With high levels of uncertainty as a result of Brexit and fluctuating markets, many will have started 2018 wondering where is the best place to put their money to make the greatest return.
In 2017, we saw the first base rate rise in more than a decade, rising from the historically low rate of 0.25 per cent to 0.5 per cent. The Bank of England took the decision to raise the rate following growing inflation.
However, this rapid rise in inflation has since died off with the latest Consumer Price Index slipping back to three per cent having previously recorded a high of 3.1 per cent in November 2017.
This means that further rate rises, needed to improve outcomes from more traditional forms of saving, are less likely in 2018.
Looking further afield to the global economy, much of the world is currently enjoying a growth boom, with moves such as Donald Trump’s cut to corporation tax in the US buoying up the markets.
Meanwhile, for much of 2017, the UK had weakened purchasing power due to the significantly weakened pound. Indications are that the currency is now rallying slightly.
Most advisers and banks tend to suggest that 2018 will continue to be fairly uneventful, but on the horizon looms Brexit and more political uncertainty from other countries including traditionally stable economies such as Germany, where Angela Merkel is struggling to form a stable coalition.
So what does this mean for investments in the next few months? With risk slightly reduced since the referendum in 2016, savers and investors may now feel they are able to explore new opportunities.
At one point, for some more innovative investors, that may have meant blockchain and cryptocurrencies but the rapid decline in the value of Bitcoin through December and January has exposed the vulnerability of this form of investment.
Property may still appeal to many people, but with prices cooling off in many places and a much tougher tax regime in the UK, many are not as keen to exploit the opportunities available under buy-to-let.
ISAs and similar accounts offer a higher level of security and stability, but with the base rate sitting so low, returns remain very slim.
Balancing a portfolio so that it makes the required returns without overexposure to risk requires careful management.
Whatever action savers and investors plan to take, it is important that they get up-to-the-minute advice from their financial adviser.