Oct 2022: Rejoicing as law and order is restored

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Rejoicing as law and order is restored

Oct 2022

 

“The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. One should, for example, be able to see that things are hopeless yet be determined to make them otherwise.” Scott Fitzgerald

We consider the above quote an important one for today’s investors and market watchers. Many are fearful as to what the future holds, worried that high interest rates, inflation and cost of living challenges will erode the value of their investments. They are hoping for a brighter future than they see today. We want things to improve too. However, we also think seeing investors once again fearing the Fed and politicians fearing bond markets is a healthy sign of restored law and order.

It was overdue, needed and we are enjoying it.

Dodge City

Imagine yourself watching an old western movie. Dodge City has been an unruly place for years ruled by gangsters, thieves and speculators. The saloon does a brisk trade as does the house of the rising sun. The church is boarded up and the local sheriff is in the pocket of the thieves. When a new sheriff rolls into town cleaning it up you, the audience, cheer as he restores law and order. But what did the town’s population think? It may depend on who you ask. The old farmers and church goers of course welcomed the restoration of old values. But much of the town by then was made up of ne’er-do-wells. They liked drinking, gambling and other night-time activities. More than a few farmers’ sons’ heads had been turned away from ploughing and harvesting towards speculation and the easy life. Before we leave this story let’s assume that pre-law and order being restored Dodge City was 80% speculators and 20% old timers. The speculators had grown rich for years. The old timers by contrast had been side-lined, bullied and ignored. Which are you? Bear in mind only 1 in 5 readers can be traditionalists.

The consequence of the 2008 crisis

Investing markets post-2008 (or maybe before) could be seen through this Dodge City lens. Many investors (speculators) wanted the easy life. Lots of growth and nice low interest rates to enable cheap leverage.

The bailout of the financial system in 2008 had a number of consequences:

  • The most obvious was lasting low interest rates
  • Less obvious was the bail-out backstop. Central banks would be perceived to again bail out businesses or markets in trouble. This ‘Fed Put’ as it became known presumed central banks were too fearful of the consequences to do otherwise.
  • Some weak companies survived that should otherwise have failed due to super low interest rates. Additionally, markets awash with capital funded projects that otherwise they would/should have not.
  • Another consequence was the changing behaviour of many who relied or interact with markets. This included company managers, CIOs and politicians.
    • The latter group, politicians, found that with borrowing costs so cheap they could spend like never before, with seemingly no ill consequences.
    • As a result, bail-outs and generosity became popular policy when once it was frugality and sound finance

As Dorothy once said “We are not in Kansas anymore.”

Restoring law and order

Whilst we hope (and believe in) a brighter future, we are actually enjoying the reset to sound finance that is taking place. The restoring of old school law and order to markets and economics. Up to now too much investor chat during this market correction has been around the rotation between growth and value. This suggests it is some sort of fashion show with trends coming and going on a whim. More recent events point towards something bigger and more important taking place.

The FED and its determination

When Jay Powell was being openly criticised by President Trump only a few years ago it was easy to see him/the Fed as a shadow of its former self. The ‘Fed put’ as many describe it seemingly acted as a backstop for speculators. Under this idea the Fed would occasionally step in and raise interest rates, but importantly back off the minute markets fell too much. This gave many a speculator comfort. Whilst the Fed’s hands were tied post-2008 during a period when the financial system was fragile, today’s situation is very different. This is due to the strength of the financial system and strengthened corporate/consumer balance sheets. To think about this in Dodge City terms, there was a time when law and order would be hard to restore and a time when it was easier.

To see still strong consumer spending and good employment in the face of Fed rate hikes surprises many. It shouldn’t. This is a strong central bank doing what it should do, i.e., taking the punch bowl away when the party gets too rowdy. If the party stays rowdy, they do more, not less. The surprise for many investors is either because they have never seen this before, i.e. a central bank properly flexing its muscles or because they are still too drunk to see cleary what is happening!

For the last few years, we have all invested during a super-low interest rate environment. At the same time our sons and daughters maybe studied Economics at school. Their teachers having to rip up macro-economic text books as seemingly the laws of economics had changed for good. Well now those laws are being restored.

Is the Fed partly to blame for the inflation genie getting out of the bottle? Maybe. But at least now they are acting as they should. Might a recession result? Arguably it is now quite likely as central banks want to see a cooling in employment markets to ensure inflation does not become embedded.

Today’s Fed is being portrayed as some sort of Attila the Hun figure from an ancient past. Its actions harking back to old times; aggressive and unpredictable. We see its actions very differently. They are just fulfilling their mandate, including righting any policy wrongs they or others made during the pandemic. Importantly that does not make the Fed set on destroying the economy by imposing the wrong long term interest rate. This is a cycle, nothing more. Savers (Farmers and Church goers if you will) will enjoy higher interest rates on their savings. Speculators with too much debt will suffer. The speculators we note make much more noise!

Gimme, Gimme Gimme

After the 2008 bailout came the handouts. A combination of factors we think drove this:

  • The first was with Government having intervened in economies once, there was an acceptance that they could (and should) do so again when events required it
  • This occurred under the pretext of ‘well you used money to save the banks, so now why won’t you give it to us’
  • These forces drove a temptation for Government action to help voters directly
  • The fact that it came with seemingly no consequence or economic cost whatsoever (in terms of higher government borrowing rates) was very appealing to those in office
  • What started as unfunded deficits morphed into cheques in the mail –and voters loved it
  • We should be mindful that during this period whoever rose to political leadership positions were those who listened to voters and heard what they wanted i.e. direct help. They have not been those who prescribed tough love. (Even if they were born farmers over time they had succumbed to the music from the saloon).

Thus the fire was laid and Covid lit the touch paper. Once super-rare government intervention became commonplace. Business bail outs and furlough schemes came thick and fast. Politicians convinced themselves that a once in a lifetime event (Covid) justified such unprecedented actions. This belief was folly. For another ‘once in a lifetime event’ soon followed, Russia’s Ukraine invasion. European populations clamoured for their leaders to do something, so they acted fast, in a myriad of ways. But these actions have consequences and the consequences have consequences. As the war, real and of words/sanctions, escalated global inflation and cost of living spiralled ever higher. The political solution was not to reverse course on sanctions, or adapt policy in some way. Instead to use the new tool that voters loved. The one they had learnt came with little consequence. They would give more money away. This time for heating bills.

As investors rather than elected officials it is not for us to say any or all of these actions were definitively wrong or right. What we can now say with certainty is that collectively and over time they have consequences. Arguably those consequences just became very visible in the UK.

This green and pleasant land!

If the Fed is restoring law and order on one side of the Atlantic the bond vigilantness have been doing so on the other. Whatever came before in higher global rates or systemic cracks in UK pension fund derivative use, the Liz Truss mini budget brought events to a tipping point. Up until then markets had tolerated fiscal deficits, furlough costs and heating bill subsidies, but finally the damn broke.

Last week as the fourth UK Chancellor in as many months reversed almost all Government fiscal policies, he spoke directly to bond investors. He did so grovelingly, using the words ‘stability’ and ‘confidence’ over and over again. For a G7 country to be brought to this point is humiliating. It is also an important moment that investors should pay attention to. It did not just occur as an isolated incident, but as a consequence of much that had gone before. All leaders around the world should watch Jeremy Hunt’s presentation to Parliament while the new Prime Minister sat powerless and neutered next to him. These are quite possibly the new rules of the game. Any global politician thinking giveaways, bailouts and unfunded promises is still the way of the world may get a rude awakening. The other faction who will have watched UK events closely are past-bond vigilantes. Asleep for two decades they have now awoken. If they smell weakness elsewhere in the world expect them to pounce (Italy..?). Like the Fed, the bond market was once one of the global policemen politicians respected and feared.

I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. Because the bond market can intimidate everybody. Clinton political adviser James Carville

We remind younger readers that the Clinton administration was in office between 1993-2001. The lowest yield the 10y US treasuries traded at during that time was 5%. Today, post a parabolic rise they yield 4%. In the old days, (before the gangsters arrived in town) bond markets ensured that governments who borrowed from them kept sound books. We welcome this return to old values. Whether Liz Truss and her polices were unlucky in their timing or foolish makes no difference. They were the straw that broke the camel’s back. There will be no going back.

The old lady shows her teeth

As the UK Government U-turned in dramatic fashion the BoE showed some mettle. Clearly loosening fiscal policy whilst a central bank tightens monetary policy is far from ideal. At the same time for UK pension funds’ to experience the explosion of what Lord Wolfson in his 2017 letter to the BoE described as “a time bomb” put the bank in a difficult situation. Yet another quasi-bailout followed with the B of E intervening in the gilt market. Then last week she said:

“we have announced we will be out by the end of this week. My message to the pension funds is you’ve got three days left” BOE spokesman on LDI intervention

This was also music to our ears. It was again a proper restoring of law and orderly markets. A central bank stepping in to ensure functioning markets, but quickly then stepping back. It was not underwriting others losses.

Unlike 2008 almost all important institutions are now strong enough to whether the consequences of their own mistakes in capital allocation. Any that might fail are not significant enough in size to cause unmanageable contagion. That is the key difference between 2008 and now and why central banks can be stronger in market defying actions if they deem it necessary. As politicians used their access to low-cost borrowing to let debt burdens rise it is now countries that may be asked questions by bond markets in the coming months and years rather than companies. Each one will be expected to react as the UK has done. Not all will comply. (In the appendix we show the UK Yield curve as of October 20th. Also overlaid is the same curve one week and one month before. The moves were unprecedented as many have observed)

Reason of optimism

Much of this actually makes us more optimistic 5y+ out than when interest rates were zero. The global economy needs a sensible interest rate and needs strong and respected financial institutions. If this stops some speculation that we have come to expect as normal, so be it. If it means some house prices are no longer viable at giveaway interest rates, so be it. Of course there will be consequences, there always are when cycles change.

Are you scared of high interest rates, why?

There is fear that the speed of rising interest rates will tip economies into some sort of Armageddon. Why would it? Markets and the Fed are now on a discovery mission to find the true neutral interest rate above and below which investment or employment is eased or expanded. Coming from a base of 0% this level was unlikely to be 1%, but nor will it likely be 8%. The speed of movement is only to try and stop any wage inflation spiral before it starts. This is a good thing.

We also observe, who really benefitted from 0% interest rates anyway? Savers didn’t, nor credit card borrowers paying 20% APRs. Strong companies like Berkshire Hathaway and Exor could borrow at 1%, but did they need help? Some consumers were lucky enough to secure mortgages at 1-2% rates but any house-buyer assuming this was a long-term rate was a fool. Indeed, banks’ lending at low rates had to stress test whether a borrower could afford the loan at 3% higher rates. Maybe the right neutral rate should have been 2-3% a few years back. Now it needs be higher to tackle inflation. As we stated earlier the borrowers shout louder than the savers!

Do interest rates of 1% or 4% make you think that differently about investing in Microsoft, Amazon or Ryan Air. If you were reaching for yield, by just comparing stock PE’s with super low yielding bonds, maybe it does. But that shows the error of your investment approach nothing more. Absolute return focused investors do/did not think like that. As a result few have won popularity contests in recent years!

The fear of lasting high inflation

Whilst we are all right to have concerns over the possibility that inflation will be lasting in nature, it also falls upon us as investors to assess whether such an outcome is actually likely. Whilst this is a difficult question, if we were to conclude with any decent probability that inflation would not stay high, then our investment optimism might be markedly improved. Whilst we lean towards this view, in truth we think investors are wise to select companies that can prosper in all environments. (See our comments on Sustainable Competitive Advantage in Holland Macro Views: Raining Gold + Unpeeling Amazon.)

When thinking about the threat of inflation and thus lasting high interest rates we observe a few reflections that make us a little more optimistic than some:

  • Almost all agree that the current inflation problems are “rooted in the supply of good, energy and services” as Lord Wolfson recently observed. He went on: “Restrictions on the production of raw materials during Covid, along with the disruption of international freight routes, reduced supply which inevitably pushed up prices. These problems that might have been short lived, were compounded by the war in Ukraine and the exceptional increases in the cost of energy”. We agree with every word.
  • And those same supply constraints are now easing as factories reopen, port/shipping congestion reduces and container rates fall. Leaders are now also tackling this supply side issue We note some demand destruction accelerates this process further (#Semis/TSMC).
  • Inflation surely only becomes ingrained if there is a spiral of wage and costs inflation that feed off each other. Whilst such a scenario is possible, it is far from certain. Indeed it is the threat of wage inflation that has arguably tipped central banks over the edge into aggressive tightening. Again we should welcome this concerted action.
Vive la difference

The other observation we would make is how different the global economy is today from that of the inflationary 1970’s or 80’s. Whilst there is some protectionism and nationalism creeping in of late the global economy is still dynamic and interlinked with products sourced from low cost producers. Additionally the powerful consumer facing business that dominate today are deflationary in their thinking. Costco, Walmart, Amazon, Alibaba and IKEA all get up each day trying to offer the customer a better (i.e. lower price) deal. We should think of this as a ‘cost minus’ culture. Capital invested in the likes of fibre or streaming also bring lower prices (Netflix/Spotify).

Having to raise prices in December “really hurt us in our hearts” IKEA CEO

The dominant businesses of the past were inflationary by comparison (Sears/Marks and Spencer/Telco’s). These were ‘cost plus’ businesses run for margin not high volume at low prices. They had strong market positions not due to scale economics that they shared with customers, but due to a stranglehold on certain locations or customer relationships. Technology and the success of consumer-centric business models has been great for the customer, but it has also kept inflation under control.

Where inflation might be lasting is in old economy sectors that have gone through depressed capital cycles. The energy and materials sectors are easy to see examples. Airlines another. Underinvestment has been chronic due to a variety of factors. As such the future balance of supply and demand likely results in higher prices. However, even here we wonder if there is not a case for optimism Sectors like Airlines or Paper are small parts of GDP and inflation. Energy and materials are much bigger. But have the 2022 energy price leaps (that have driven inflation higher) not just been many years increases compressed into a short period? Does anyone think these commodities will be higher still in future years? Oil and mining could still be good investments due to constrained past investment in capacity while year on year commodity prices fall from 2022 levels. This would help inflation fall, not keep it rising.

Much is made of the low-cost production abilities of China and surrounding countries being a deflationary force. But this was only true because Next, IKEA, Primark ++ passed these low prices onto customers. Would a 1970’s retailer have done the same, or just been happy to see their margins rise as a result of the savings? The changing relationship with China is seen to be inflationary. As we hear many a company talk of sourcing from Vietnam or Turkey we are less sure. China’s cheap workforce also did not help Spotify charge less for access to music, or Schwab charge almost nothing for looking after our savings. These deflationary forces were partly a function of technological changes (i.e. the internet and fibre/3G speeds). More importantly they were driven by the free market/competitive culture that built them. That business culture still exists today and is a far cry from the protectionist/unionised national industries that dominated the landscape in 1970 or 1980.

In Closing

We all made a few (or a lot) of mistakes when interest rates were so low. As the environment changes we have to live with them and adapt. Seeing a part of your savings fall in value hurts. Seeing your mortgage cost rise does too. Pain aversion and recency bias tells investors to worry and react to such changes. We feel differently. Not only do we think investors need to be wired to be greedy when others are fearful. We also think they should welcome recent market events for what they are. A restoration of order.

“You pay a high price for a cheery consensus.” Warren Buffett

With kind regards

Andrew Hollingworth

The Directors and employees of Holland Advisors may have a beneficial interest in some of the companies mentioned in this report via holdings in a fund that they also act as advisors to.

Appendix

UK Interest rate curve – Credibility restoration

  • Middle line (Green) – As of 20th October 2022:–Day Prime Minster resigns
  • Above line (Yellow) – One week before
  • Bottom line (Dotted Green) – One month before
  • As we press send (on 25/10) this curve is lower still due to UKs restored credibility under a new Prime Minister

  Source: Bloomberg

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Disclaimer
Please read the following conditions of use of this website. This website is directed at high net worth experienced investors and institutional investors who understand the risks involved with the investments being promoted and it should not be relied upon by retail clients (as defined by Financial Conduct Authority). The information on this website is issued by Holland Advisors (London) Limited (hereafter referred to as “Holland Advisors”), a limited liability company (7431314) incorporated in England and Wales, which is authorised and regulated by the Financial Conduct Authority (FRN: 538932). This website is for information purposes only and does not constitute an offer or solicitation to buy or sell securities, funds or any other financial instrument. The information is directed inside the United Kingdom and is not directed at any persons in jurisdictions where it would be against local law or regulation.  In particular, information on this site is not directed at any person, partnership or corporation being resident in the United States of America. Holland Advisors disclaims all responsibility if you access or download any information in breach of any law or regulation of the country in which you reside. Information on this site The information provided does not constitute advice. Holland Advisors believes that the sources of the information in this website are reliable. However it cannot and does not guarantee, either expressly or implicitly, and accepts no liability for, the accuracy, validity, timeliness or completeness of any information or data (whether prepared by it or by any third party) for any particular purpose or use or that the information or data will be free from error. Holland Advisors does not undertake any responsibility for any reliance which is placed by any person on any statements or opinions which are expressed herein. Neither Holland Advisors nor any of its directors, officers or employees will be liable or have any responsibility of any kind for any loss or damage that any person may incur resulting from the use of this information. This does not exclude or restrict any duty of liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. All Information may be changed or amended without prior notice although Holland Advisors does not undertake to update this site regularly. Marketing Communications Documents on this site do not constitute investment research as they have not been prepared in accordance with UK legal requirements designed to promote the independence of investment research. Therefore, even if they contain research recommendations they should be treated as marketing communications and as such will be fair, clear and not misleading in line with Financial Conduct Authority rules. These communications are not personal recommendations to you and any opinions cited are subject to change without notice. Holland Advisors takes all reasonable care to ensure that the information on this site is accurate and complete; however no warranty, representation, or undertaking is given that it is free from inaccuracies or omissions. Documents on this site are based on, and contain, current public information, data, opinions, estimates and projections obtained from sources we believe to be reliable. Past performance is not necessarily a guide to future performance. The content of these documents may have been disclosed to the issuer(s) prior to dissemination in order to verify their factual accuracy. Investments in general involve some degree of risk, therefore Prospective Investors should be aware that the value of any investment may rise and fall and you may get back less than you invested. Value and income may be adversely affected by exchange rates, interest rates and other factors. The investments discussed on this website may not be eligible for sale in some states or countries and may not be suitable for all investors. If you are unsure about the suitability of an investment given your financial objectives, resources and risk appetite, please contact your financial advisor before taking any further action. Holland Advisors and/or its officers, directors and employees may have or take positions in securities, funds or derivatives mentioned on this site (or in any related investment) and may from time to time dispose of any such securities (or instrument). Holland Advisors manages these potential conflicts of interest internally via its compliance procedures. Fund Information Parts of this site may refer to Funds managed or advised by Holland Advisors. These are not solicitations to invest and any potential investors should refer to the “Our Funds” section of the website in order to learn more about these Funds and find out how and where to obtain the relevant full legal documentation. Linked Websites This site may be linked to third party websites or contain information provided by third parties. Holland Advisors does not make any representation as to the accuracy or completeness of such websites or information, has not and will not review or update such websites or information, and cautions browsers that any use made of such websites or information is at their own risk. Holland Advisors does not accept any liability arising out of the information contained on any linked website or Information provided by a third party and the use of such sites and information is at your own risk. This does not exclude or restrict any duty or liability that Holland Advisors has to its customers under the regulatory system in the United Kingdom. Indemnity You agree to indemnify and defend Holland Advisors, its affiliates and licensors, and the officers, directors, employees, and agents of Holland Advisors and its affiliates and licensors, from and against any and all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your access to or use of this website and the Information. Use of Cookies If you agree to these terms and conditions a “cookie” might be placed on your computer. A cookie is a packet of information that does not identify individual users of a website, but allows the collection of website activity (such as the number of users who visit our website, the date and time of visits, the number of pages viewed, navigation patterns, what country and what systems users have used to access the site). We can use this information for statistical purposes, which allows us to analyse and improve our website. The cookie will expire automatically after 6 months or you can manually remove cookies in your browser settings. Copyright, Trademarks and Other Rights Copyright, trademarks, database rights, patents and all similar rights in this site and the information contained in it are owned by Holland Advisors or relevant third party providers. You may use the Information and reproduce it in hard copy for your personal reference only. The information contained herein and any supplemental documentation provided is confidential and should not be copied, reproduced or redistributed without the prior consent of Holland Advisors. Governing Law You agree that your use of this site and any dispute arising from this use is subject to English law and you submit to the jurisdiction of the Courts of England & Wales.
Privacy Notice
This is the privacy notice of Holland Advisors London Ltd our company number is 07431314. Our registered office is at The Halt, Smugglers Way, The Sands, Farnham, Surrey, GU10 1NB.
Introduction
This notice describes how we collect, store, transfer and use personal data. It tells you about your privacy rights and how the law protects you. In the context of the law and this notice, ‘personal data’ is information that clearly identifies you as an individual or which could be used to identify you if combined with other information. Acting in any way on personal data is referred to as ‘processing’. This notice applies to personal data collected through our website www.hollandadvisors.co.uk. Except as set out below, we do not share, or sell, or disclose to a third party, any information collected through our website.
Data Protection Officer
We have appointed a data protection officer (‘DPO’) who is responsible for ensuring that our privacy policy is followed. If you have any questions about how we process your personal data, including any requests to exercise your legal rights, please contact our DPO, Claire Brunt at  claire@hollandadvisors.co.uk.
Personal data we process
1. How we obtain personal data The information we process about you includes information:
  • you have directly provided to us
  • that we gather from third party databases and service providers
  • as a result of monitoring how you use our website or our services
2. Types of personal data we collect directly When you use our website, you may provide personal data by submission of data by our Sign Up or Contact Us forms. This can be categorised into the following groups:
  • personal identifiers, such as your first and last names
  • contact information, such as your email address and your telephone number for communication
  • records of communication between us including messages sent through our website, email messages and telephone conversations
  • marketing preferences that tell us what types of marketing you would like to receive
3. Types of personal data we collect from your use of our services By using our website and our services, we process:
  • technical information about the hardware and the software you use to access our website and use our services, including your Internet Protocol (IP) address, your browser type and version and your device’s operating system
  • usage information, including the frequency you use our services, the pages of our website that you visit, whether you receive messages from us and whether you reply to those messages
  • your preferences to receive marketing from us; how you wish to communicate with us; and responses and actions in relation to your use of our services.
4. Our use of aggregated information We may aggregate anonymous information such as statistical or demographic data for any purpose. Anonymous information is that which does not identify you as an individual. Aggregated information may be derived from your personal data but is not considered as such in law because it does not reveal your identity. For example, we may aggregate usage information to assess whether a feature of our website is useful. However, if we combine or connect aggregated information with your personal data so that it can identify you in any way, we treat the combined information as personal data, and it will be used in accordance with this privacy notice. 5. The bases on which we process information about you The law requires us to determine under which of six defined bases we process different categories of your personal data, and to notify you of the basis for each category. If a basis on which we process your personal data is no longer relevant then we shall immediately stop processing your data. If the basis changes then if required by law we shall notify you of the change and of any new basis under which we have determined that we can continue to process your information. 6. Information we process with your consent Through certain actions when there is no contractual relationship between us, such as when you browse our website or ask us to provide you more information about our business, you provide your consent to us to process information that may be personal data. Wherever possible, we aim to obtain your explicit consent to process this information, for example, we ask you to agree to our use of non-essential cookies when you access our website. We continue to process your information on this basis until you withdraw your consent or it can be reasonably assumed that your consent no longer exists. You may withdraw your consent at any time by instructing us  claire@hollandadvisors.co.uk. 7. Information we process for the purposes of legitimate interests We may process information on the basis there is a legitimate interest, either to you or to us, of doing so. Where we process your information on this basis, we do after having given careful consideration to:
  • whether the same objective could be achieved through other means
  • whether processing (or not processing) might cause you harm
  • whether you would expect us to process your data, and whether you would, in the round, consider it reasonable to do so
For example, we may process your data on this basis for the purposes of:
  • improving our services
  • record-keeping for the proper and necessary administration of our business
  • responding to unsolicited communication from you to which we believe you would expect a response
  • preventing fraudulent use of our services
  • exercising our legal rights, including to detect and prevent fraud and to protect our intellectual property
  • insuring against or obtaining professional advice that is required to manage business risk
  • protecting your interests where we believe we have a duty to do so
How and when we process your personal data
8. Your personal data is not shared We do not share or disclose to a third party, any information collected through our website.
Use of information we collect through automated systems
9. Cookies Cookies are small text files that are placed on your computer’s hard drive by your web browser when you visit a website that uses them. They allow information gathered on one web page to be stored until it is needed for use at a later date. They are commonly used to provide you with a personalised experience while you browse a website, for example, allowing your preferences to be remembered. They can also provide core functionality such as security, network management, and accessibility; record how you interact with the website so that the owner can understand how to improve the experience of other visitors. Some cookies may last for a defined period of time, such as one visit (known as a session), one day or until you close your browser. Others last indefinitely until you delete them. Your web browser should allow you to delete any cookie you choose. It should also allow you to prevent or limit their use. Your web browser may support a plug-in or add-on that helps you manage which cookies you wish to allow to operate. The law requires you to give explicit consent for use of any cookies that are not strictly necessary for the operation of a website. 10. Personal identifiers from your browsing activity Requests by your web browser to our servers for web pages and other content on our website are recorded. We record information such as your geographical location, your Internet service provider and your IP address. We also record information about the software you are using to browse our website, such as the type of computer or device and the screen resolution. We use this information in aggregate to assess the popularity of the webpages on our website and how we perform in providing content to you.
Other matters
11. Your rights The law requires us to tell you about your rights and our obligations to you in regard to the processing and control of your personal data. We do this now, by requesting that you read the information provided at  http://www.knowyourprivacyrights.org 12. Communicating with us When you contact us, whether by telephone, through our website or by email, we collect the data you have given to us in order to reply with the information you need. We record your request and our reply in order to increase the efficiency of our business. We may keep personally identifiable information associated with your message, such as your name and email address so as to be able to track our communications with you to provide a high quality service. 13. Complaining If you are not happy with our privacy policy, or if you have any complaint, then you should tell us. When we receive a complaint, we record the information you have given to us on the basis of consent. We use that information to resolve your complaint. 14. Retention period Except as otherwise mentioned in this privacy notice, we keep your personal data only for as long as required by us to provide you with the services you have requested. 15. Compliance with the law Our privacy policy complies with the law in the United Kingdom, specifically with the Data Protection Act 2018 (the ‘Act’) accordingly incorporating the EU General Data Protection Regulation (‘GDPR’) and the Privacy and Electronic Communications Regulations (‘PECR’). 16. Review of this privacy policy We shall update this privacy notice from time to time as necessary.