Walker Crips' Market Commentary

Last week, Bank of England Governor Andrew Bailey downplayed the possibility of rate cuts this year, noting the central bank is comfortable leaving interest rates on hold. While inflation is expected to return to its 2% target later than preferred, markets have already tightened the bond yield curve. Soaring energy costs remain a concern, with upcoming price cap increases threatening to push milli...

Last week was marked by the Prime Minister Sir Keir Starmer’s resignation on Monday, despite the exit being expected, anxieties still developed and the British economy continued to stall under cost pressures. The initial hit to corporate confidence was laid bare by a sharp contraction in the flash June Purchasing Managers' Index, as it slumped to a 14-month low. Manufacturing orders hit a six-year...

Last week, Bank of England Governor Andrew Bailey defended the recent gilt sales programme, arguing that it remains broadly neutral for everyday taxpayers. While the Iran war threatens widespread price increases, the Monetary Policy Committee chose to hold interest rates. Soaring energy costs have fuelled worries about rapid deindustrialisation risks, which currently offshore roughly 25% of domest...

Last week, Bank of England Governor Andrew Bailey warned that Artificial Intelligence (“AI”) may need to be rationed due to energy capacity constraints limiting deployment. While the Iran conflict threatens widespread price increases, the Monetary Policy Committee expects no further interest rate increases. Workplace disruption has fuelled worries about rapid technological shifts, which currently...

Last week, Bank of England (“BoE”) Governor Andrew Bailey warned that the central bank must restore public confidence in its official 2% inflation target. This assertion follows new internal research detailing the high costs of bond liquidations. While the Iran conflict threatens widespread price increases, the Monetary Policy Committee (“MPC”) expects subsequent interest rate increases to follow....

Last week, Britain’s economic landscape continued to struggle due to the energy shock driven by the conflict in Iran, leading to Ofgem (“the Office of Gas and Electricity Markets”) announcing a 13% rise in energy bills. This and other inflationary measures mean the headline inflation will likely remain above the BoE’s (“Bank of England”) target for a fifth consecutive year. BoE Governor Andrew Bai...

Last week, Bank of England (BoE) Monetary Policy Committee (MPC) member Megan Greene warned that central banks could not dismiss ongoing supply shocks from the Iran war as temporary. This concern follows a major hit to private sector activity. While the Middle East conflict continues to drive energy prices higher, the domestic economy faces a rapid slowdown. Geopolitical uncertainty has fuelled wo...

Last week official figures showed slight economic growth in the first quarter, but more recent data reveals a sharp drop in consumer spending. Hit by the Middle East energy shock, April retail sales fell sharply, and card spending recorded its first annual decline. Forecasters warned that the broader geopolitical fallout could cost the economy over 160,000 jobs. This accelerated this week, as data...

Last week, Bank of England (BoE) Governor Andrew Bailey warned that insurers and pension funds have become dangerously intertwined with the private credit market. This concern follows a major hit to the financial sector earlier this year. While the Middle East conflict continues to drive energy prices higher, the Monetary Policy Committee (MPC) expects an economic slowdown. Geopolitical uncertaint...

Last week, Bank of England (“BoE”) Governor Andrew Bailey reiterated that the central bank is in no rush to raise interest rates. The recent surge in energy prices has created a significant supply-side shock, which Bailey and members of the Monetary Policy Committee (“MPC”) believe is better addressed through monitoring inflation risks rather than implementing an immediate tightening response. Pol...

Last week, the published economic data presented a misleading picture of domestic growth. The composite Purchasing Managers' Index ("PMI") unexpectedly jumped to a two-month high, driven by corporate panic as firms are stockpiling inventory due to supply chain fears, triggering the largest monthly surge in the Input Prices Index in nearly three decades. These costs are now trickling down to consum...

In the wake of the Middle East conflict, the UK economy is signalling heightened stagflation risks. This was backed by warnings from shipping experts, who noted that supply chain fractures guarantee at least six months of elevated food and fuel prices. The final composite Purchasing Managers' Index ("PMI") set to a six-month low of 50.3 as 40% of firms reported rising costs. Even with a fragile US...

In the wake of the Middle East conflict, the UK economy is signalling heightened stagflation risks. This was backed by warnings from shipping experts, who noted that supply chain fractures guarantee at least six months of elevated food and fuel prices. The final composite Purchasing Managers' Index ("PMI") set to a six-month low of 50.3 as 40% of firms reported rising costs. Even with a fragile US...

UK markets faced a sharp deterioration in sentiment in the final week of the tax year, as escalating tensions around the Iran conflict weighed heavily on business confidence. The Institute of Directors (“IoD”) index fell to a record low, reinforced by survey evidence from the Institute of Chartered Accountants in England and Wales (“ICAEW”), highlighting a rapid deterioration in corporate outlook....

Last week, the UK economy experienced high macroeconomic volatility as stagflation fears intensified after the Iran conflict disrupted global supply chains. March’s Purchasing Managers' Index (PMI) fell to a six-month low, while consumer expectations also dropped as households faced increases in energy prices. Initial panic over Bank of England (BoE) rate hikes, driven by the energy crisis, faded...

Last week, Bank of England ("BoE") Governor Andrew Bailey warned markets against getting excited on rate rises after the Monetary Policy Committee ("MPC") voted unanimously for a steady hand, keeping rates at 3.75%. A conflict-driven energy price surge has caused markets to factor in an interest rate hike by September, with up to three rises anticipated this year due to inflation fears. The UK lab...

The UK economy was hit by a stagflationary shock this week as Brent crude breached $100 a barrel. Even before the Strait of Hormuz crisis, official data showed Gross Domestoc Product (“GDP”) flatlined in January, missing the 0.2% growth forecast, leaving the country vulnerable to the energy supply squeeze. The Office for Budget Responsibility (“OBR”) warned the conflict could drive inflation up to...

Last week, Bank of England (“BoE”) policymaker Alan Taylor noted that the economic impact of the escalating Middle East conflict is uncertain, and that the UK faces downside growth risks if energy costs persist. A conflict-driven energy price surge has led markets to reduce expectations for a March rate cut to below 50%, with traders entirely pricing out a second rate reduction for 2026 due to spi...

Last week, Bank of England (“BoE”) Monetary Policy Committee (“MPC”) member Alan Taylor noted that inflation appears to be heading towards normalisation, paving the way for a potential dovish shift. Governor Bailey's belief that a fall in inflation is "baked in" has led markets to price in an 80% chance of a 25-basis-point interest rate cut on the 19th March. The UK labour market is weakening, wit...

Last week, Bank of England (“BoE”) Monetary Policy Committee (“MPC”) member Catherine Mann signalled she is edging closer to backing an interest rate cut, with markets now fully pricing in two reductions by year-end as inflation eases to 3%. The UK labour market is cooling, with unemployment at a cycle high of 5.2%. Small businesses anticipate job cuts due to April's increases in minimum wage and...

Last week, the Bank of England's (BoE) Deputy Governor, Sarah Breeden, signalled that interest rate cuts could arrive within the next couple of meetings as inflation eases, with markets currently pricing in two 25 basis point reductions this year. Elsewhere, Monetary Policy Committee (MPC) member, Catherine Mann, links US trade wars to UK inflation via higher Chinese export prices. The long-term l...

In the first week of February, the Bank of England held rates at 3.75% in a split 5-4 vote, with Governor, Andrew Bailey, stating a March cut was a “50-50 call”. Data shows actual business activity is healthy: the Services sector (54.0) and Manufacturing (51.8) are both well above the 50.0 neutral mark, indicating solid growth. The job market is also stabilising as hiring downturns ease. However,...

Last week, the Bank of England's (“BoE”) weekly short-term repo allotment hit a record high of over £100 billion, marking the shift to a repo-led system, while the BoE considers tokenised assets as eligible collateral. The UK labour market softening continued, with Adzuna reporting that December job vacancies fell 15% year-on-year to a 2020 low, as rising payroll costs slowed hiring. This supports...

Last week, UK economic data revealed a mix of rising price pressures and surprising resilience in activity. Inflation surprised on the upside in December with the headline Consumer Price Index (“CPI”) rising to 3.4%, driven by higher airfares and tobacco duty, a development likely to instil policy caution at the Bank of England (“BoE”) next month. However, economic activity accelerated, as the Jan...

Last week the Bank of England ("BoE") released data showing unexpected resilience in November’s gross domestic product ("GDP"), which expanded by 0.3%, surpassing the 0.1% forecast and ending a two-month decline. The growth was driven by a rebound in both services and manufacturing, aided by Jaguar Land Rover’s recovery following a cyberattack, despite ongoing structural risks. At the same time, B...