Walker Crips' Market Commentary

Last week UK markets rallied as investors flocked to gilts, putting them on track for their best week since October, with benchmark yields falling more than 0.1% to nearly 4.4%. This fixed income resurgence was underpinned by a government pivot away from long-term borrowing and intensifying bets on an April rate cut from the Bank of England (“BoE”). Economic data supported the dovish outlook as th...

UK markets endured a cautious week as fresh data reinforced concerns about a softening economic backdrop and limited policy headroom. Surveys of economists pointed to a deteriorating labour market outlook, with unemployment expected to rise toward 5–5.5% by the end of 2026 amid weak growth and slowing wage momentum. Business sentiment also weakened, with a British Chambers of Commerce survey showi...

Last week the Bank of England (“BoE”) cut interest rates by 25 basis points to 3.75%, with Governor Andrew Bailey signalling optimism for hitting the inflation target by late spring and suggesting openness to further easing. This dovish shift, which also noted artificial intelligence-driven job displacement risks, contrasts with other policymakers' hawkish concern over "hot" wage growth. Analysts...

The past week revealed unexpected weakness in the UK economy, with Gross Domestic Product (“GDP”) contracting by 0.1% in October against expectations for modest expansion. The decline was driven by falls in both services and construction, alongside a steep 17.7% drop in motor vehicle production, as pre-Budget fiscal anxiety weighed heavily on output. Despite this immediate slowdown, the Confederat...

The past week saw increased regulatory focus and a cooling labour market. The Bank of England (“BoE”) launched a "system-wide exploratory exercise" to stress-test private equity and credit markets, which hold 15% of UK corporate debt. The exercise will be run over two rounds, allowing officials to examine the impact of a crisis on the private capital market as well as on the wider financial system...

The week was defined by Chancellor Rachel Reeves’ pivotal budget, which combined £26 billion in tax rises with increased spending commitments. Despite the Office for Budget Responsibility (“OBR”) upgrading 2025 growth to 1.5%, the reaction from the business community was negative. Following the tax rises, KPMG countered the OBR, warning growth will stall to 1% in 2026. Corporate sentiment crashed...

UK markets faced a difficult week as incoming data highlighted a loss of economic momentum ahead of this week’s Budget. The UK flash Purchasing Managers' Index (“PMI”) for November fell to a two-month low, with a slowdown in the services sector outweighing a modest recovery in manufacturing, signalling quarterly growth of just 0.1%. Retail sales fell 1.1% month-on-month, the first decline since Ma...

The case for a December Bank of England (“BoE”) rate cut strengthened significantly last week, as a string of data pointed to a stalling economy and a rapidly cooling labour market. Third quarter gross domestic product (“GDP”) growth fell short of expectations at just 0.1%, with the lack of momentum reflecting continued weakness. Further to this, UK unemployment figures rose to 5%, the highest sin...

The Bank of England’s (“BoE”) Monetary Policy Committee delivered a narrow 5–4 vote to keep interest rates unchanged at 4%, marking one of the most finely balanced decisions in recent years. The split highlights the delicate equilibrium policymakers face amid uneven data. The BoE signalled that inflation, last recorded at 3.8% in September, has likely peaked and is now easing, keeping a December r...

The Bank of England’s (“BoE”) Monetary Policy Committee meets this Thursday to determine the UK’s next interest rate decision, with markets broadly expecting rates to remain unchanged. However, a growing camp of analysts believes recent macroeconomic developments could tilt the balance towards a rate cut. Governor Andrew Bailey’s vote will likely prove decisive, though the contrasting stances of D...

The UK economy presented a nuanced picture last week, with signs of stability tempered by persistent structural challenges. Inflation held steady at 3.8% year-on-year, below forecasts, fuelling speculation of a Bank of England (“BoE”) rate cut in December, with futures now pricing a 75% probability. However BoE officials remained cautious as Governor Andrew Bailey highlighted Brexit’s drag on grow...

The UK economy presents a mixed outlook as the Bank of England (“BoE”) remains cautious about inflation persistence. Monetary Policy Committee (“MPC”) member Catherine Mann warned of clear upside risks to inflation and advocated maintaining tight policy, while fellow MPC member Megan Greene argued closer EU ties could boost productivity and ease price pressures. Chief Economist Huw Pill signalled...

The UK economy continued to show signs of strain this week as growth indicators stayed subdued and business confidence weakened. The construction Purchasing Managers' Index rose slightly to 46.2, though activity remained weak amid soft residential and civil engineering output. Business sentiment fell to a three-year low, weighed by tax and inflation concerns, while footfall and retail demand decli...

This week US equities recovered their losses from the prior week. The S&P 500 and Nasdaq reached new record highs, with broad-based gains across the market. Small-cap stocks, as measured by the Russell 2000 Index, outperformed the broader market, signalling a renewed investor appetite for riskier assets. Headlines were dominated by the partial US government shutdown, which began after funding...

Global markets were mixed last week, with the US equity market ending lower. Investor optimism regarding the pace of future interest rate cuts was dampened by hawkish comments from several Federal Reserve ("Fed") officials. The S&P 500 finished the week lower, while the technology-heavy Nasdaq Composite fared worse, falling 0.9%. The Russell 2000 Index also registered its first weekly loss sin...

The UK economy continues to flash mixed signals, leaving the Bank of England (“BoE”) at the centre of investor attention. Governor Andrew Bailey stressed that interest rate cuts are “not yet over,” acknowledging softness in the labour market but remaining cautious over persistent inflation risks. The Monetary Policy Committee (“MPC”) voted 7–2 to hold the base rate at 4%, while slowing quantitativ...

The UK economy continues to show mixed signals, with labour market weakness increasingly evident. Data from the Recruitment and Employment Confederation and KPMG revealed starting salaries growing at their slowest pace since the Covid pandemic, while staff availability surged, reflecting cooling demand. Consumer trends remained fragile with Barclaycard reporting spending up just 0.5% year-on-year,...

UK economic signals painted a mixed picture last week. Retail sales beat expectations in July, though sharp backward revisions tempered optimism, while Halifax data showed house prices at record highs despite affordability concerns. Yet headwinds remain, as employment contracted at its fastest pace in four years following the payroll tax raid and borrowing costs climbed, heightening the risks of a...

The UK economy presented a mixed picture last week as inflationary pressures persisted alongside signs of a weakening labour market. Food price inflation accelerated to 4.2% year-on-year, driven by higher global supply costs and seasonal pressures, while energy bills are set to rise by more than expected this winter, adding to household strains. Labour market data showed vacancies at a five-year l...

The S&P 500 index rallied on Friday to close 0.29% higher, recovering some ground after four consecutive days of losses. The technology sector led the decline earlier in the week as the artificial intelligence (“AI”) sector came under pressure, with the so-called “Magnificent Seven” stocks suffering a three-day sell-off. Concerns over future profitability combined with stretched valuations act...

This week the UK economy continued to present a conflicting picture, marked by both resilience and fragility. London bore the brunt of tax-driven job losses, shedding 45,000 roles since October, as payroll tax hikes and a higher minimum wage hit private employers hardest. Meanwhile, artificial intelligence (“AI”) is beginning to reshape the labour market, with technology and finance job postings d...

The UK ended last week with uncertainty surrounding the Bank of England’s (“BoE”) policy direction following a “hawkish” 0.25% cut to the interest rate, bringing it to 4%. The decision was narrowly split (5 votes to 4) and accompanied by higher near-term inflation forecasts and cautious guidance, leaving only a 50% chance of another rate cut this year. In September, the BoE may slow gilt sales, as...

The Bank of England (“BoE”) is reportedly considering slowing the pace of quantitative tightening amid rising gilt yields, with Deutsche Bank suggesting this could save the Treasury up to £5 billion next year. Meanwhile, economic signals remain mixed. EY upgraded its UK 2025 growth forecast to 1%, though momentum is expected to remain subdued. Retail sales remain weak, and business distress is ris...

UK economic sentiment remains subdued as Deloitte reported their UK consumer confidence index fell by 2.6 points to -10.4 by the end of last quarter and is now at its lowest level since the first quarter of 2024. The steepest declines were seen in perceptions of job security, which fell by 4.8%, and concerns over debt, down 3.7%. The Consumer Price Index (“CPI”) came in at 3.6% from 3.4% the month...

Last week UK economic data painted a mixed picture, with inflation and labour market dynamics pulling in opposite directions. Headline inflation unexpectedly rose to 3.6% in June, driven by higher food and wage costs, prompting criticism of Labour’s tax policy. However, unemployment climbed to a four-year high of 4.7%, while job hiring fell sharply and wage growth moderated - bolstering expectatio...