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 142 | 15th May, 2023
UK COMMENTARY
- The Bank of England increased interest rates by a further 0.25% to 4.5%, in line with market expectations. The vote among Monetary Policy Committee members was 7-2 in favour of a hike, with the
remaining members voting to keep rates on hold.
- The Office for National Statistics (ONS) reported UK gross domestic product (GDP) rose 0.1% in the first quarter of the year, meeting economists’ forecasts, with the UK economy contracting 0.3% in March.
- House prices declined 0.3% between March and April according to the latest data from Halifax, reversing part of the 0.8% increase in the previous month.
- A report from the National Institute for Economic and Social Research suggested inflation may not return to the Bank of England’s target 2% until late 2025, and forecasted inflation would be at 5.4% at the end of 2023.
- Consumer sentiment improved in April, according to data from YouGov and the Centre for Economics and Business Research. The latest consumer confidence index increased from 99.4 to 101.3, with a reading of over 100 being a positive score.
- Data from the British Retail Consortium showed retail sales held steady in April, with spending at its members’ stores increasing by 5.1% on an annual basis, the same as March’s figure. However, the data is not adjusted for inflation, suggesting volumes have actually fallen.
NORTH AMERICA COMMENTARY
- In the US , consumer price inflation fell by 0.1% to 4.9% in April, the lowest in two years. Core inflation, which excludes
food and energy, also fell from 5.6% to 5.5%.
- US Treasury Secretary Janet Yellen again warned about the risks of the US government defaulting on its debt if an agreement to increase the debt ceiling was not reached. Yelled suggested a default would undermine America’s ability to provide ‘international leadership’ and hurt national security.
- US consumer confidence as recorded by the Michigan Consumer Sentiment index fell from 63.0 in April to 57.7 in May, significantly below the 63.5 reading expected by economists.
ASIA COMMENTARY
- Chinese imports fell 7.9% year-on-year in April, compounding the 1.4% fall in March. Forecasts had expected imports to remain
unchanged.
- Inflation in China rose just 0.1% in April, the lowest in two years, while producer prices fell 3.6%, pushed down by continued manufacturing weakness.
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