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Please see below, an article from Blackfinch Group detailing the market developments across the globe over the past week – received late this morning – 21/03/2022

  • The Bank of England raised interest rates by 0.25% to 0.75%, the third increase in a row, and in line with market expectations. Eight of the nine members of the Bank’s Monetary Policy Committee voted for the increase, with only Sir Jon Cunliffe voting to keep rates on hold.
  • Unemployment fell in the three months to January, according to the Office for National Statistics. The unemployment rate fell to 3.9%, down from 4.1% previously, and below the forecast of 4%. The number of UK employees on payroll increased by 275,000 in February to a record 29.7mn.
  • The UK government imposed further sanctions on Russia, announcing a ban on exports of some luxury goods to Russia, as well as adding a 35% tariff on various Russian imports including iron, steel, white fish and spirits.
  • The US Federal Reserve (Fed) announced its first interest rate hike since 2018, increasing the rate by 0.25%, bringing its target range to between 0.25% and 0.50%. With inflation at its highest level in decades, Fed officials are now pencilling at least six more interest rate increases this year.
  • The US Producer Price Index rose in line with expectations in February, increasing from 9.7% to 10% year-on-year.
  • Retail sales increased at a slower pace of 0.3% in February. Most economists had expected an increase of 0.4%. However, the January retail sales figure was revised up from 3.8% to 4.9%.
  • Weekly unemployment claim figures came in better than expected at 214,000, compared to forecasts of 220,000.
  • China reacted to its worst COVID-19 outbreak since 2020 by putting 17.5mn people in the city of Shenzhen into lockdown and telling all non-essential businesses to close or suspend production.
  • Chinese vice premier Liu He announced that more measures would be rolled-out to boost the economy, as well as introducing favourable policies to support capital markets.
  • Oil prices retreated below $100 per barrel midweek, amid hopes of a positive outcome to peace talks between Ukraine and Russia, as well as expectations that further lockdowns in China would slow demand. The US and Iran were also in talks regarding a nuclear deal which could see further oil exports come to market.
  • Fears of a bond default by Russia eased as £117mn of interest payments were made to international investors on Friday, two days after the due date. The payments were made in US dollars, allaying fears Russia would attempt to pay in roubles, which would have triggered a technical default.

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Alex Kitteringham

21st March 2022