Walker Crips' Market Commentary

The Bank of England’s (“BoE”) Monetary Policy Committee meets this Thursday to determine the UK’s next interest rate decision, with markets broadly expecting rates to remain unchanged. However, a growing camp of analysts believes recent macroeconomic developments could tilt the balance towards a rate cut. Governor Andrew Bailey’s vote will likely prove decisive, though the contrasting stances of Deputy Governors Sarah Breeden (dovish) and Clare Lombardelli (hawkish) underscore the committee’s divisions. The meeting takes place against a backdrop of persistently weaker UK business sentiment, with the Institute of Directors’ (“IoD”) confidence index registering lower, close to September’s record low. On the inflation front, employers expect pay settlements to ease to 3%, and shop prices have fallen for the first time since March; both developments strengthen the case for a more dovish BoE stance...Stocks featured:Airtel Africa, GSK and WPPTo 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 presented a nuanced picture last week, with signs of stability tempered by persistent structural challenges. Inflation held steady at 3.8% year-on-year, below forecasts, fuelling speculation of a Bank of England (“BoE”) rate cut in December, with futures now pricing a 75% probability. However BoE officials remained cautious as Governor Andrew Bailey highlighted Brexit’s drag on growth, while Monetary Policy Committee member Megan Greene resisted quarterly cuts. Economic data were mixed, with the Purchasing Managers' Index rising to a two-month high (51.1) and retail sales surprising positively, while borrowing hit a five-year peak and construction activity reached an 11-year low. Consumer sentiment improved slightly, but UK public inflation expectations over the next 12 months climbed to 4.2%, underscoring the BoE’s delicate balancing act...Stocks featured:London Stock Exchange Group, Rentolkil Initial and FresnilloTo 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 presents a mixed outlook as the Bank of England (“BoE”) remains cautious about inflation persistence. Monetary Policy Committee (“MPC”) member Catherine Mann warned of clear upside risks to inflation and advocated maintaining tight policy, while fellow MPC member Megan Greene argued closer EU ties could boost productivity and ease price pressures. Chief Economist Huw Pill signalled a slower pace of easing amid uncertain shocks, and Governor Andrew Bailey faced scrutiny over policy direction at global meetings. Economic data were uneven, with unemployment rising to 4.8% and wage growth easing slightly, while gross domestic product rose 0.1% in August. Retail sales and consumer sentiment softened as household costs remained high, and grocery inflation accelerated to 5.2%. Business confidence weakened amid rising costs and potential tax hikes...Stocks featured:Endeavour Mining, Pearson and WhitbreadTo 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 continued to show signs of strain this week as growth indicators stayed subdued and business confidence weakened. The construction Purchasing Managers' Index rose slightly to 46.2, though activity remained weak amid soft residential and civil engineering output. Business sentiment fell to a three-year low, weighed by tax and inflation concerns, while footfall and retail demand declined. Labour market data revealed slowing wage growth and rising candidate availability, reinforcing softer employment conditions. The Bank of England (“BoE”) warned of risks from stretched artificial intelligence-related (“AI”) valuations, while policymakers Catherine Mann and Huw Pill stressed the need for restrictive policy to ensure inflation returns to target...Stocks featured:IAG, Imperial Brands and Unite 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.

This week US equities recovered their losses from the prior week. The S&P 500 and Nasdaq reached new record highs, with broad-based gains across the market. Small-cap stocks, as measured by the Russell 2000 Index, outperformed the broader market, signalling a renewed investor appetite for riskier assets. Headlines were dominated by the partial US government shutdown, which began after funding lapsed. Markets largely shrugged off concerns about the economic impact. However analysts noted that the current political gridlock could lead to a longer than average shutdown this time around...Stocks featured:AstraZeneca, JD Sports Fashion and MondiTo 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.

Global markets were mixed last week, with the US equity market ending lower. Investor optimism regarding the pace of future interest rate cuts was dampened by hawkish comments from several Federal Reserve ("Fed") officials. The S&P 500 finished the week lower, while the technology-heavy Nasdaq Composite fared worse, falling 0.9%. The Russell 2000 Index also registered its first weekly loss since early August. Fed Chair Jerome Powell noted on Tuesday that the economy is in a “challenging situation” due to near-term inflation risks and downside labour market risks. He also acknowledged that “equity prices are fairly highly valued.” Other regional Fed officials echoed these concerns, cautioning against further monetary policy easing amid persistently high inflation. Despite this, within the S&P 500, the energy sector rallied, advancing alongside oil prices in response to President Donald Trump’s call for European Union nations to cease purchases of Russian oil and gas. Most other sectors declined...Stocks featured:Antofagasta, Kingfisher and Metlen Energy & MetalsTo 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 continues to flash mixed signals, leaving the Bank of England (“BoE”) at the centre of investor attention. Governor Andrew Bailey stressed that interest rate cuts are “not yet over,” acknowledging softness in the labour market but remaining cautious over persistent inflation risks. The Monetary Policy Committee (“MPC”) voted 7–2 to hold the base rate at 4%, while slowing quantitative tightening (“QT”) to £70 billion annually from £100 billion to calm gilt market volatility. Economic data provided a similarly uneven picture. Retail sales surprised positively with a 0.5% month-on-month rise, driven by strong clothing demand, yet consumer confidence weakened as borrowing pressures and elevated prices weighed on households. Wage growth, now at its slowest pace in three years, underscores the fragile backdrop, while August government borrowing of £18 billion exceeded forecasts and highlighted fiscal strain...Stocks featured:Pets at Home, Spire Healthcare and TrustpilotTo 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 continues to show mixed signals, with labour market weakness increasingly evident. Data from the Recruitment and Employment Confederation and KPMG revealed starting salaries growing at their slowest pace since the Covid pandemic, while staff availability surged, reflecting cooling demand. Consumer trends remained fragile with Barclaycard reporting spending up just 0.5% year-on-year, well below inflation, and the British Retail Consortium’s shopper confidence index fell further as food price pressures persisted. Retail sales saw modest support from warm weather, but underlying volumes remained soft. July gross domestic product (“GDP”) was flat, dragged down by production, although services activity remained resilient. Infrastructure financing is surging, and fintech investment continues to perform strongly, providing pockets of growth even as inflation expectations rise and fiscal pressures mount...Stocks featured:Anglo American, Associated British Foods and BAE SystemsTo 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.

UK economic signals painted a mixed picture last week. Retail sales beat expectations in July, though sharp backward revisions tempered optimism, while Halifax data showed house prices at record highs despite affordability concerns. Yet headwinds remain, as employment contracted at its fastest pace in four years following the payroll tax raid and borrowing costs climbed, heightening the risks of a housing slowdown. Services Purchasing Managers’ Index (“PMI”) growth offered resilience, but manufacturing and construction remained weak, with cement production at 1950s lows. Bank of England (“BoE”) officials struck a cautious tone, signalling slower rate cuts and bond sales, as inflation expectations ticked higher, underscoring persistent structural fragility...Stocks featured:Admiral Group, Babcock International and FresnilloTo 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.