Market insights

Market Comment -19th October 2022

Good morning,

This morning saw the UK's inflation at 10.1% year on year growth. Simply eye watering. This was even slightly beyond the consensus of 10% and further highlights rampant price increases. Not only felt at the petrol pump and home energy bills it's further reflected at the supermarket. This has caused an immediate, small weakening of the Pound. Whilst a higher number could indicate pressure on the Bank of England to raise interest rates this is already seen as a formality and a rate hike nailed on.

Traders of the Pound may well be keen on Prime Ministers question time later today. This is one of the first times the recently elusive Prime Minister will face a public grilling by her peers. Whilst she met her front bench yesterday to stave off calls for resignation, today could be quite tough for Ms Truss.

What could be a difficult question, and expect her to be harangued on this, will be the triple lock on pensions. The current system means pension growth is linked to the highest of 2.5%, average earnings or inflation. Any climb down from this could cause widespread backlash and has been kept relatively quiet by the Conservatives in the last couple of weeks.

Today sees UK house price data, European inflation, a speech by a member of the Bank of England and a speech by a member of the FED. This is followed by Japanese import and export data, and the Peoples Bank of China's interest rate decision in the early hours of tomorrow. The news flow is relatively strong at the moment so could result in ongoing volatility in the markets.


Today’s Economic Calendar

UK: 09:30 DCLG House Price Index

EUR: 10:00 HICP Inflation Data

UK: 16:00 BoE's Catherine Mann Speech

US: 23:30 FED's James Bullard Speech

JPN: Thursday 00:50 Imports and Exports

CHN: Thursday 02:30 PBoC Interest Rate Decision


As ever we look forward to keeping you in the loop and look out for our next update.

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