Andy Parson, fund manager at The Share Centre, suggests that the financial arena will get much worse before it gets better, in his latest blog for www.whatinvestment.co.uk

Remember the Labour Party electoral victory song ‘Things Can Only Get Better’? Unfortunately, it looks like ‘things’ in the financial arena are actually set to get much worse before they get any better.

Inflation at the last time of writing was running at 3.8 per cent and following a recent announcement now stands at 4.4 per cent. I wonder how personal the letters are between Mervyn King and Chancellor Alistair Darling?

Perhaps King could send future interest hikes on the back of postcards – mind you, at this rate that would be bad for the environment as it would require a vast transportation network to deliver them all, creating a massive carbon footprint in the process.

Talking of carbon footprints, I’m proud to say my family and I have reduced ours by forgoing our annual long haul to the USA. Do we feel better for it? I’m not sure, but one advantage is that any potential concerns over debt have disappeared for the time being!

Previously, I made reference to the increasing price of fuel. What a difference a few weeks make. We now see major retailers cutting pennies off the price of a litre of fuel.

The problem is a few pennies can buy very little these days – historically, 2p would have bought four fruit salad chews on a Saturday morning visit to the sweet shop.

And, just when there are signs of some relief for the poor motorist, Russia decides to go and upset Georgia. Should we be worried about the financial implications of the conflict? Well, if it continues, concerns will certainly run high over the main oil pipeline running through the country.

As for energy, not only are we being faced with a raft of price increases on fuel, food and water, the energy giants have decided to hit us with price increases the like of which are unheard of.

Increases are generally expected, but not of the magnitude announced in this latest round of price rises.

And what do the utility companies do to appease us? Well, one main supplier has decided to send its customers a couple of energy efficient light bulbs. I’m still waiting for mine.

Standing back from my personal concerns over the ever-increasing burden of spiralling energy and utility costs, I should remember that as a fund manager these companies are key defensive plays for many investors.

Increases will eventually find their way back into future overall profits which, in turn, benefits share and fund performance as demand increases. Therefore there must be some good coming out of all this bad news for the customer.

Or is there?