Please find below our Investment Market Update as at 6th April 2023.
Is a credit crunch on its way?
The recent banking crisis has led to a tightening of credit. In other words, it’s not going to be as easy to borrow. There are concerns for businesses and households in that this could create a credit crunch.
Whether this manifests in a credit squeeze or a credit crunch is really in the hands of central banks. Continuing with interest rate hikes will likely create deeper and wider fractures across economies, with many corporate casualties. Not good for the stock market.
Pausing interest rates may seem wise with inflation falling but we have to remember that central banks are determined not to react too quickly because they are committed to controlling inflation and bringing the rate down to circa 2%. A balancing act indeed!
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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.