Providing you with a short summary of events from around the world. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

Blackfinch Group
Monday Market Update

The ever-changing world we live in reinforces the importance
of regular up-to-date communication. This weekly news update from our
multi-asset portfolio managers provides you with a summary of global events
 for your reference and to share with clients.

Issue 128 | 30th January, 2023 

UK COMMENTARY

  • The inequality of income in the UK increased last year, returning to pre-pandemic levels in March 2020 as shown by official figures. Inequality rose by 1.3% to 35.7% in the 2022 financial year compared with 2021, according to the Office for National Statistics (ONS).
  • This was driven by decreased average disposable income in the poorest fifth of households (3.4%), due to reduced original income and cash benefits. Conversely, there was an increase in disposable income of the fifth richest households of a similar magnitude (3.3%), driven by increased original income.
  • UK factories reported stable output volumes in the quarter to January, after falling in the three months to December (weighted balance of -1% from -9%), according to the Confederation of British Industry (CBI)’s latest industrial trends survey. Cost and pricing pressures in manufacturing remain high but showed some signs of easing.
  • The UK’s public finances have worsened notably, as reported by the ONS. The government borrowed £27.4bn in December, the highest December figure on record, largely due to spending on energy support schemes and higher debt interest.

NORTH AMERICA COMMENTARY

  • The US Bureau of Economic Analysis reported that Core Personal Consumption Expenditures (PCE) inflation fell to 4.4%, from 4.7%, while the three-month annualised rate dropped to 2.9%, providing further evidence of slowing US inflation. The latter was still higher than the US Federal Reserve’s 2% target but nevertheless a near two-year low. 
  • The US economy expanded at an annualised rate of 2.9% in the fourth quarter of 2022, faster than the 2.6% forecast by economists, according to the US Commerce Department. This followed 3.2% growth in the third quarter.
  • The US Labor Department recorded 186,000 claims for unemployment benefits last week, the lowest number since April 2022, versus expectations of 205,000.
  • The Bank of Canada raised interest rates by 25 basis points to 4.5%, its highest level in 15 years. After the eighth consecutive rate hike, the central bank said it would pause to assess the impact of the rate rises – but was “prepared to increase the policy rate further if needed to return inflation to the 2% target”. CPI inflation in Canada has surged to 7.8%.
  • The S&P Global PMI – which measures business activity – improved slightly, but stayed in negative territory. The index rose to 46.6 from 45.0 in December (any reading below 50 points to contraction).

EUROPE COMMENTARY

  • Sweden’s economy ended 2022 on a weak note, with Gross Domestic Product (GDP) shrinking 0.6% in the last quarter – measured by from the Swedish Statistics Office – as inflation and the war in Ukraine hit households and businesses.
  • In Germany, business morale has brightened this month, as Europe’s biggest economy began the new year with easing inflation and an improved economic outlook. The IFO Institute stated its business climate index rose to 90.2 points in January from 88.6 in December.

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