Walker Crips' Market Commentary

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.

Summary:Last week UK stocks remained relatively flat, with the FTSE 100 index closing 0.3% lower. Sterling rose above $1.32, representing its highest level in over a year against the dollar. This increase was driven by rising expectations of an interest rate cut by the Federal Reserve ("Fed") next month. However, a stronger sterling added pressure to the FTSE 100, as many companies within the index generate a significant portion of their revenue globally...Stocks featured:JD Sports Fashion, Melrose Industries and RightmoveTo 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 economic landscape is currently marked by mixed signals, particularly regarding inflation and labour market dynamics. The Bank of England's (“BoE”) more hawkish member, Catherine Mann, remains sceptical about the disinflation process, highlighting persistent wage pressures that could take years to subside. Despite recent inflation data showing a slight dip, with July's rate coming in at 2.2%, lower than expected, and a softening in services prices, Mann's concerns echo broader caution within the BoE. Market expectations have echoed the recent cooling of wage growth and inflation, which now fully price in two BoE rate cuts by year-end, although the timing of these cuts remains debated.Stocks featured:Just Group, Playtech and Crest NicholsonTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/

Last week saw various economic developments, including the National Institute of Economic and Social Research (“NIESR”) publishing its forecast, predicting a slower interest rate cut cycle by the Bank of England than the market expects. NIESR anticipates that economic recovery will accelerate, prompting the BoE to maintain higher interest rates for a longer period. The Bank of England's interest rate is expected to decrease gradually, reaching 4.6% in 2025 and 4.1% in 2026, before bottoming out at 3.1% in 2028. Additionally, economists are divided on the BoE's next rate cut, with mixed views on the timing and size of potential easing, though domestic inflationary pressures seem to be receding.Stocks featured:Beazley, Hikma Pharmaceuticals and Spirax GroupTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/

The Bank of England ("BoE") recently made its first rate cut in over four years, stirring cautious optimism about the UK's economic future. Although BoE Chief Economist Huw Pill acknowledged an improved outlook, he noted the growth rate remains modest at around 1% annually from 2024 to 2026. The narrow 5-4 vote for the rate cut underscores persistent inflation risks. Surveys show a slight decline in firms' expectations for wage growth and inflation. The BoE's survey revealed expected wage growth fell to 4.1% and the one-year-ahead consumer price index dropped to 2.5%. Similarly, the Citi/YouGov survey showed stability in one-year inflation outlooks and a minor rise in long-term expectations, reflecting the BoE's increased confidence in disinflation.Stocks featured:Melrose Industries, Haleon and EntainTo find out more about the investment management services offered by Walker Crips, please visit our website:https://www.walkercrips.co.uk/