Markets have quickly stepped down from high alert on an escalation to the Middle East conflict and have returned to a pre-occupation with the next move for interest rates and when this will happen. Israel’s show of strength, in that it could strike whenever it wishes against Iran with extreme force, seems to have quietened matters down for now. Instead of worrying about conflicts, it is tempting to start to think about better times ahead. While it is tradition to holiday during the months of July and August, this is often when prices are at their highest and it brings the anticipated return of pre-pandemic airport queues. This leads many people to consider May for their summer getaway. May, with its pleasant weather and two Bank Holidays, on Monday the 6th and 27th this year, provides the perfect time for a getaway. However, this presents a challenge if you have children in school.
This summer will be the last one that taking children out of school for holidays will cost you £60 in fines. The English Government is set to increase fines for parents who take their children out of school for unauthorised absences by a third. The fines will rise from a minimum of £60 to £80 for those who pay within 21 days, rising to £160 for parents who delay payment. This adjustment is the first since 2012 and brings the fines in line with inflation over the past 12 years. This represents another reminder that, like the cocoa prices mentioned in last week’s email, while generally inflation is easing, pockets of inflation are still being felt.
Despite these fines, parents have been crunching the numbers, and a recent survey by Go Compare indicates that one-fifth of them would consider taking their children out of school for a holiday to cut costs, with 38% citing savings on travel expenses as their primary motivation. This comes as no surprise given the sharp rise in holiday expenses. Flight costs to popular destinations have surged by 71% since 2022, and there has been an average 18% increase per person for package holidays during school breaks.
A quick price comparison online highlights the full financial impact, a week at a local Center Parcs resort in the UK for a family of four costs around £1,500 off-peak but jumps to £2,600 during the first week of the UK summer school holidays. Similarly, an all-inclusive week-long holiday in Majorca costs about £1,200 per person during the school holidays, which is double the £600 price tag for the same package just two months earlier in June. These stark price differences underline why many parents are tempted to book holidays during term time.
As we approach the month of May and look forward to the two long weekends we will have, you may be pleased to know that there is a strong campaign to introduce another bank holiday in England, this time on St George's Day, April 23rd, to celebrate England’s patron saint. Following its launch in March, a petition advocating for this addition has garnered significant support, accumulating over 76,000 signatures to date—a noteworthy achievement, given that petitions surpassing 100,000 signatures are typically considered for parliamentary debate.
Clients in a discretionary portfolio will soon receive their quarterly reports and it is wonderful to see another positive quarter for portfolios after previous inflation induced market wobbles. As we say, keep calm and stay invested, there are better days ahead. Do have a good weekend.