Walker Crips' Market Commentary

The construction and infrastructure services company Morgan Sindall Group saw a share price rise of 14.91% last week following a strong trading update. The update highlighted better-than-anticipated performance, prompting analysts to increase earnings per share (“EPS”) forecasts for 2024 and 2025 by 7%. The company’s Fit Out division showed robust growth, with an order book worth £1.3 billion, up 15% from the end of 2023. Additionally, the Partnership Housing division is expected to deliver slightly higher profits. Analysts noted Morgan Sindall’s strong management track record and lower one-off costs compared to peers, emphasising the company’s good value proposition.Bloomsbury Publishing, publisher of books and reference databases, saw its shares jump 12.54% last week after the company reported stronger-than-expected trading performance for fiscal 2025. The publisher, known for the Harry Potter series, announced that profit attributable to owners rose to £16.6 million in the first half of fiscal 2025, up from £11.2 million a year earlier, with revenue increasing to £179.8 million from £136.7 million. EPS improved significantly, and the board proposed an increased interim dividend. Bloomsbury expects full-year results to exceed the market consensus of £319.3 million in revenue and £37.5 million in profit, boosting investor confidence...Stocks featured:Morgan Sindall Group, Bloomsbury Publishing and Close Brothers GroupTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

Last week's UK economic data painted a mixed picture ahead of the Bank of England's (“BoE”) November policy meeting. Inflation has dropped below the 2% target for the first time since 2021, reaching 1.7%, driven by lower energy costs and eased supply chain pressures. Meanwhile, a notable minimum wage hike has underpinned pay growth for low-wage workers, despite broader wage growth moderation. As the labour market is easing, economists increasingly expect a BoE interest rate cut, with markets pricing in a 90% chance of two 0.25% reductions by year-end. Retail sales defied expectations, rising 0.3% in September, driven by strong demand in electronics. While the BoE previously signalled potential rate cuts contingent on inflation trends, the cooling data has solidified expectations of a dovish policy shift in the coming weeks.The upcoming 30th October UK budget is shaping up to be a pivotal moment, as Rachel Reeves navigates a challenging fiscal landscape with a £22 billion fiscal deficit. To address this deficit, proposals include raising employer national insurance contributions and increasing capital gains taxes on share sales, which could generate significant revenue. However, the proposals have faced pushback from business leaders and investors, with concerns over potential job losses and investment impacts being raised. The recent inflation decline below 2% has reinforced expectations for BoE rate cuts, potentially easing pressure on fiscal policy but also reducing tax revenue from inflation-related income. Meanwhile, the International Monetary Fund warned the UK of potential market backlash if debt stabilisation efforts fell short, adding urgency to Reeves’ fiscal plans...Stocks featured:Future, St. James's Place and XPS Pensions GroupTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

The UK economy returned to growth, expanding by 0.2% after two months of stagnation, according to reports from The Times, Reuters and Bloomberg. This growth was driven by strong rebounds in manufacturing and construction, despite weaker-than-expected growth in the services sector. Retail sales showed resilience, rising 2% in September, the fastest in six months, as retailers geared up for the Christmas season. However, concerns remain as the British Chambers of Commerce reported declining business confidence, driven by fears of tax hikes in the Labour government's upcoming autumn budget and geopolitical uncertainties. Meanwhile, Kantar data highlighted renewed pressure on consumer budgets, while prices fell for household and pet products. The economic outlook remains mixed as businesses and consumers navigate these challenges.Stocks featured:Carnival Group, Greencore Group and Senior GroupTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

Lloyds' Business Barometer indicated a dip in UK business confidence in September, the lowest level in three months. The data suggests businesses are cautious about the broader economic outlook but still expect strong trading, highlighting concerns over inflation, investment, and potential fiscal policy changes ahead of the upcoming budget. Bank of England ("BoE") Chief Economist, Huw Pill, struck a cautious tone on the rate outlook, warning against cutting interest rates too quickly or too far. He stressed the need for a gradual withdrawal of monetary policy restriction, citing concerns over wage data and services price inflation. In contrast, Governor Andrew Bailey suggested that the BoE could cut rates more aggressively if inflation data continues to improve, leading economists to predict rate cuts at every meeting until May 2025....Stocks featured:BAE Systems, BP and JD Sports FashionTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

Last week saw the Bank of England (“BoE”) maintain a cautious tone on the future trajectory of interest rates. Governor Andrew Bailey noted that while inflation has made significant progress toward the BoE’s 2% target, a gradual approach to interest rate cuts is necessary to ensure sustainable price stability. His comments come after the BoE decided to keep rates unchanged last week, following a 0.25% cut in August. Expectations are now centred around a neutral rate of 3% to 3.5%, with Bailey indicating that near-zero rates are unlikely to reoccur barring a significant economic downturn.Stocks featured:Card Factory, Accesso Technology Group and HalmaTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

The Bank of England ("BoE") has left policy unchanged in the short term. Still, it may accelerate rate cuts in the final quarter of 2024 with weakening economic momentum, cracks in the labour market, and softening manufacturing outputs signalling a need for further easing. However, persistent inflationary pressures, especially in core and services prices, keep policymakers cautious. Market expectations of rate cuts are rising, with economists predicting the bank rate could fall as low as 3% next year. BoE's Catherine Mann remains cautious on a rapid rate cut cycle though, advocating for maintaining restrictive policy to curb inflationary behaviour. Meanwhile, fiscal concerns grow as the BoE's quantitative tightening programme will cost the UK Treasury billions. Despite these challenges, hiring across more sectors has picked up, reflecting some resilience in the economy...Stocks featured:Bytes Technology Group, Close Brothers Group and Wizz AirTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

The Bank of England (“BoE”) is  texpected to hold interest rates at 5.00%his week, with economists forecasting further rate cuts in its November and December meeting, potentially bringing the year-end rate to 4.50%. Attention is also on the BoE’s quantitative tightening plans, as there are growing calls to increase the sale of short-dated gilts to boost market liquidity. Investors are watching whether the BoE will accelerate bond runoff next year, in response to a sharp rise in maturing bonds.Stocks featured:Kier Group, Renishaw and TrainlineTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

Recent data from Reed Recruitment shows UK wage growth is no longer declining and is now stabilising, which may pose a challenge to the Bank of England (“BoE”) and Prime Minister Keir Starmer. As sectors like construction and hospitality face skill shortages, rising wages could force a rethink on easing policies. Despite this, analysts remain optimistic about the economic outlook, citing strong balance sheets, a rebound in business investment and stabilising inflation. A BoE survey also indicated that companies expect price increases to slow, even as wage growth holds steady at 4.1%, which has been unchanged since July. Business uncertainty has decreased post-election, and investors are anticipating a potential BoE interest rate cut in November, though further cuts may not come soon...Stocks featured:Ashtead Technology, Genus and Kainos GroupTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.

Summary:The UK experienced a combination of positive and negative economic indicators. The government faces the difficult task of balancing the budget, which could lead to tax increases and spending cuts. Various factors, including financial data, political developments, and corporate earnings impacted global markets. US equities experienced a mixed performance, while oil prices fluctuated. The UK housing market is showing signs of recovery, with increased listings, buyer demand and mortgage approvals...Stocks featured:Bunzl, EasyJet and JD SportsTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344) and is a member of the London Stock Exchange.