Why is Rishi Sunak planning a tax increase and spending cuts of up to £50bn?

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Based on Treasury calculations the £50 billion estimate is designed to deal with a fiscal hole of over £30 billion. By using a combination of increases in taxes and also spending cuts, the hope is this will prevent problems from getting worse.

The UK also has a GDP of over 3 trillion so for an economy of that size £50 billion coming from tax increases and spending cuts is not going to have that much of a relative impact.

With regards to the question of if raising taxes will provide an incentive for people not to work, this would be answered by the Laffer Curve and depends on if we are to the left of T or to the right of T. To review, this curve shows how if the tax rate was 100% no one would have an incentive to work and if it was 0% there would be no tax revenue collected. It is about finding the right point on the curve to set the tax rate if the goal is to maximize tax revenue.

The inflation is quite high now in the UK. For example, the Financial Times did an analysis that reported a bowl of tomato(e) pasta had increased by a staggering 60 percent since last month.
The price of cooking oil was up 65% also.

Russia’s invasion of Ukraine has also exacerbated the already high inflation by pushing up the costs of gas, wheat and oil.

Many FTSE-listed companies are in a position where they now must issue profit warnings since the costs of doing business have risen so much.

The higher energy costs as a result of Russia’s invasion of Ukraine coupled with higher interest rates are what are causing these profit warnings. There will be more profit warnings coming in the near future.

Inflation in the UK is measured several different ways but all of those baskets of goods are impacted by energy costs. Now that Fracking has been banned again this certainly won’t do anything to keep energy costs lower. Some investors have seen enough of high inflation and a £ losing value against the US dollar, and are reducing their gilt holdings.

If you are in the situation where you have £ and normally would want to purchase gilts but are looking at all of this inflation and the £ endlessly losing value against the $, then Alamo Mortgage Holdings, Ltd has a solution for you.

Alamo Mortgage Holdings offers corporate income bonds that in addition to paying hundreds of basis points more than UK gilts also give institutional and accredited investors the option of easily converting out of GBP to USD.

Alamo Mortgage Holdings, Ltd works with institutional and accredited UK investors looking to find the fastest way out of gilts into something that pays income and also gets them into US dollars.

The US dollar has for decades been gaining value against the British pound sterling. Many family offices in the United Kingdom are looking for investments that let them reduce the concentration of their holdings denominated in sterling.

If a family office in the United Kingdom purchases Alamo Mortgage Holdings, Ltd backed bonds the benefits are passive income and being able to get out of sterling quickly before it potentially loses more value.

Our focus at Alamo is to work with family offices, institutional and UK accredited investors that would like to get into an asset that pays out US dollars. USA mortgage notes are an excellent investment choice.

There are many reasons that mortgage note investing is excellent since it allows someone to purchase immediate income. The only downside to mortgage note investing is there is a bit of a learning curve to do it properly.

By purchasing Alamo Mortgage Holdings, Ltd bonds an investor is able to obtain the passive income they are seeking. However, they also avoid having to do front line negotiation to find deals and go through the time consuming and rigorous due diligence that Alamo Mortgage Holdings performs on our acquisitions.

If you are an institutional or UK accredited investor thinking of reducing your gilt holdings but want to replace it with something with more potential upside, Alamo Mortgage Holdings, Ltd has a solution for you.

Alamo Mortgage Holdings, Ltd a privately held United Kingdom company, offers corporate income bonds that offer higher rates of return than UK gilts.

If you would like to learn more go to www.alamomortgageholdings.co.uk/ and fill out the contact form to request some free information to schedule a Zoom or Google Meet introductory call.

I wish you good luck with your investing!

Benjamin Z Miller, Managing Director
Alamo Mortgage Holdings, Ltd.
ben.miller@alamomortgageholdings.co.uk
www.alamomortgageholdings.co.uk/team.html