12 September 2024
News
The UK jobs market remains robust, with wages rising 5.5% and unemployment down to 3.6%, its lowest level since 1974. However, with inflation sticking around 10%, the squeeze on disposable incomes continues to weigh on the economy. The government will deliver a mini-budget next Friday.
The Bank of England meet next Thursday, with the market favouring a 0.50% hike, though there is a real possibility of 0.75%. Further rate increases are expected in the months ahead, with the peak now expected to hit 4.40% mid-2023.
US inflation came in at a higher than expected 8.3%, leading to an aggressive sell-off in global equity and bond markets, and reinforcing the view that the Fed will hike by a further 0.75% next week, with rates forecast to peak around 4.45% next year.
The European Central Bank are also expected to continue their aggressive cycle of policy tightening following the unprecedented 0.75% increase earlier this month, as they focus primarily on inflation, despite the dire economic outlook and the huge concerns over gas supplies.
Market volatility remains at extreme levels on the huge uncertainty, with the global economy facing the unprecedented challenges of surging inflation, rising interest rates, war in Ukraine, lockdowns in China and the ongoing supply chain issues.
