The tax grab: Is your cash at risk?

**Danni Hewson** (0:09)
Hello, and welcome to this week's episode of the AJ Bell Money and Markets podcast. I am Danni Hewson, and I'm joined by Dann Coatsworth. And Dann, it's been a really quiet week, right? Absolutely nothing to talk about.

**Dan Coatsworth** (0:22)
Well, really quiet, unless you count the resignation of the UK Prime Minister, oil price falling, as it looks like US and Iran hammering out a workable peace deal. We've also had a bit of wobble in sort of tech stocks, including a big pullback in SpaceX. But yeah, you're right, really quiet week.

**Danni Hewson** (0:40)
Let's add in a few nerves about where central banks go next with rates, what looks like a hostile takeover bid for EasyJet, an England win, then a draw, soaring temperatures and halting trains completely on their tracks, which has meant that I've not been able to come and join you in the London studio today.

**Dan Coatsworth** (1:00)
Yeah, that is annoying because I was looking forward to that.
Well, we did get some details from the government about plans for changes to ISO. We've been waiting that for a while, so we've got AJ Bell's head of public policy, Rachel Vahey, who's going to be on the show later on, to talk about what all that means and plans for a new first-time buyer ISO. Tom Teeber is also going to be joining us a bit later on. He's been talking to this week's special guest, who is fund manager, Ian Rees from Ruffer Investment Company. Now, Ian had a chat with Tom all about whether the 60-40 portfolio is actually still viable in today's sort of investing world.

**Danni Hewson** (1:37)
So, loads to cover. And I feel like already I've run a bit of a marathon just going through that lot.
You would have thought that Markets would have had a really torrid week here in the UK, considering all the political upheaval that we have had, but it's not really made massive waves. It's been fascinating to watch market reaction following Kirstama stepping down, saying he's going to step down as prime minister, and then all the sort of to-ing and fro-ing about whether or not there is going to be a leadership contest, whether it's just going to be what's been dubbed a coronation of Andy Burnham.
But actually, although on the resignation, Kirstama saying, yes, I'm going to go. We did see the pound fall a little bit, but recovered really quickly. Shares, yeah, they've been subdued, but there's been all sorts of other stuff going on as well. The big thing, of course, that people were watching was how bond markets reacted. What happened to those bond yields?
It was a bit there in terms of reaction, wasn't it? It was really odd. I think people were waiting to see this big spike, which never actually happened. Now, the reason we were thinking we might get a spike is if you look back to May the 15th, when the NEC gave Andy Burnham the leave to stand in the maker field by election and all the horse who started beating that this might end up with Andy Burnham becoming Prime Minister, we saw a massive spike. But since then, they've eased off significantly. I think that's probably got a lot to do with how Andy Burnham has been positioning himself in the intervening period. So we know that there was a comment going around, that he was saying that government shouldn't be in hoc to the bond markets. Comments he since rolled back on which made, I think a lot of investors, money markets maybe feel a little more at ease. He's also said that he'll stick to the fiscal rules, to manifesto promises. I think what's really turned the tide was that he has brought in three pretty heavyweight economic advisors, which are Andy Haldane, of course, former Bank of England Chief Economist, Richard Hughes, former Chair of the Office for Budget Responsibility, and Lord O'Neill, Jim O'Neill, who worked on the Northern Powerhouse, has been a long-term ally of Andy Burnham. All of those things combined have created, I suppose, a wait-and-see moment. We're waiting for Andy Burnham to actually put some meat on the bone when it comes to the kind of policies that he would like to go ahead with. It's one of the reasons why some people are saying there should be a leadership contest because then they'll be forced to spell out exactly what he stands for. There are some bits that we can pick out from over the last few years when Andy Burnham has been the mayor of Manchester. Certainly, some of his comments about wanting to nationalise certain things like water and power have already seen a bit of an impact. We saw on Friday share prices in London listed water firms falling a little bit. But it feels like a bit of a wait and see moment.