Greens have never made any noticeable impact.

Across Europe, there were gains for insurgent parties, but nothing that would really rock the boat. In the middle of all of this, the UK Prime Minister finally resigned, bringing hope that a fresh face could make a difference. The old Chinese proverb, “be careful what you wish for”, instantly came to mind, and there is a slight longing for the days of total paralysis of the May government, when you were guaranteed that nothing of any import was likely to happen, bar trying to guess the day of her departure.

Then, like a ghost at a wedding, she reappeared to announce a new flagship policy on student loans, which are to be reduced to £7,500 a year, and the repayment period lengthened from 30 to 40 years. That this failed to hit any of the salient points might explain the lack of applause, from any side. The interest rate on these loans is 6.3%, terrifying when compounded, whilst the Government can borrow 10-year money at 0.9%. Fortunately, very few students understand the concept of compound interest.

A minor deflection from the main business, electing a new leader of the Conservative party, and therefore the next Prime Minister; there is no bigger prize in politics. In theory, which is all we have to cling to in these uncertain times.

The EU have declared that they are not prepared to budge on any form of renegotiation, a central plank of any candidates’ pitch, but if there was some movement on the Irish backstop, a deal could be secured. My hunch is that the Irish know that they have completely overplayed their cards on this and would be happy to find some form of graceful retreat. In the meantime, the EU has all but shut down, politically, whilst the top jobs are carved up amongst the member states.

The Donald arrives in London on Tuesday, for a state visit, and will no doubt be dispensing his thoughts on these, and other, matters. Never a dull moment.


David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.