isk sentiment has turned more positive following the Fed minutes this week, which showed most officials leaning towards a slower pace of rate hikes and led to a relief rally in global equities and a generally weaker US dollar. Further lockdowns in China will remain a drag on global growth but have largely been overlooked by markets.

In the UK, economic data remains dire, but was slightly better than expected, and we fully expect the Bank of England to raise rates by a further 0.50% next month, with inflation expected to remain above 10% well into next year. Analysts forecast rates to peak around 4.50% mid-2023.

In the US, a rate hike of 0.50% is fully priced in for December, with markets forecasting a peak of 5% next year despite hopes that inflation has already peaked. The thanksgiving holidays have led to a general drop in liquidity as traders begin to focus on the end-of-year and risk mitigation.

The European Central Bank also looks set to raise rates by at least 0.50% in December as they remain fully focussed on stubbornly high inflation at the risk of a deeper recession.