10 Facts You Need to Know About 2014

MARKET REACTION: As we welcome 2015 with open arms, Morningstar takes a moment to check the pulse of the UK economy and investor

Morningstar News Team 29 December, 2014 | 7:30AM
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10% is the average return generated by Global Large-Cap Growth Stocks in 2014, while an investment in Natural Resources Stocks would have lost you 10%. Top-performing categories were Biotechnology and Indian Stocks, which both returned well over 40%, while Russia Stocks and Energy Commodities lost over 30%.


Nine is the number of Monetary Policy Committee members who voted to keep interest rates at the record low level of just 0.5% in their monthly meetings from January to July this year – a unanimous decision for all members. In the four meetings since then 2 of the 9 members have voted to lower rates to just 0.25%.


8% was how much UK house prices were expected to rise in 2014. But the average house price has actually already risen 12%, increasing more in value than the annual wages of 60% of British workers. House prices are widely expected to increase by another 5% on average in 2015.


7% of UK goods and service exports are to the BRIC nations of Brazil, Russia, India and China – revealed George Osborne in this year’s Budget. The Chancellor expects the UK to be a net beneficiary of China’s move from an investment and export driven economy to a consumption-driven one.


6% is the latest UK unemployment rate – its lowest for six years. More people are in employment, but wage growth has struggled to keep up with inflation, meaning most British workers have less purchasing power than they did a year ago. A stronger upturn in wages is needed in 2015 if the UK economy is to meet expectations for further growth of 2.5-3.0%.


Five is the number of British banks that have been fined more than $1 billion related to the misspelling of PPI: Lloyds has paid out the most since 2009 at $18 billion, followed by Barclays at $8 billion, RBS with $5 billion, HSBC a little over $4 billion and Santander UK at $1.5 billion.


Four million more employees are predicted to now be paying into a workplace pension following the government’s auto-enrolment initiative, bringing the total to almost 11m. This is widely expected to rise to 14m in 2016 and 18m by 2024 as the onus is increasingly placed on individuals to be responsible for funding their retirement.


3% is how much the Office of Budget Responsibility expects the UK economy to grow in 2014. We have been among the strongest developed economies this year, helping to fuel the forecast for global GDP to also grow 3%. In 2015, UK growth is expected to slip back slightly, but overall the world economy is seen accelerating to 3.5%, led by China.


$2 billion is the amount in revenues that Russia loses for every $1 fall in the oil price. In the last six months of 2014 the price of Brent oil has fallen from $110 to $60. Oil and gas make up 70% of Russian exports and the recent fall in prices has forced authorities to hike interest rates from 10.5% to 17%.


1% is the current rate of CPI inflation in the UK, half the Bank of England’s target rate of 2% and a sign that an interest rate hike may not happen at all in 2015, meaning cash savings are likely to continue to underperform a diversified basket of investments in global stock markets.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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