£456m on consultants, a $16.5m Pokémon card and are house prices actually falling?

Hey you,

House prices have had their biggest August drop since 2018, which sounds brilliant if you’re trying to buy, but does £7,000 off the average asking price really make a house affordable? Inflation looks like it’s heading back up again, which could affect everything from your energy bill to your mortgage, and the government has awarded KPMG and EY a contract worth up to £456m to train civil servants… which I have a few questions about.

Also, someone has paid $16.5 MILLION for a Pokémon card, so naturally we need to discuss that too.

And after covering the late Sunday show on LBC last weekend, I’ve had this idea going round and round in my head about the kind of money show I’d actually want to make. I want your opinion on it, but I’ll come back to that at the end.

Let’s get into it.

The government has awarded KPMG and EY a contract worth up to £456m to train civil servants in areas including AI.

Now before I start ranting, there is an important distinction here: the government says this is a training contract, not a consultancy contract, and £456m is the maximum potential value, so it doesn’t necessarily mean every penny will be spent.

Can we just point out that the government previously pledged to reduce its reliance on external consultants and save taxpayers £1.2bn by 2026, yet Big Four contracts awarded this year have reportedly already reached £1.25bn, compared with £1.06bn across the entirety of last year.

I completely understand bringing in expertise that you don’t have internally. Businesses do this all the time, and sometimes paying an expert is far cheaper than trying to build something yourself.

My question is: at what point should government be building this expertise internally?

If AI is genuinely going to transform how the public sector operates, surely we need permanent people inside government who understand it rather than repeatedly paying outside firms to teach them?

I’m not anti-consultant. I’m an accountant; I know exactly why professional services firms exist. I just think when we’re talking about potentially hundreds of millions of pounds of taxpayer money, we’re allowed to ask whether we are buying a short-term service or actually building long-term capability.

The average asking price of a newly listed home fell £7,360 in August, down 2% to £364,999.

That is the biggest August drop since 2018 and buyers currently have the “most choice” in 12 years. Rightmove now expects prices could fall by as much as 2% across 2026.

If you are trying to buy, this is probably the most interesting part: more properties on the market means sellers have to compete for you rather than you competing with ten other buyers for them.

I know buying a house feels emotional, especially when you’ve finally found the one, but you are making one of the biggest financial decisions of your life. Look at how long it has been listed, look at comparable properties nearby and don’t assume asking price = selling price.

However, I also don’t think we should suddenly celebrate because house prices are falling 2%. A £365,000 house becoming £357,000 does not magically fix affordability when deposits are enormous and mortgage rates are still significantly higher than they were a few years ago.

It is SOME movement in the right direction for buyers, but Britain’s housing problem is much bigger than one summer price drop.

UK inflation has risen to 2.9%, largely because Ofgem’s 13% energy price cap increase pushed a typical annual bill up by £221 to £1,862.

And there could be more coming.

The energy price cap is currently forecast to rise again in October as the Iran conflict keeps wholesale energy prices elevated, potentially wiping out much of the benefit households were supposed to receive from the government’s electricity VAT cut.

This matters way beyond your gas and electricity bill.

If inflation remains stubbornly above the Bank of England’s 2% target, it becomes much harder to justify cutting interest rates and there is even a risk rates have to rise again. They’re currently 3.75% and the MPC come together mid september to decide what to do next.

That feeds straight back into mortgages, loans, credit cards and business borrowing.

This is why I bang on about energy prices so much. An oil or gas shock starts thousands of miles away and somehow ends up affecting the price of your mortgage, your food shop and your flight.

Wall Street had a wobble this week, with the S&P 500 falling 0.7%, the Nasdaq 100 down 1.7% and semiconductor stocks dropping 5.6%.

Part of this is about borrowing costs. The yield on 30-year US government debt briefly hit 5.34%, its highest level since 2007, while America’s national debt has now passed an extraordinary $40tn. People are nervous.

Investors have spent the last few years pricing in enormous future growth for technology companies. The problem with being valued on what you might earn years from now is that higher interest rates make those future profits worth less today.

This is why expensive growth stocks can get hit particularly hard when bond yields rise.

And I think this is a useful reminder if you invest in something like the S&P 500. You might think you own a beautifully diversified collection of American businesses, but a HUGE amount of your money is now concentrated in a handful of enormous technology companies. That isn’t necessarily bad. You just need to know what you actually own.

Pokémon is celebrating its 30th anniversary and is now the world’s largest media franchise, with more than 400m games sold.

But apparently Pikachu has also become an asset class. The most valuable Pokémon card has sold for $16.5m. SIXTEEN. POINT. FIVE. MILLION. DOLLARS.

Now before everyone goes running into their parents’ loft, please understand that the random battered Pikachu you swapped at school probably isn’t funding your retirement.

But I actually think collectibles are fascinating from a financial perspective.

Pokémon cards, Birkin bags, watches, wine, classic cars and art can all become incredibly valuable because of the same basic economic forces: scarcity + demand.

If millions of people want something and only a tiny number exist, people will compete for it and the price can become ridiculous.

The problem is there is no underlying cash flow. A company can make profit and pay dividends; a bond can pay interest. Your Pokémon card is worth precisely what another person is prepared to pay you for it.

So yes, alternative assets can make people enormous amounts of money.

Would I be putting my pension into Charizards? Probably not.

🥤 Au Vodka: The Welsh drinks brand is nearing a £500m sale to Sazerac, potentially leaving its founders with more than £100m each just 11 years after starting it.

🏦 Monzo: Chair Gary Hoffman is leaving after a boardroom battle as the digital bank prepares for an eventual stock market listing. Monzo was valued at around $6bn in its latest share sale.

🎯 Target: The US retailer received a $994m tariff refund after the Supreme Court ruled some Trump tariffs unlawful, helping quarterly operating profit double to $2.6bn.

🇵🇱 Poland: Around 3.5m people could receive an income-tax cut, funded partly by increasing corporation tax on larger businesses from 19% to 22%.

⚡ Energy bills: The October price cap is forecast to rise again as higher wholesale energy prices threaten to wipe out much of the government’s electricity VAT saving.

🥤 Huel: Danone’s €1bn (£864m) takeover of the British nutrition brand has been cleared by the UK’s competition regulator.

🏎️ Ferrari: Its first electric car has reportedly sold for $40m at auction, more than 35 times its usual price. Apparently people have got over being angry about an electric Ferrari fairly quickly.

If you had a chance to watch this week’s YouTube, you’ll know I got to host an LBC show last weekend, which was honestly one of those slightly surreal career moments. And apparently they haven’t had enough of me yet because I’m covering the 9–10pm show this Sunday again, so do come and keep me company!

But hosting got me thinking about what I’d actually want to do if I could create my own money show from scratch.

I even have a name in my head: The Money Hour.

And this is where I need your help. If you were going to listen to a money show every week, what would you want from it?

Because I don’t want it to be an hour of people talking about the economy as though everyone listening has an economics degree. I want it to feel useful. The stuff we actually talk about here, what’s happening in the news and how it affects your money, investing, careers, housing, pensions, scams, consumer problems, your financial dilemmas and probably me getting unnecessarily angry about the occasional £456m government contract.

Basically… this newsletter, but live with maybe Q&A?

You could ring in with your money problems, disagree with me, ask the questions you think are too stupid to ask (they’re not) and actually have a conversation about the financial stuff affecting your life.

Would you listen to that? And more importantly, what would you want me to include? Reply to this email or leave me a comment because I genuinely want to know. Maybe we can build the idea together.

Anyway, before I accidentally write the pitch deck in this newsletter, that’s all from me this week.

If there’s one thing the stories this week have reminded me, it’s that the headline number rarely tells you the whole story. House prices falling doesn’t automatically make homes affordable. Inflation rising doesn’t mean every price is suddenly shooting up. And someone paying $16.5m for a Pokémon card definitely doesn’t mean you should empty your pension into Charizards.

Understanding the bit behind the headline is the bit that actually helps you make better decisions with your money.

Have a wonderful weekend!

Abi x