15th December 2022
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The Bank of England delivers a 0.5% rate hike
The BOE increases interest rates to a 14-year high of 3.5%, after they announced a half-percentage point increase at the latest committee meeting.
The BOE increases interest rates to a 14-year high of 3.5%, after they announced a half-percentage point increase at the latest committee meeting. Officials were torn between balancing the risk of inflation becoming further entrenched or prevent titling the economy into a deeper recession. Jeremy Hunt acknowledged that higher interest rates deliver another blow to UK consumers, but persistently high inflation will prolong the pain to the economy. Despite the latest inflation print indicating that official figures may have peaked, evidence still suggests that inflationary pressures have not begun to fully subside with the labour market still tight and the...
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14th Dec 2022
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The Federal Reserve raises rates by 0.5%
U.S. policymakers tempered the level of their latest rate hike increasing it only by 0.5%, which now brings the benchmark rate to a 4.25% to 4.5% target range.
U.S. policymakers tempered the level of their latest rate hike increasing it only by 0.5%, which now brings the benchmark rate to a 4.25% to 4.5% target range. This follows on from four consecutive 0.75% hikes that have supercharged the pace of rate hikes. Jereme Powell’s speech sapped all expectations of a dovish pivot, explaining that the Fed is not close to ending its fight against inflation. The stance on monetary policy needs to remain restrictive and for longer to return inflation back to 2%. Policymakers now project the terminal rate to reach 5.1% by the end of 2023 vs...
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14th December 2022
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UK Inflation Undershoots Expectations
The latest UK inflation report was a surprise on the downside with headline inflation coming in at 10.7%, down from 11.1% in October which marked a 41-year high. A more modest inflation print was driven by the decline in cost for petrol, used cars, and prices within the leisure sector.
The latest UK inflation report was a surprise on the downside with headline inflation coming in at 10.7%, down from 11.1% in October which marked a 41-year high. A more modest inflation print was driven by the decline in cost for petrol, used cars, and prices within the leisure sector. Meanwhile core inflation which excludes energy and food prices dropped to 6.3% from 6.5% in October. Whilst the latest figures suggest that inflationary pressures are beginning to ease, it still remains uncomfortably high where consumers will continue to feel the tight squeeze on their incomes. As such, despite the moderation...
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13th December 2022
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US Inflation Cools
The latest inflation print unravelled a compelling sign that inflationary pressures are continuing to ease, with many now expecting a downshift in monetary tightening from the Fed.
The latest inflation print unravelled a compelling sign that inflationary pressures are continuing to ease, with many now expecting a downshift in monetary tightening from the Fed. This was as core inflation came in lower than expected at 6% year-on-year, marking a 0.2% rise in November, the smallest monthly advance since August 2021. Headline inflation which includes food and energy also undershot expectations coming in at 7.1%. Markets reacted positively after the report was released with the NASDAQ and S&P 500 closing higher at 1.01% and 0.73% respectively, whilst US Treasuries also rallied. The boost in confidence was underscored by...
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16th November 2022
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UK Inflation Soars to 11.1%
The UK Consumer Price Index surged to a 41-year high in October reaching 11.1% from a year ago, surpassing the Bank of England’s forecast of 10.9%. Higher energy bills continued to drive headline inflation, meanwhile core inflation which excludes energy and food prices remained unchanged at 6.5%.
The UK Consumer Price Index surged to a 41-year high in October reaching 11.1% from a year ago, surpassing the Bank of England’s forecast of 10.9%. Higher energy bills continued to drive headline inflation, meanwhile core inflation which excludes energy and food prices remained unchanged at 6.5%. The pound notched 0.3% higher to $1.19 following the latest inflation print. Governor Andrew Bailey and policy makers have continued to echo a hawkish tone, in which they are prepared to raise rates aggressively until spiralling inflation is sapped. Wage growth has not kept up the momentum with increases in prices which is...
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11th November 2022
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UK GDP Contraction
The announcement this morning sees the first economic contraction since the final COVID lockdown. The UK saw a drop of 0.2% in GDP, which is thought to be the start of a drawn-out recession. The figure announced is better than expected, however, singling out September there was a large contraction of 0.6%, it reflected the extra bank holiday and period of national mourning for Queen Elizabeth II. The cost-of-living crisis is also a contributing factor, it has caused household spending and retail sales to drop within the last quarter. The economic outlook is dependent on the UK household's willingness to...
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10th November 2022
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US Inflation Falls Below Expectation at 7.7%
The latest US CPI report shows that inflation reached 7.7% in October, representing the softest inflation print since the beginning of the year. Core inflation, which excludes food and energy prices also cooled retracting from their 40-year high seen in September, advancing 6.3%. The biggest decline in price gauges that helped drive the lowest inflation print this year was medical care services and used vehicles, whilst shelter costs failed to restrain core inflation increasing 0.8% last month. The overall moderation in inflation now points toward a potential peak in consumer-price growth, with many investors hoping that this is a sign...
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4th November 2022
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US Jobs post another beat in October
US jobs in October posted another beat with 261,000 jobs created. This number came in ahead of economist expectations of 200,000. This would normally give rise to fears that the economy was on path for higher rates as it remained strong. This time around the critical unemployment rate ticked up to 3.7% which surprised markets and prompted speculation that job losses were starting to mount. This unemployment prompted a rally in equities and a sell off in the dollar as investors speculated that the FED would halt their rate hiking cycle early.
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3rd November 2022
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Bank of England follows Fed with 0.75% rise
The interest rate in the UK, now at 3%, was raised by the largest increase seen in 30 years. The move was in response to six months of the UK's year on year consumer price index (most widely used measure of inflation) being above 9%, vastly over the bank's targeted 2%. The UK market reacted negatively with the pound initially falling 2% against the US dollar. Despite both central banks raising rates 0.75% it was the signalling that followed that was bifurcated. The Federal Reserve suggested that rates would be raised further in the future than the market had priced...
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3rd November 2022
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Federal Reserve Hikes Interest Rates to 0.75%
The Federal Reserve has delivered their fourth jumbo rate hike by another 0.75% bringing the Fed’s funds rate to c.3.9%. This was in line with market expectations. The message from Powel was mixed and had a hawkish tilt but with a dovish heads-up to markets that there will be a moderation in prevailing rate hikes. Markets reacted favourably initially to this dovish tone but the message that the terminal interest rate will be higher than earlier projected whipsawed markets with the S&P 500 suffering its worst rout following a Fed decision this year. Whilst the path moving forward will involve...
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19th October 2022
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UK inflation continues to rise in September
UK inflation for September has come in at 10.1% against expectations of 10% for core inflation. This is up from Augusts reading of 9.9%. Much of the rise has come from consumer goods such as food and drink with sectors such as energy cooling. This has caused some further volatility in the pound and UK bond markets on fears that further rate hikes will be needed to tame inflation at the same time as UK economic numbers continue to slow.
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13th October 2022
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US core inflation remains high
Core inflation in the US surprised markets by remaining higher than expected in September which caused a sharp sell off in equities and bonds. The inflation number of 8.2% was higher than the 8.1% which the market was looking for. Whilst this was a small miss it remains indicative of the direction of travel for inflation and thus indicative of how aggressive central banks are going to have to get with rate hikes to control it which remains the reason why equities and bonds sold off on the news.
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13th October 2022
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The UK economy contracted by 0.3% in August
In face of the cost living crisis the UK economy shrank by 0.3% predominately driven by a decline in manufacturing production and consumer services. Consumer-facing services plunged 1.8% whilst manufacturing and production dropped by 1.6% and 1.8% respectively. Soaring input costs, higher interest rates and weakening demand has been the catalyst for this contraction in economic output with the economy now smaller than it was at the start of the year. What is now surfacing are the profound difficulties in consumer-facing sectors as the squeeze on real income is forcing households to adjust their spending decisions as inflation remains to...
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22nd September 2022
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Federal Reserve raiser rates by another 0.75%
The US Federal Reserve raised interest rates in the US by another 0.75% to 3% in what was largely expected by the market. What was unexpected was the more downbeat assessment of the economic growth in the US over the coming year and how the path of interest rates was going to have to rise to meet what the FED said was a more persistent inflation problem. US stocks responded negatively on the news that rates might go higher than expected and remain there for longer as well as beginning to price in a deeper recession.
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14th September 2022
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UK Inflation reached 9.9% in August
UK inflation showed signs of easing as the Consumer Prices Index (CPI) rose 9.9% from a year ago. The latest August CPI data was lower than the 10.1% in July and a haircut from the consensus of 10% which economists had been expecting. Petrol prices fell 6.8%, raw materials declined 1.2%, whilst food and clothing prices rose 1.5% and 1.1% respectively. After headline inflation easing from its highest rate in four decades UK bonds rose, with the yield on 10-year notes dropping 0.05%. As markets assess the latest macro environment the important question now being asked is whether UK inflation...
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13th September 2022
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US Inflation comes in hotter than hoped
The US consumer price index for August came in at 8.3% year on year. Which, although a fall from the July figure of 8.5%, is above the consensus estimate 8.1%. This led to a sell-off in equity and bonds as although energy prices in the US have eased, it was the core figure (food and energy stripped out) that was the concern, rising 0.4% month on month. The persistence in this core CPI figure has again highlighted the Federal Reserve is not close to done raising rates. Many economists are predicting the US Federal Reserve will raise interest rates by...
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9th September 2022
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Queen Elizabeth II dies after 70 years on the throne
Queen Elizabeth II, Britain’s longest serving monarch died yesterday after 70 years on the throne. The Queens death was announced by Buckingham palace yesterday at 6.30pm. The throne has been immediately succeeded by then Prince Charles and now King Charles III. TAM’s thoughts and prayers go out to the family and the nation at this time of mourning.
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5th September 2022
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Liz Truss announced as UK's next Prime Minister
A Liz Truss victory has been anticipated in the weeks leading up to the election date, but now is the time we'll observe how the new PM will tackle the many headwinds the UK faces. In the crosshairs is surging UK inflation, a risk of recession and the real income squeeze brought on by soaring energy prices. Therefore, PM Truss has pledged to freeze energy bills and slash taxes to help revive the UK economy, however these promises have been criticised as inflationary. The reaction in markets was minimal. At the time of today's announcement, the pound sterling briefly fell...
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17th August 2022
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UK hits 10.1% inflation in July
The UK registered inflation at 10.1% in July which is the first time in 40 years the UK has seen inflation at this level. Most of this rise in inflation seems to have come from a rise in food costs which poses its own challenges to bringing this number down which is harder to do than energy prices. Economists expected inflation to peak at 9.8% which was below the actual number and leaves a very tricky path for the Bank of England to keep raising rates to control inflation yet tightening financial conditions as we move into a recession.
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12th August 2022
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UK economy shrinks by 0.1% in 2nd quarter
The UK economy shrank by 0.6 per cent in June, pushing gross domestic product (GDP), the main measure of economic output, into a 0.1 per cent contraction in the second quarter. One key explanation is the extra jubilee bank holiday impacting the country's output while rising inflation eroded spending power. The ONS stated that consumption fell by 0.2% in the quarter, but there have been indications that the celebrations for the jubilee had little impact on the quarterly number with KPMG suggesting test and trace having a more significant effect on the decline of output in Q2. This is a...
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10th August 2022
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US inflation cools in July
The US inflation figure fell to 8.5% year on year for July. Key drivers of the high inflation figures are food and energy costs, these goods are highly volatile within the market so this slowdown may be temporary. The previous inflation movement has placed a continuous strain on families and services giving the US a negative social and health impact for the past few months. Slight relief from this negative impact on US households came as gas prices fell, by $1 per gallon compared to the previous month, easing pressures on the US economy. The reduction of inflation could be...
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5th August 2022
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US posts another bumper jobs number
Jobs in the US economy surged another 528,000 created against a predicted 250,000 from economists. US bonds sold off on the news as investors re calibrated where the federal reserve was prepared to raise interest rates to in order to control inflation. Other moves were a spike in the dollar and a sell off in US Equities as these are both affected by the perception of an increase in interest rates.
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4th August 2022
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BoE raises rates by 0.5% to 1.75%
The Bank of England have today raised the key Interest rate by 0.5% to 1.75%. Raising rates by 0.5% is something not seen in the UK for over 27 years and prompted traders to call for the UK to be approaching the end of the rate hiking cycle. What scared the market was the accompanying forecast from the BoE in which they believe the UK is going to enter a protracted recession in which inflation is likely to remain very high for longer than many have given credit. This announcement prompted more investors to begin buying UK bonds in preparation...
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28th July 2022
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US Federal Reserve hikes rates 0.75%
Equity markets in the US rallied sharply yesterday as the US Federal Reserve (the Fed) increased interest rates by 0.75% (now to a range of 2.25% to 2.5%) and suggested that future rate rises could slow after September. Government bond prices ended the day flat, however, as uncertainty remains high as to the global economic outlook and thus remains skepticism that the Fed will be able to slow its aggressive rate hiking trajectory this quickly. Given the International Monetary Fund (IMF) slashed global growth forecasts previously in the week, the Fed has admitted it will remain ready to react to...
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20th July 2022
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UK Inflation surges past expectations in June
UK inflation continued to surge in June with rising fuel and food costs pushing the inflation rate up to 9.4% from 9.1% in May. Inflation in the 9% territory hasn’t been seen since the 80’s and surprised investors who were expecting inflation to move lower in June. The number prompts speculation that the Bank of England will further raise interest rates to cool what is obviously more entrenched inflation than many are giving are fearing.
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7th July 2022
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Boris Johnson resigns as Prime Minister
The resignations of Chancellor Rishi Sunak and Health Secretary Sajid Javid set off a wave of government and party exits which exceeded fifty before the Prime Minister eventually succumbed to the mounting pressure and stepped down. Mr Johnson remained unapologetic for his record as Prime Minister and announced he would stay on in a caretaker role until his successor is chosen. The Tory leadership contest is now unofficially under way, with Boris Johnson's resignation setting the wheels in motion for a new prime minister to take the reins. The pound staged a rally on the news as did UK stocks,...
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16th June 2022
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UK rates hiked to 1%, BoE flags recession risk
The UK central bank (BoE) has raised UK interest rates by 0.25% to 1% at its meeting today, in a continued bid to combat inflation running at 30 year highs. The BoE also signaled it expects a recession to take hold later in Q3 and into Q4, but that it is more important to continue to take steps to limit inflation. The bank expects inflation could peak at 10%, currently 7%, citing energy price inflation as a key driver. UK sovereign debt, which is sensitive to interest rate rises, was being sold following the news, allowing yields to rise. Sterling...
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15th June 2022
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The Feds high-rate hike
The Federal Reserve announced it will raise its benchmark policy rate by 75 basis points, while also suggesting that this potentially won't be the only adjustment of this magnitude. This was done in an attempt to combat the announced inflation rate, sitting at 8.6%, the highest level in 40 years. The Fed is not alone in its endeavours to deal with inflation, which has become a global trend. Central banks throughout advanced and emerging economies have been swiftly raising interest rates in short order, with plans to do more this year. US financial markets rallied after Powell said that he...
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14th June 2022
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UK Sterling hits two-year lows against the US dollar
Gross domestic product fell 0.3 per cent between March and April, and the pound tumbled to a two-year low against the US dollar after the UK economy contracted in April, missing forecasts and confirming the recovery has stalled since January as surging prices hit household spending and business activity. The Sterling has slumped by as much as 1.5 per cent to $1.2140, as the latest gloomy economic news was compounded by a broad rally for the dollar to push the exchange rate to levels last seen in May 2020.
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10th June 2022
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US inflation continues to rise
On Friday, the monthly rise in the consumer price index, is significantly faster than the 0.3 per cent increase recorded in April and above economists' expectations for a 0.7 per cent uptick. This maintains pressure on the US central bank to hike interest again in an attempt to avoid a recession. At that pace, the year-over-year figure intensified to 8.6 per cent, the highest level since December 1981. Lael Brainard, the vice-chair, recently made clear that the Fed could continue the half-point pace through September and would only consider reverting to more typical quarter-point increments following a 'deceleration' in monthly...
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9th June 2022
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ECB signals more hikes to fight inflation
The European Central Bank (ECB) has signaled that it plans to raise interest rates in Europe by 0.5% in September, further to a planned rise of 0.25% in July. This half point hike is only planned should inflation fail to ease off from its current level of 8.1%. These hikes would life Europe out of negative interest rates for the first time since 2014. The ECB also said that it plans to keep its balance sheet of purchased bonds level and won't consider reducing it until after the rate hike cycle begins. There was, however, disagreement between members of the...
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7th June 2022
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Boris Johnson scrapes through no-confidence vote
On Monday night, the UK's Prime Minister managed to hold on to his title but was left under no illusion that his authority had been left badly damaged. He won the vote by 211 to 148, meaning 41% of Conservative MPs believe Mr Johnson should no longer serve in Downing St. The result, which the Prime Minister described as ‘convincing' comes after weeks of anger following multiple lockdown-breaking parties. Current rules state that Mr Johnson cannot be challenged for another year but history suggests he may not last that long. Previous Tory prime ministers Margaret Thatcher, John Major and Theresa...
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3rd June 2022
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US payrolls show companies keep hiring
Nonfarm payrolls increased by 390,000 in May. The figure, which kept the unemployment rate at a 50-year-high of 3.6%, beat estimates by over 60,000 and went a small way in quelling fears of an economic slowdown. The gains in jobs were broad-based with leisure and hospitality leading while retail suffered, suggesting consumers were shifting from goods spending to services. Labour force participation did also edge higher, rising to 62.3% though still 1.1% below pre-covid levels.
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18th May 2022
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UK inflation and unemployment show economy running hot
Data this morning shows UK inflation is now the highest among any advanced economy in the world at 9%, marking a forty-year high. Around three quarters of the April jump was driven by a sharp climb in utility bills. This is particularly troubling as this will hit the UK's poorest families even harder as they spend a vaster proportion of their income on gas and electricity. This comes in a week where the UK also set another record – the lowest unemployment in nearly half a century. The jobless rate stands at 3.7% in the three months to March however,...
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12th May 2022
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UK GDP contracts 0.1% in March
Following a flat GDP reading in February, the UK economy has shrunk by 0.1% in March after a lackluster period for retail in particular. Year on Year, the UK economy has grown 8.7%, a strong rebound from the pandemic, though inflationary pressure is topping the list of headwinds as we progress through 2022. This is exacerbated by the war in Ukraine, though inflation has been mounting since economies reopened following several lockdowns since 2020. UK sovereign debt saw a notable lift at market open as safer assets were being sought due to growing risk of recession, and following recent declines...
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11th May 2022
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Inflation remains high in the US, growth assets fall
US CPI was measured at 8.3% year on year in the month of April, which despite being a small decline from the previous month reaching 8.5%, did not do much to allay fears about the current inflationary environment leading to recession. US inflation has increased each month since August 2021, making this the first reading in 10 months to come in lower, though only marginally, so all eyes will be on the next few readings to see whether the trend continues. Equities reacted to the print, which was taken as adding to risk of more interest rate hikes than currently...
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6th May 2022
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US job market remains tight despite headwinds
428,000 new US jobs were posted for the month of April, slightly ahead of forecasts, underscoring a robust US job market despite mounting economic headwinds. This is on par with job creation the previous month so the data does little to add clarity to growing uncertainty over recessionary risk amidst central bank interest rate hikes and a persistently inflationary environment. Unemployment also stayed level at 3.6% in April, keeping concerns about a material shift in the labor market at bay for now. Markets continue to see increased volatility following central bank rate hikes, with global equities seeing losses again on...
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6th May 2022
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BoE hikes rates 0.25%, now 1%
The UK central Bank, the Bank of England (BoE), has moved to raise interest rates by another 0.25%, bringing the key rate to 1% today, a move largely anticipated by markets. Details of the BoE`s meeting revealed that 3 members of the board of 9 would have preferred to raise rates by 0.5%, which was more hawkish than expected. The BoE`s inflation expectations have also risen to 10% by the end of the year for the UK and additionally they now expect the economy to contract going into 2023 due, in part, to high commodity prices. In reaction to the...
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5th May 2022
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US FED raise interest rates by 0.5% in May
The US Federal Reserve (The FED) last night raised interest rates in the US by a full half a percentage point which hasn’t happened for over 20 years. The FED announced they would look to raise rates by another half a percentage point at the next two meetings in June and July to combat rising inflation. The market rallied into this news as the FED also said they were, at this moment in time, not considering a 0.75% hike which the market had begun to price in over the last month. All eyes remain on the probability of aggressive rate...
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28th April 2022
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US economy contracts 1.4% in Q1 2022
The US economy in Q1 2022 contracted 1.4%. The contraction came as a surprise to the market given the last quarter of 2021 saw the US economy grow 6.9% annualised. Despite consumer spending increasing 2.7% these missed expectations of 3.5% indicating a slowing consumption story in the US which is associated with an economy heading towards a recession. US equity markets rallied on the news under the assumption that this deteriorating number was reason for the FED to hold off raising rates to aggressively.
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13th April 2022
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UK inflation in March 10 times that of a year ago
UK Inflation surged to 7% in March which was an increase from 6.2% in February. This 7% figure is in stark comparison to the same time a year ago when March’s inflation came in at just 0.7%. The inflation surprise will likely strengthen the case for the Bank of England to continue to raise interest rates to further control this runaway inflation.
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12th April 2022
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US inflation rises to 8.5%, meets estimates
US inflation has come in near economists' estimates at 8.5% year on year (YoY) in March, bringing inflation to the highest level in the US since the early 1980s. The Consumer Price Index (CPI) which measures a broad basket of goods, saw an increase from 7.9% YoY, showing that prices continue to rise as conflict in Europe also pushes many prices further, most notably energy. The core measure of CPI which excludes energy and food prices, was up 6.5% YoY, showing the stronger impact energy and food prices have had on the March figure. The US central bank has, ahead...
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11th April 2022
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UK economy grows at 0.1% in March
The UK economy in March 2022 grew at a monthly pace of just 0.1% compared with 0.8% the previous month. This was against analysts forecasts of 0.3% for March. The slowdown was attributed to the healthcare sector, supply chain disruption and abnormally strong weather events which impacted the tourism industry. Regardless of the reasons this highlights how close the UK economy is to stalling and with the cost of living increasing in April there remains more challenges to UK GDP increasing over the year with more probability that GDP in the UK will slow into reverse at some point.
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1st pril 2022
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US Economy Gains 431,000 Job in March
The US recorded strong jobs growth in March as higher wages lured more workers back to the labour force, giving the Federal Reserve another data point to support an aggressive tightening policy to help ease inflation. The report, which showed the world's largest employer adding 431,000 jobs in March, was slightly below Bloomberg's forecast, however it still indicated a substantial increase in what many deemed to be a tight labour market. Further to this news, the unemployment rate dropped 0.2% from February to 3.6%, making it the lowest level since before the pandemic. January and February farm payrolls were also...
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23rd March 2022
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Rishi Sunak responds to inflation spike
The UK Consumer Price Index (CPI), the most common measure of year-on-year inflation, hit a new 30-year high of 6.2% for February. This 0.8% increase was the largest monthly jump between January and February since 2009. The UK Chancellor responded today, in his spring statement, revealing income tax would be cut and the National Insurance threshold will be increased by £3000 to £12,570 in a bid to help households weather the storm. The National Insurance changes will come into effect for July, saving £30mn people £330 per year but the income tax basic rate reduction from 20% to 19% will...
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17th March 2022
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Bank of England follow Federal Reserve's lead
The BoE's monetary policy committee today voted 8-1 to raise interest rates 0.25% for the third successive policy meeting. The UK, now back to their pre-pandemic interest rate of 0.75%, finds itself with a lower inflation figure than the U.S. but still at a 30-year high of 5.5%, well above the Bank's 2% target. The Bank forecasts the annual inflation rate will rise to 8% next quarter and potentially even higher in the second half of the year after factoring in the Russian invasion as well as other 'very large shocks'. The quarter percentage point increase was seen as a...
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16th March 2022
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The long-awaited rate hike is here
The U.S. Federal Reserve confirmed an interest rate hike in a bid to combat surging inflation which most recently topped 40-year highs of 7.9%. The quarter percentage point rise, which is the first in more than three years, was widely expected by investors and had largely been priced into equity markets. What was less expected was the central bank's forecast of six additional hikes this year, three more than forecasted, as increased oil prices begin to bleed into inflation data. Stocks initially gave back previous intraday gains on the news but rebounded back again to finish strongly up for the...
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10th March 2022
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US Inflation nears eight per cent
US consumer price growth hit 7.9% ahead of a surge in energy prices following Russia's invasion of Ukraine, further raising pressure on the Federal Reserve to more substantively tighten monetary policy. It is now being marked as the fastest annual increase in CPI since 1982. Furthermore, the latest report was done prior to Russia's full-scale attack on Ukraine and the US and its allies' unveiling of the most punitive financial penalties ever levied on a country in retaliation. In addition to enforcing sanctions on Russia's central bank and ringfencing the country from the global financial system, the Biden administration this...
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24th February 2022
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Putin launches full-scale invasion of Ukraine
Vladimir Putin has begun a full-scale military invasion of Ukraine and demanded Kyiv's army lay down its weapons, starting what could be the largest conflict in Europe since the second world war. With bombardments of artillery, heavy equipment and small arms, Russian troops launched attacks from Ukraine's northern border with Belarus, across its eastern frontier with Russia, and in the south from Crimea, the Ukrainian peninsula Russia invaded and annexed in 2014. Major global powers have further condemned the actions of Russia, vowing to take ‘decisive action'. Markets have reacted to the most serious threat of a World War since...
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22nd February 2022
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Russia escalates Ukrainian tensions
Following weeks of increasing tensions between Russia and the West over the amassing of troops near the Ukraine borders in Russia, Crimea and Belarus, Russia has announced it recognizes the disputed regions of Donetsk and Luhansk as independent and begun moving in troops. The situation has hurt risk sentiment for weeks, with global equity indices moving to the downside, whilst safe havens such as gold and government bonds have seen gains. As Russia made its announcement, after a fiery speech from President Vladimir Putin, equity markets opened sharply to the downside, though recovered much of the losses throughout the day,...
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16th February 2022
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UK Inflation at highest rate since 1992
The Bank of England is under pressure to raise interest rates yet again after UK inflation accelerated to its highest rate in thirty years. Consumer prices rose at an annual rate of 5.5 per cent last month, up from 5.4 per cent in December and well above the 0.7 per cent in January 2021, data published by the Office for National Statistics showed on Wednesday. This data highlights that UK inflation was more than double the 2% target set by the central bank. Looking forward, inflation is expected to peak at about 7% in April when Ofgem, the energy regulator,...
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11th February 2022
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UK GDP rises faster than any time since World War 2
UK GDP rose 7.5% in 2021 compared with the previous year which was the strongest single years GDP growth going back to the second world war. However, this growth number was off the back of a 2020 number which was severely depressed because of the pandemic measures put in place. The bank of England said it expected the impact from Omicron to be erased by March this year, but that inflation was posing an ever-greater risk to household finances which has pulled forward expectations of another quarter point hike in March for the BofE
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4th February 2022
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US Jobs Numbers defies Omicron gloom
The US economy added 467,000 jobs last month, which was far better than expected performance for the labour market amid the surge in coronavirus cases due to the Omicron variant. The surprise jump in the payrolls defied predictions by economists surveyed by Bloomberg, who projected gains of 150,000 jobs. In addition to the jump in payrolls in January, there were also large upward revisions to data from previous months, while wage growth also rose more than expected. The unemployment rate ticked up to 4 per cent despite the strong gains, from 3.9 per cent previously. US government bonds sold off...
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3rd February 2022
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Bank of England raises interest rates again
The Bank of England has raised interest rates from 0.25% to 0.5% as it attempts to tame inflation. This is the first back-to-back interest rate rise since 2004 and thus intensifies the squeeze on household finances, with inflation forecast to increase to 7.25% in April. This all comes amid the perpetual concerns about inflation, which is threatening to fuel a cost-of-living crisis for British households. The Bank's Monetary Policy Committee voted on the rate decision today and the majority was slim, by five to four. The minority wanted an even larger increase to 0.75 per cent to get a further...
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2nd February 2022
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Eurozone inflation rises to a record 5.1%
Consumer prices in the eurozone rose a record 5.1 per cent in January from a year earlier. This was a result of steeper increases in energy and food prices, only partially offset by slower growth in prices of manufactured goods, meaning inflation rose from its previous eurozone record of 5 per cent in December. This was contrary to the widespread expectations for eurozone inflation to fall at the start of this year. Economists polled by Reuters had on average forecast eurozone inflation of 4.4 per cent in January. Markets this week therefore pulled forward expectations of tighter eurozone monetary policy,...
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19th January 2022
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UK inflation jumps to highest level in 30 years
The inflation rate for the UK jumped to 5.4 per cent in December, its highest rate in 30 years. The result of this is heightening a cost of living crisis and squeezing household incomes. The large annual rise in the consumer price index reflected widespread increases in the cost of most goods and services and again exceeded economists' forecasts of a small rise in December to 5.2 per cent from 5.1 per cent in November. Analyst's expectations for spring levels of inflation is to push even higher, in excess of 6 per cent, with gas and electricity prices being a...
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14th january 2022
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UK GDP returns to pre pandemic levels
GDP in the UK has come in above economists` expectations at 0.9% in November 2021, well ahead of the consensus 0.4% figure. This leaves the UK economy larger than before the Pandemic in the month just before the Omicron variant begun to sweep through the nation. Factors at play were early spending in the lead up to Christmas and increased spending on restaurant bookings. Production, Services and Construction all saw growth in the period, and notably Construction had recovered from a long string of lacklustre months dating back to April 2021. It is expected that due to restrictions surrounding the...
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12th January 2022
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US inflation at levels not seen since the 80’s
US consumer price inflation for the month of December has reached a level not seen in over 40 years with year on year inflation reaching 7% and month on month inflation hitting 0.5%. Despite these large increases the December increase of 0.5% was down from 0.8% the previous month and the yearly figure of 7% was in line with market expectations which caused little to no ripple through global stock markets. The Nasdaq actually found some strength amid the growth sell off which has griped this market. This number firmly puts the chances of a US hike in March on...
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7th January 2022
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US employment approaches pre pandemic levels
Markets continued their decent today with tech taking the brunt of the losses as US job data for December showed unemployment rate in the US at 3.9% which is just below the 3.5% pre pandemic unemployment level. Rises in hourly earnings also painted a positive picture of the labour market in the US. The market has seen this as evidence the FED now have all the reasons they need to raise rates sooner than the market expects with investors starting to price in a rise as soon as March. This move has prompted weakness in both US growth stocks and...
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