Making sense of this crazy world
Déjà vu
Today is the 146th day of the Iranian war and it feels like nothing has really changed. Lots of words, lots of rhetoric, but no progress. Oil prices have yo-yoed. Inflation forecasts have done the same and, lo and behold, bond prices/yields have followed suit.
Further impacting confidence this week were reports that The Houthi Militant Group in Yemen claimed strikes on Saudi oil tankers in the Red Sea. The Houthi are backed by Iran.
Just to help matters, Trump has announced new tariffs for up to 60 trading nations too.
Thank goodness that corporate earnings have been strong, which has meant share prices have largely proved resilient. The markets had priced in a successful peace resolution and, until that materialises, it’s difficult to see what would take equities much higher after a good run.
The Magnificent Seven struggled again, and overnight they suffered their biggest one day drop since April 2025.
Consumer confidence in the UK though has been boosted with retail figures rising. The wall-to-wall sunshine, the football and Andy Burnham were the major contributing factors.
Finally, we’ll take a look at the portfolio which appears effective for all seasons. Strategies which combine growth and income are appearing more attractive in times of uncertainty. I’ll explain what this means below.
This week’s content:
- Inflation falls again in the UK
- European rates remain on hold, but expect them to rise
- Shares in UK defence group rise
- Burnham leads the way
- How to win friends
- Magnificent Seven don’t look so magnificent!
- The portfolio for all seasons
- Conclusion
Inflation falls again in the UK
This week, we welcomed the latest inflation data which showed the UK Consumer Price Index falling to 2.6% in June, from 2.8% the previous month. However, it was the falling oil price which was largely responsible (Office for National Statistics).
Importantly, the inflation data has landed ahead of the Bank of England’s Monetary Policy Committee meeting on 30th July.
George Brown, Senior Economist at Schroders said “this rear view picture does little to clarify the current dynamics”. Adding, “for the Bank of England, the crucial question is whether this remains an energy shock or becomes a domestic inflation problem”.
Continues…
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.