Ask Sid about Savvy the Squirrel

Later, a discussion on inflation data, the latest from the Middle East, and a look ahead to some of the major retail sector results.

Use the player icons above to listen on your favourite podcast app, or read the full transcript below.

This podcast was recorded on April 27 2026 and all information was correct at the time of recording.

Nothing in this podcast is personal advice – you should seek advice if you’re unsure what’s right for you. Investments rise and fall in value, so you could get back less than you invest. And past performance is not a guide to the future

Full podcast episode transcript

[0:00] Emma Wall: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown. I’m Emma Wall – Chief Investment Strategist.

[0:05] Matt Britzman: And I’m Matt Britzman – Senior Equity Analyst – and, once again, this is your Investment Special, and we’ve got, as always, a lot to talk about.

We’ll be looking at how a squirrel is going to help Britain become a nation of retail investors – as ever, market reaction to ongoing Middle East tensions – and we’ll also take a look at what’s going on in the retail sector here in the UK.

[Pause]

[0:27] Matt Britzman: Kicking us off, Emma... the Government’s launched one of the first ‘Investing for Future’ campaigns for – I don’t know – four decades, or something like that? Talk us through how we’ve been involved in that as a business, and what it means for investors.

[0:41] Emma Wall: Absolutely. We met ‘Savvy the Squirrel’ in the last week, Matt – it’s a big deal. This is the logo for the ‘Invest for the Future’ campaign – and it sounds flippant, but it’s actually a really important campaign.

We had ‘Ask Sid’ in the ‘80s – and that was the last time, really, that there was a nationwide campaign to encourage people to invest – and this is one that’s backed by, not just the Government, but also across industry. So, Hargreaves Lansdown is a big supporter, but so are other lots of banks – lots of other platforms and wealth managers – and the idea is... we often look across the pond, at the US, and look at the investment culture that exists there – and how, really, it helps ordinary Americans build their wealth – and we’ve talked about, before, HL’s mission statement is ‘Helping Britain build wealth with confidence’ – and, really, getting everybody to invest is a tide that lifts all boats. It’s of benefit not just to us, as a business, obviously – and to our clients – but also financial resilience of the entire nation is beneficial to the economy, and it’s really kind of a positive flywheel if we can invest more in the UK, take control of our financial futures, build wealth, help the economy – and so, hence the launch this week. It’s really all about why people that aren’t investors and how to help them be investors.

What’s really interesting is... the data shows it’s not really about lack of money. The FCA – the financial services regulator – Financial Lives Report – showed that there are about seven million adults in the UK who hold more than £10,000 of investable assets – by which they mean money that is available to be invested – but they prefer to hold cash rather than invest it – and cash just isn’t the best place to put your money, long term, if you want to make the most of it. And £10,000 doesn’t sound like much – it’s fair enough – you might think, ‘Oh, that’s just a rainy-day pot’ – which it is – but, actually, of those that have more money – so going up to £50,000 to £100,000-worth of investable assets... they hold two-thirds of that in cash. And even those with more than £100,000 – so £100,000 to £250,000 of investable assets – hold nearly half of that in cash – and that is really money that could be working harder, invested, to help people – as I say – build up their financial resilience, build their wealth, and support the economy.

Obviously, there are no guarantees with investing, but all the data shows, historically, that investing makes your money work far harder and helps you hit your financial goals far quicker than putting your money in cash.

[3:13] Matt Britzman: We’re obviously slightly biased – given where we work, Emma – but what d’you think’s actually holding investors back – or has held investors back – and the premise behind initiatives like this to get people investing?

What are some of the reasons why they’re holding so much cash in the first place?

[3:28] Emma Wall: Yeah, it’s a good question – I mean, one of them is ‘Fear of getting it wrong.’ You know, people think that, actually, cash is a safe place – and, if they getting it wrong in terms of investment selections and they can lose all their money – and that is absolutely right. But, actually, the fear of getting it wrong is holding people back from making that money work harder.

Also, one of the things that came out from the campaign is people don’t think investing is for them – they think it’s for people in pinstripe suits in the city – and, sure, professional investors can still look like that – but, actually, investing is for all people – it’s for everyone. You know, you can start investing from as little as £25 a month.

Most of us, who are employed, have a workplace pension – that’s investing too – you’re an accidental investor through that. So, really, the idea that, actually, investing is for everyone – and it really can help everyone too.

[4:19] Matt Britzman: Yeah – I think there’s also an element there, Emma – where, obviously, cash has a part of portfolios and diversed portfolios, at times – and we talked about this at the start of the tax year – where, if investors didn’t necessarily know what to do, then cash parking until you can come up with a decision... at least you’re making use of your allowances over that period in time. But I think one of the things that’s also missed – and you kind of touched on it there – is that, yes, cash might seem more safe – but, when you have inflation running at ‘X’ 3%, or something, at the moment – and it’s been much higher than that recently... that is, effectively, eroding the value of that cash, over time, as well.

And I think that might bring us nicely onto the next topic we wanna talk about – which is Markets – and what’s going on at the moment. But we’ve had some inflation data out from the UK – we have this ongoing crisis in the Middle East, which... I mean, I’m struggling to keep up with what’s going on at the moment, but we still have (as of recording today) a temporary ceasefire, nothing permanent, blockades – nothing still getting out of the Strait of Hormuz... So, give us a round-up, Emma, of what’s going on in the world of broader markets and the implications on inflation and interest rates for the UK.

[5:25] Emma Wall: A very neat segueway, Matt, I have to say – thank you for that.

Yeah, we’re talking today about the real impact of what’s going on in the Middle East – and bringing it back, domestically, to our listeners in the UK – because we’ve had a few pieces of economic data over the last week, which start to show how the real impact of oil prices spiking over the last couple of weeks (or six weeks, now, we’re running at, at the time of recording) is really showing up in the cost of living. And UK inflation data came out in the last week that showed, actually, inflation has risen to 3.3% – is an increase from 3%, the previous month – and it’s the first indication that we’ve had of the real impact.

As I say, there’s always a lag on inflation data – so, for the inflation data that we had when the Middle East started was always backward looking – and this is the first indication that we have of the impact of what happens when oil prices rise – and what’s been really interesting is what that potentially means for monetary policy.

So, we saw the inflation data come out, 3.3% – an increase from the previous month – against the longer-term trajectory that was expected at the beginning of the year, which was that inflation would come back down to target 2% at some point during 2026 – and then, actually, interest rates... similarly, the trajectory was downward. So, have a look at the beginning of the year... the Bank of England was expected to cut interest rates at least twice through 2026.

Now, off the back of that inflation data, the market immediately priced in a hike later this year. We’ve got the Bank of England Monetary Policy Committee meeting this week (as we record). The expectation, actually, is that there’ll be a split vote – some people are expecting them to increase interest rates this week. We actually think that, while the war in the Middle East is going on, interest rates are held – just because it is transient, and we don’t think that the impact on inflation is gonna be the same as it was when Russia invaded Ukraine.

Our house view is that rates are actually held this week – and that, while the war in the Middle East is ‘The conflict remains elevated,’ that’s the stance that the Bank of England Monetary Policy Committee will take – and then, gradually, they will resume their cutting cycle, though we don’t expect that to happen until towards the very end of this year, potentially into next.

[7:45] Matt Britzman: Yeah, thanks, Emma. But there’s also been some forecasts coming out recently from the International Monetary Fund as well around that inflation topic – so d’you wanna just fill the listeners in on what we’ve seen from there?

[7:57] Emma Wall: Yeah, you’re right. Our base case is that this war does not become a multi-year issue – and, although inflation remains elevated, as I say, it’s transient – and, because of where interest rates are, currently, they provide a bit of a buffer for elevated prices. So, at 3.75%, interest rates are much higher than they were than... so, you know, as we make the comparison often between when Russia invaded Ukraine – and they were at near-zero – and monetary policy had to react in order to control inflation.

That said, that’s our base case. It is worth highlighting that’s one of the ‘Outside scenarios.’ So, we’ve had two pieces of research that have come out, in the last week, from the International Monetary Fund (as you mentioned), but also the EY IITEM Club – which specifically look at the UK’s vulnerability to the impact of the war in extreme circumstances – and that’s because of the UK’s reliance on Middle Eastern energy and global supply chains... quite different to when you look at the US – where, although obviously, they are still pledged to an international oil price, they are exporters of oil – whereas we are very much importers of oil – and the vulnerabilities that the UK and Europe have – and they’ve looked at what that, potentially, could do to economic growth if the war was protracted.

Again, also, the overlay here – specifically with the UK – is that our starting point for growth was much lower than the other G7 countries – so was already quite anaemic outlook – and our worst case scenario showed that, actually, we would have significantly slower economic growth this year and next because of the impact of the war.

As I said, it’s an ‘Outside scenario’ – and we think it’s unlikely to cause recession on either side of the pond – but it’s likely to have an ongoing impact on inflation and, of course, on rate policy.

And, Matt, I was gonna ask you about the retail sector ‘cause we’ve got some really interesting results expected, this earning season – and the retail sector is one of those areas where price rises, inflation, consumer confidence really makes a different, doesn’t it?

[10:02] Matt Britzman: Yeah, quite right – and almost as if we planned this, Emma... great segueway from talking about inflation and the impact on costs. You know, the retail sector is one of those that really feels this kind of first, often, cases as well – and it’s one of the things, where we hear from retail CEOs, where they’ll give cautious guidance because they know the costs are gonna be rising – and it’s been a tricky year or so for the sector, with tax rises recently, as well, for them to deal with.

So, we have had some big results already – so I just wanted to give an overview of what we’ve seen so far, because there is a bit of a shift here between those companies within the retail sector – so whether it’s grocery companies, or whether it’s online retail, etc. So, ‘What’s happening so far?’

Well, at the minute, the consumer is still spending – they’re just being more selective about where that money is going. That means that there’s gonna be differences between performance from different retail businesses.

Now, looking at the grocery sector so far, it’s been largely the strongest element that we’ve seen – and, to some extent, that does make sense... you know, food is a non-negotiable. When prices rise elsewhere, the last thing you cut down is food budgets – the one-off items go first – so it kind of makes sense that that’s what we’re seeing.

Tesco and Sainsbury’s both had results out within the last month or so. The story there is that, if you can combine competitive pricing with loyalty schemes and a good customer proposition, then there is the ability, still, to attract customers even when conditions are more difficult... Tesco’s a great example of that.

The kind of scale that Tesco’s built over recent years helps it, to some extent, stay insulated when the backdrop gets choppy. We also saw Sainsbury’s do well in food. The key differentiator there is that Sainsbury’s owns Argos – which gives it a different angle... means it’s not quite as clean a grocery story as with Tesco – and that non-discretionary exposure is, again, one of the items where we think would come under pressure first, if we are gonna see a period of higher inflation and pressure on those household budgets.

Now, flipping outside of Grocery... mixed results from Retail, really. Next, was a standout example of how to do it well. It’s not just the business has grown, but it’s growing in the right ways. The online business remains strength – overseas expansion looks promising – and, you know, this has been a very well-run business for a long time – and this is also in a market where a lot of retailers are battling margin pressure and uncertain demand. Doesn’t mean that Next isn’t battling those same issues, but it just seems to be handling a little better at the minute.

Primark – which is obviously owned by Associated British Foods for now, but they’re spitting Primark out, which is actually gonna make it a cleaner retail story down the line. They have had pretty decent results as well – and, again, kind of highlights that the consumer hasn’t stopped shopping yet... just a bit more picky about where they’re going with that.

And then, on the flip side, ASOS is a good example of a business that hasn’t been doing particularly well for a few years but is showing signs of progress under the hood.

It kind of looks a little bit like Grocery is doing well at the moment – and has the potential to stay robust. Retail... you kind of wanna position yourself onto some of the higher-quality retail names, with the uncertainty that we’re gonna have, moving forward – but, as ever, we cover a lot of retail names, so our share research is a great place to go [laughs] if you want to... plugging myself here and the team! We produce research on this, and we will continue to do so – but, as you said, Emma, the environment’s getting choppy, and what the consumer does next... I think it’s gonna be quite important – but, at the minute, it’s quite hard to pinpoint exactly what happens there.

[13:42] Emma Wall: Really interesting, Matt – thank you for that. As you say, a real mixed bag, and I’m sure more information to come – which, as you say, also you will be providing to our listeners and our clients, to give them more guidance through the potential turmoil ahead.

Before we go, I wanted to give our regular listeners a bit of a heads-up that the voices on this podcast will be changing, as I’m going on maternity leave – and the brilliant Anna Macdonald – our Investment Strategy Director – will be joining Matt to guide you through all the macro of the markets (and the, no doubt, mayhem) until next March. So, say hello to our listeners, Anna!

[14:18] Anna Macdonald: Hello, listeners – and very much looking forward to it!

[14:22] Matt Britzman: Yes – thanks, Anna, and I’m very much looking forward to continuing this podcast with yourself whilst Emma is off on maternity leave – and good luck to Emma and her family during that period of time. And that’s all for this week.

This session was recorded on April 27^th 2026, and all information was correct at the time of recording. Next week, as ever, Helen Morrissey and Clare Stinton are back, and they’ll be talking to you about how we can raise financially-savvy children. Emma, that’s a topic right up your street right now!

[14:51] Emma Wall: It is, indeed.

Nothing in this podcast is personal advice, and you should always seek advice if you’re unsure what’s right for you. Individual stocks are not recommendations to buy, and it’s important to stress that diversification is always your portfolio’s friend – but even more so when markets are volatile and the outlook is unclear. Those who are comfortable investing in individual stocks should do their due diligence, and it’s worth remembering that they do require a bit more ongoing attention.

[15:15] Matt Britzman: And investments can rise and fall in value, so you could get back less than you invest – and past performance is not a guide to the future.

[15:22] Emma Wall: No view is given on the present or future value, or price of any investment in this podcast, and investors should form their own view on any proposed investment.

[15:30] Matt Britzman: So, all that’s left is for us to thank our Producer, Elizabeth Hotson.

[15:33] Emma Wall: And to thank you, so much, for listening – we’ll be back again soon. Goodbye!

[15:36] Matt Britzman: Goodbye!