Walker Crips' Market Commentary

Last week, UK inflation figures surprised on the upside, with the headline Consumer Price Index showing 4%, surpassing the consensus estimate of 3.8%. Core inflation also exceeded expectations at 5.1%, deviating from the forecasted 4.9%. Despite the increase, economists caution against overinterpreting this data, as inflation is projected to reach the Bank of England's (“BOE”) 2% target by the spr...

According to the latest figures announced by the Office of National Statistics last week, the UK economy grew by 0.3% in November 2023, surpassing the expected 0.2% expansion by economists polled recently by Reuters, after contracting by 0.3% in the previous month. The services sector, buoyed by robust performances in retail, car leasing and computer games, played a pivotal role in this recovery....

The first week of the new year unveiled a mixed outlook for the UK economy as surveys of economists published in the Financial Times and The Times portrayed a consensus on sluggish growth in 2024, teetering on the edge of a technical recession. Analysts anticipate gross domestic product growth between 0% and 1%, with a looming general election adding a layer of uncertainty. The Bank of England (“B...

Last week saw the Bank of England ("BOE") stand firm on its key rate, leaving interest rates unchanged at 5.25% and dismissing talks of imminent rate cuts, a day after the Federal Reserve signalled its intention to cut rates in 2024. BOE Governor Andrew Bailey emphasised the ongoing fight against inflation, challenging investors who had increasingly bet on rate cuts. Despite BOE warnings, traders...

The UK economy shows promising signs of stabilising following the recent economic slowdown induced by soaring inflation and successive interest rate hikes. At the Bank of England’s (“BoE”) upcoming monetary policy committee meeting this week, the committee is expected to keep interest rates on hold as wage growth remains relatively high and inflation levels remain elevated. The British Chamber of...

Bank of England (“BoE”) Governor Andrew Bailey and Deputy Governor Dave Ramsden last week underscored the challenges ahead in taming inflation. Bailey, in an interview with The Chronicle, acknowledged the difficulty of the next stage in the fight against inflation. While welcoming recent data, Bailey was sceptical that the 2% target will be achieved any time soon, predicting inflation to stand at...

As per a City A.M. poll last week, economists project Bank of England (“BoE”) interest rate cuts between May and August next year, contrasting with market expectations of a move from March. BoE policymakers remain cautious about high wage growth and persistent inflation concerns and view the ongoing Gaza conflict as a significant risk to inflation targets. The potential for an earlier rate cut hin...

Last week saw the UK October inflation figures witness a significant drop, with the headline Consumer Price Index (“CPI”) standing at 4.6% year-on-year, below the consensus expectations of 4.8% and a substantial decrease from the prior month's 6.7%. Core inflation also moderated to 5.7% versus a consensus estimate of 5.8% and September’s 6.1% reading. The breakdown from the Office for National Sta...

Last week, Bloomberg Economics conducted an analysis revealing that the latest forecasts are indicative of turbulent times ahead for the UK economy, with key indicators suggesting that the country may already be in the midst of a recession. After a period of aggressive monetary tightening and rising unemployment, households are becoming more cautious about spending, posing a significant challenge...

Last week saw the Bank of England (“BoE”) decide to keep interest rates steady at 5.25% for the second consecutive meeting, in line with expectations. The BoE's assessment notes that while there have been no significant changes in inflation since September, underlying inflation remains elevated, and the potential for secondary inflation effects to unwind is prolonged. The BoE also highlighted the...

The UK's economic landscape experienced several developments last week. Borrowing costs surged to their highest point in 25 years as the 30-year UK gilt yield reached 5.209%. This increase mirrored global trends as investors worldwide anticipate interest rates will remain at elevated levels for a longer period than first expected. Despite this, a Reuters survey of economists indicated that the Ban...

September brought an unexpected twist to the UK inflation narrative, with a surprising increase to 6.7% year-on-year, slightly surpassing consensus expectations of 6.6%. The service sector, which saw increasing prices, was noted as the primary driver. While this may encourage a more hawkish stance within the Bank of England (“BoE”), wage growth indicated signs of slowing, suggesting a potential ea...

The International Monetary Fund (“IMF”) released its World Economic Outlook last week, which provided a comprehensive perspective on the global economy. While the outlook has shown some balancing since earlier this year, downside risks persist. The report highlighted the limited room for policy errors and delved into the consequences of tightening policies on both inflation and economic activity....

Rishi Sunak's Conservative Party conference speech last week marked the beginning of his election campaign. He outlined a bold agenda, including tax cuts, education reform and a substantial £36 billion investment in northern and midlands transport infrastructure. This investment came as a result of the decision to cancel the northern leg of the HS2 railway project, which stirred mixed reactions an...

Last week saw mixed signals for the UK economy as the job market displayed signs of cooling. According to an update from the Recruitment and Employment Confederation (“REC”), job postings rose by 13.5% in the week ending 17th September but remained below earlier-year averages, with 175,000 new job adverts posted, down from over 200,000 on average earlier in the year. The REC Chief Executive, Neil...

Last week saw inflation and interest rates take centre stage as the latest figures were released. Forecasts at the beginning of the week showed that August inflation was expected to accelerate to 7% from a prior reading of 6.8% in July, with economists attributing the acceleration to rising fuel prices. However, August inflation came in weaker than expected at 6.7% alongside a much softer core inf...

Last week saw UK equity markets in positive territory as the FTSE 100 closed the week 2.1% higher as markets continue to anticipate that the Bank of England (“BoE”) is approaching the end of its rate tightening cycle. An article published by Bloomberg discussed recent rhetoric from BoE policymakers and noticed that there is a change in tone alongside more clarity on the debate facing the Monetary...

The British Chamber of Commerce (“BCC”) published updated economic outlook figures last week which highlighted an expectation that the UK economy will avoid a technical recession. However, growth is set to remain weak. Figures state that the UK is expected to have a growth rate of 0.4% for the whole of 2023, dropping to 0.3% in 2024 and rising to 0.7% in 2025. The BCC also revised inflation figure...

Last week saw the FTSE 100 rise 1.6% amid hopes that global economies are nearing the end of the monetary tightening cycle. Growth within the UK equity market has been relatively flat since the start of 2023, with the FTSE 100 increasing by approximately 0.5% over the year to date. Persistent high inflation and aggressive monetary tightening by the Bank of England (“BoE”) have been the main factor...

The UK market experienced a relatively quiet week last week as the FTSE 100 closed approximately 1% higher at 7,339. Inflation and interest rates continue to be the main influencing factors at present with the market continuing to forecast UK interest rates peaking at 6%. The Times reported on the most recent Office for National Statistics (“ONS”) inflation data published last week which suggested...

BAE Systems, the defence, aerospace and security company, announced it has agreed to purchase Ball Corporation’s aerospace business for approximately $5.55 billion in cash. The company said that it entered into a definitive agreement to purchase the unit, which manufactures instruments and sensors for everything from space travel to weather forecasting. The acquisition is expected to add to BAE’s...

Bank of England (“BoE”) chief economist, Huw Pill, said last week that UK inflation remains too high and too persistent, especially as food prices may not decline in the short term. Pill stated that food price inflation may decline to 10% this year, but actual disinflation in food prices may not occur for some time after this. The BoE now forecasts that inflation will decline to 5% by the end of t...

BAE Systems, a defence, aerospace, and security company, saw its share price increase by approximately 8.7% last week after announcing first half results which beat market expectations. The company also raised its guidance for full year sales, underlying Earnings Before Interest and Taxes (EBIT), Earnings Per Share (EPS) and free cash flow. The dividend also increased by 11% when compared to last...

Ocado Plc, the UK based technology-led software and robotics platform, features again in this week's market commentary as its share price surged approximately 42.1% last week. The company has received a wave of positive news recently including rumours of a potential bid from Amazon, better than expected earnings and a positive settlement hearing which have all contributed to the strong share price...

Ocado Group, the UK based technology-led software and robotics platform business, saw its share price soar by approximately 15% after announcing first half earnings. One of the main positive takeaways from the results was that Ocado has been delivering on its promise of reducing its cash burn. The company also announced that group revenue grew by 9% year on year, with its Technology Solutions divi...