Please see below the latest Blackfinch Group – Monday Market Update, which was received this morning (25/07/2022):
UK COMMENTARY
- UK inflation hit a fresh 40-year peak of 9.4% in June, according to the Office for National Statistics (ONS). This was the ninth consecutive month-on-month rise for the consumer prices index, as the cost-of-living crisis worsened.
- Purchasing Managers Index (PMI) survey data for the manufacturing sector – which measures manufacturing output – fell to 49.7 in July, below the 50 mark that indicates an expansion. This was the first time the measure has fallen since the first pandemic lockdown in May 2020.
- The ONS reported a record surge in Britain’s borrowing costs in June, pushed up by soaring inflation. This put the government’s budget deficit on course to exceed £100bn this year, almost double its pre-pandemic level.
- House prices across the UK rose at an annual rate of 12.8% in May, up from 11.9% in April, according to the ONS. This pushed the average UK house price to £283,000 in May, £32,000 higher than the same time last year.
NORTH AMERICA COMMENTARY
- US existing home sales were weaker than expected in June, falling 5.4%. This was the slowest pace of sales since June 2020, when sales plunged at the start of the pandemic.
EUROPE COMMENTARY
- The European Central Bank (ECB) raised interest rates by a bigger-than-expected 0.5%. This was the central bank’s first rate hike in 11 years and was prompted after inflation for the eurozone reached 8.6% in June, far above the ECB’s 2% target.
- The European Commission proposed a major gas demand reduction plan to prepare the European Union (EU) for supply cuts from Russia. It urged EU member states to cut gas use in Europe by 15% until next spring.
- Eurozone’s PMI data signalled a contraction in business activity in July, adding to a string of poor economic results. S&P Global’s interim composite PMI fell from 52.0 in June to 49.4 in July, significantly below economist’s forecasts.
RUSSIA COMMENTARY
- Russia resumed critical gas supplies to Europe through Germany, reopening the Nord Stream gas pipeline. However, uncertainty over whether Europe could avert a winter energy crisis persisted.
Please continue to check our Blog content for advice and planning issues and the latest investment, markets and economic updates from leading investment houses.
Carl Mitchell – Dip PFS
Independent Financial Adviser
25/07/2022