Mirroring the summary part of my Commentary last week, many analysts and economists have voiced their cautionary opinions after a surge in asset prices. Of course, we have to be guarded about left-field events, unexpected geopolitical conflicts, escalation of current conflicts and shocks to the economy but it’s important to balance this off with positive, ‘what if’ possibilities. It just seems that whenever there are surges in optimism, there is an avalanche of negative press!
Picking up on the Chancellor’s rhetoric this week, it would appear that we may avoid recession here in the UK, but the trade-off is that we’ll likely be consigned to sluggish growth over the next two years. The Autumn Statement was encouraging in some respects, in that it will stimulate corporate investment but at the same time, the Chancellor was wary of not embracing a Liz Truss style approach by going full tilt with supportive economic measures, not wishing to jeopardise the current downward trend of inflation.
I was going to leave the assessment of the Chancellor’s measures until next week to fit in with our monthly overview but that would be old news, so I have dedicated a good chunk of this communication to summarise the main points around wealth management and the broader economy.
As if to remind us of the delicate balance in the UK economy, energy regulator Ofgem announced the typical annual household bill would go up from £1,834 to £1,928 – a rise of £94 or 5%. As a result, bond yields rose slightly as this doesn’t help the inflationary cause.
This week’s agenda is as follows:
- Encouraging news regarding the UK economy
- Key wealth takeaways from the Autumn Statement
- Economic data is backward-looking
- Timing the markets is very difficult
- How have the markets fared over the last month?
Encouraging news regarding the UK economy
A recent survey from S&P Global/CIPS showed that the UK Purchasing Managers’ Index (PMI) reported a reading of 50.1 for November, higher than the 48.7 figure in October. Any figure above 50 shows that the private sector is growing.
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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.