The latest updates and articles from Arbuthnot Latham
A mixed set of data for the UK this week, with inflation steady at a lower than expected 4%, whilst the jobs market remains surprisingly resilient, particularly pay growth, which increased by 6.2% excluding bonuses.
A relatively quiet week as the market continues to digest the recent central bank meetings and the implications for monetary policy.
The Bank of England kept policy on hold with a 6-2-1 split vote, and revised their forecasts for growth marginally higher, but said inflation risks remain to the upside.
UK data this week showed the economy remains relatively resilient given the challenges, with the market scaling back rate cut expectations.
Mixed UK data this week with headline inflation unexpectedly ticking up to 4.0%, whilst average earnings growth slowed to 6.5%.
Headline US inflation printed slightly higher than expected at 3.4%, dampening the prospect of an early rate cut by the Fed and pushing yields higher.
Markets begin the year with a risk-off tone as increasing geopolitical tensions and the rising threat of conflict spreading in the Middle East weigh on global sentiment.
The Bank of England kept interest rates at their 15-year high of 5.25% as widely expected, with a 6-3 split decision.
The market is ramping up the expected pace of interest rate cuts over the coming year as inflation continues to drop and stimulating economic growth becomes the focus for central banks.
Governor Andrew Bailey remains concerned with the supply side of economic growth, he reiterated that the central bank would ‘do what it takes’ to get inflation to the 2% target.
Last Wednesday’s drop in inflation to 4.60% was a clear turning point in Britain’s recent economic story.
UK headline inflation dropped sharply to a 2-year low of 4.6%, reinforcing expectations that the Bank of England has reached peak interest rates, with forecasters now pricing in an initial rate cut by June next year.
For business. For family. For life.
Follow us on social
Copyright © 2023 Registered in England and Wales No. 819519. Arbuthnot Latham & Co., Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Arbuthnot Latham & Co., Limited is on the Financial Services Register under Firm Reference Number 143336.