July 2023
- The rate of Inflation has fallen in the US but not in the UK, and base rates are 5% in the UK and set to move even higher. It seems Andrew Bailey was too late to increase interest rates, which means they must go higher and stay there longer. Interest rates rising means Sterling should strengthen which is good, as the UK starts to venture overseas for the holiday season, but a recession and more job losses are likely, although there is little sign of this contraction now. It’s a fact the UK has the highest inflation rate in the G7 and the highest rate in Western Europe. However, the figures we will see in August covering the period to July should see a noticeable drop in inflation.
- There is no clear idea where markets are headed right now, when or if a recession will occur in the US and if so, how deep it will be.
- Whilst the tensions between China and America have improved slightly, the geopolitical risks remain. I don’t need to mention the craziness of the Wagner Group rebellion I’m sure, and the continuing damaging war in Ukraine. Our hearts and minds are still with those brave Ukrainians.
- Japan is doing well, and most if not all of our client portfolios have a good footprint in Japan as well as Europe. Europe is technically in recession as it has suffered two consecutive quarters of economic contraction. Our portfolios also have good exposure to Tech stocks which seemingly have shrugged off the discounting that occurs when interest rates rise.
- At annual review FFP continue to adjust client portfolios that consider the changes to the global economy as referred to above.
Please note that:
- This information in isolation is not financial advice.
- Past Performance of investments is not to be relied on and the value and the income from investments can go up as well as down.
- It is advisable to regularly review your investments.
