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Welcome to this special end-of-year edition of money spotlights. And what a year it was.
From the fall in house prices to the rise of AI, our in-house writer Giorgia Rose will take you through the highs and lows of 2023’s global financial trends that impacted our wallets.
Inflation and interest rates soared
Inflation was one of the big themes this year and with it, increased interest rates - happy news if you had savings, as banks upped their rates giving customers more in return for their money.
However, higher interest rates also meant borrowing became more expensive, and many saw their mortgages rocket. With mortgage costs going up, demand went down. As a result, there were widespread declines in inflation-adjusted housing prices for two-thirds of countries according to the Organisation for Economic Co-operation and Development.
Despite falls in core inflation, especially in the United States and parts of Europe, central banks may need to keep interest rates higher through 2024 as fears persist over price rises.
nudge can help you navigate what interest rates mean for your savings, debts, and the housing market.
Digital currencies became more mainstream
We’re all used to using digital payments for our daily transactions – so are government-backed digital currencies (CBDCs) the logical next step? Eleven countries have already launched CBDCs, and China was a key player this year, having made huge strides in popularizing the digital yuan (e-CNY).
In May, public sector workers in the city of Changshu, Jiangsu province, were paid fully in the e-CNY, and the currency is now available in 26 cities across 17 provinces and accepted in more than 5.6 million shops.
However, there are concerns because CBDCs could give the government too much control of people’s financial activities. A total of 130 countries representing 98% of the global economy are currently exploring digital versions of their currencies, according to think tank Atlantic Council, so keep an eye out for more launches in 2024.
nudge can teach you more about digital currencies and the future of payments.
AI tech stocks rallied
AI dominated the news this year and a fear of missing out pushed retail investors into creating a major tech stock rally. The largest tech companies, such as Nvidia, Snowflake, and Alphabet returned roughly 60% through the first eight months of 2023, according to Goldman Sachs Research.
The tech-heavy NASDAQ-100 index fund grew 43% this year, compared to the wider S&P 500 which grew 21%, but it isn’t clear if this performance will continue into 2024.
AI tech stock prices could be impacted by a continuation of the supply chain issues that affected the industry over the past two years while 2024 could see further regulation introduced including the EU’s AI Act and China’s Generative AI Regulation.
nudge can take you through investment choices, finance tools and how to measure performance.
Thanks for tuning in. Wishing you a happy, prosperous year in 2024 - and watch out for the latest global money trends from January.
February 12 2024 | Team nudge
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