GOVERNMENT CONCEDES TO WINDFALL TAX AS FULL REPORT INTO LOCKDOWN PARTIES IS PUBLISHED
This week we got the classic one-two of British politics, a big scandal followed by a big policy announcement. The publication of Sue Gray’s long- awaited report into partying in number 10 painted the government, and particularly the prime minister’s office, in a terrible light which no doubt will have political ramifications down the line.
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MORE VOLATILITY AS MARKETS FLIP BETWEEN FEAR OF INFLATION AND FEAR OF RECESSION
This week we got a preview of the dynamic that will probably come to dominate markets through 2022, violent swings as investors flip from worrying about inflation to worrying about recession and back again.
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GOVERNMENT BONDS RALLY AS INFLATION HOGS THE HEADLINES ONCE MORE
This week we have seen inflation dominate financial markets again. US inflation fell, slightly, although it remains at the highest level in decades. Markets are mulling whether this is a quirk in the data or a sign that inflation is peaking.
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CENTRAL BANKS SPARK EXTREME VOLATILITY AND POINT TO THE CHALLENGES AHEAD
This week the war in Ukraine has had a significant impact on markets as Russia suspended gas flows to Poland and Bulgaria. The move increases the risk of a large energy disruption in Europe, which until now had seen supplies remain stable.
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UK ECONOMIC RECOVERY SLOWS AS CONSUMER CONFIDENCE IS KNOCKED BY RISING PRICES
This week the war in Ukraine has had a significant impact on markets as Russia suspended gas flows to Poland and Bulgaria. The move increases the risk of a large energy disruption in Europe, which until now had seen supplies remain stable.
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UK ECONOMIC RECOVERY SLOWS AS CONSUMER CONFIDENCE IS KNOCKED BY RISING PRICES
This week we got more evidence that the gloss might be coming off the economic recovery from the coronavirus. Following on from disappointing growth figures last week, this week there were reports of sharply slowing retail sales and a plunge in consumer confidence.
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THE UK’S LONG-TERM ENERGY STRATEGY AIMS TO END RELIANCE ON FOREIGN ENERGY IMPORTS
This week we finally saw the long-awaited long-term energy strategy for the UK. The government’s plans to make 95% of the UK’s energy production low carbon foresees a huge increase in offshore wind production allied to a big increase in nuclear power, including a move to small modular reactors.
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NO SIGNIFICANT CHANGES THIS WEEK GIVES MARKETS TIME TO DIGEST RECENT EVENTS
This week there was little in the way of new information to move markets very much – more inflation statistics were released but didn’t tell us anything we didn’t already know.
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Spring Outlook
Markets had a poor start to 2022. The main concerns at the beginning of the quarter were rising consumer prices and how this would impact central bank monetary policy; but this quickly turned to concerns about the unfolding crisis in Ukraine following the Russian invasion.
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UKRAINE INVASION GENERATES MORE VOLATILITY BUT MARKETS REMAIN FOCUSED ON INFLATION
This week saw the war in Ukraine drag into its second month. Putin’s plan for a swift victory are now stuck in the mud around Kyiv as the beginning of spring sees no obvious end to the conflict.
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