The big news this week we thought was to be Wednesday’s inflation data for the UK. Whilst the drop in inflation was widely expected it is undoubtedly good news for the economy and mortgagees, although the numbers did disappoint the markets. The good news is that inflation is now 2.3% (forecast was 2.1%), a long way off the peak at 11.1% in October 2022.
Upstaging the inflation numbers was the big announcement from Rishi Sunak, with the UK election to be held on 4th July.
No doubt there will be a raft of tax cuts ahead of this date, but the International Monetary Fund (IMF) has warned the government about being too adventurous due to the size of the fiscal deficit.
AI (Artificial Intelligence) is once again highlighted in this update, amid challenges that these companies are increasing their carbon footprint. Do the advantages outweigh the disadvantages?
This week’s agenda:
- Inflation falling but undershoots forecasts
- The election is less than 2 months away!
- IMF warn against tax cuts
- Nvidia rises again post-market
- AI… is it good or bad for the environment?
Inflation falling but undershoots forecasts
You may be wondering why UK domestic stock market indices fell yesterday when we had two positive announcements, one on inflation and one on the general election. To be fair, the markets didn’t react much to the late afternoon election statement, grabbing their interest was the inflation data. Although inflation fell to the lowest in three years, the numbers weren’t as good as expected.
It is now expected that a drop in UK interest rates will be delayed, probably until August and as a result the pound strengthened by about 2%. A contributing factor also being stronger economic growth data.
Continues…
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