UK Markets Chart Pack Rise in gilt yields and sterling won’t last Even though we expect the Bank of England to raise interest rates further from 3.50% now to a peak of 4.50%, we doubt the recent increase in gilt yields will be sustained. Instead, we think yields may... 21st December 2022 · 9 mins read
UK Markets Chart Pack A period of calm after the storm The reversal of Truss/Kwarteng’s fiscal policies and Rishi Sunak’s appointment as the UK’s new Prime Minister has ushered in a period of calm in UK financial markets after the recent storm. Indeed... 26th October 2022 · 10 mins read
FX Markets Focus What to make of the sterling quagmire While the UK government’s apparent U-turn on fiscal policy offers some hope of relief for sterling, we think the outlook remains precarious. We continue to expect that sterling will lose further... 20th October 2022 · 12 mins read
UK Economics Focus Medium-Term Fiscal Plan October 2022 – Preview As the new Chancellor, Jeremy Hunt, unveils whether, when and how he will put public debt on a sustainable path in his Medium-Term Fiscal Plan on Monday 31st October, the big question will be whether... 20th October 2022 · 15 mins read
UK Markets Chart Pack Markets at risk of more government-induced turmoil The Bank of England appears to have prevented the financial market fallout from the loose fiscal plans revealed in the Chancellor’s mini-budget from escalating into a full financial crisis. Since it... 29th September 2022 · 10 mins read
UK Markets Chart Pack Fall in gilt yields won’t last, equities to trough sooner Given our forecast that the Bank of England will raise interest rates from 1.25% now to a peak of 3.00%, we still think that gilt yields have further to rise. However, with attention in the markets... 29th July 2022 · 9 mins read
UK Markets Chart Pack Gilts to struggle sooner, equities to struggle for longer We haven’t changed our forecast that the Bank of England will raise interest rates from 1.25% now to a peak of 3.00% by the middle of next year. But we do now think that a number of other central... 23rd June 2022 · 9 mins read
UK Markets Chart Pack Markets too sanguine on interest rates Our new forecasts that inflation will stay higher for longer and that the labour market will remain tight into 2023 suggests that Bank Rate will rise to a peak of 3.00% next year rather than the peak... 29th April 2022 · 8 mins read
UK Markets Chart Pack Financial conditions as tight as after the Brexit vote The war in Ukraine has contributed to a tightening in financial conditions that will contribute to weaker GDP growth for the rest of this year and next year. Admittedly, a lot of the initial plunges... 29th March 2022 · 9 mins read
UK Markets Chart Pack Equities adjusting to the end of ultra-low real yields It is possible that equity prices will continue to struggle in the near term if central banks send more signals that they are willing to raise interest rates further in order to control inflation. But... 31st January 2022 · 8 mins read
UK Markets Chart Pack Investors spooked by Omicron risks The discovery of the Omicron COVID-19 variant in late November rattled UK markets. Equities tumbled, sterling weakened and corporate credit spreads jumped. And, while the initial reaction was not... 15th December 2021 · 8 mins read
UK Markets Chart Pack Investors overestimating interest rate hikes The extent of the shift in investors’ expectations of interest rates over the past month has been staggering. Investors are now pricing in an 80% chance of a hike to Bank Rate, from 0.10% to 0.25%, at... 22nd October 2021 · 8 mins read
UK Markets Chart Pack Worrying more about higher inflation The recent rises in 2-year and 10-year gilt yields to their highest levels since the “dash for cash” at the start of the pandemic have entirely been driven by the investors revising up their... 21st September 2021 · 9 mins read
UK Markets Chart Pack Markets to regain their poise as recoveries continue While the resurgence in COVID-19 cases that has recently weighted on UK equities, the pound and 10-year gilt yields is clearly a downside risk, our view that it won’t deal a big blow to the global or... 22nd July 2021 · 8 mins read
UK Markets Chart Pack Markets expect earlier rate hikes to quash inflation The combination of the Fed’s more hawkish tone and the larger-than-expected rise in UK CPI inflation in May to 2.1% has led the financial markets to bring forward their expectations of when the Bank... 23rd June 2021 · 8 mins read
UK Markets Chart Pack Rapid economic recovery to support equities Our view that the economy’s recovery from the COVID-19 crisis will be faster and fuller than most expect is consistent with UK equity prices continuing to rise over the next couple of years... 22nd April 2021 · 8 mins read
