Walker Crips' Market Commentary

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.

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/

A Reuters poll showed most economists are expecting a Bank of England ("BoE") interest rate cut, with mixed UK data causing some to push expectations from August to September. The absence of comments from BoE Governor, Andrew Bailey, due to the election, has deprived the market of crucial signals. Despite a two-month high in the UK's purchasing managers index ("PMI"), driven by new business growth, uncertainty remains over the BoE's decision, with market odds of a rate cut at approximately 40%. Former BoE Monetary Policy Committee member Sushil Wadhwani suggested Labour should allow the BoE to set its inflation target to boost credibility and reduce borrowing costs. Ernst & Young has upgraded its UK economic outlook, predicting 1.1% gross domestic product ("GDP") growth in 2024 and stable inflation near the BoE's 2% target. However, the International Monetary Fund warned that higher growth is needed to avoid a fiscal gap.Stocks featured:NatWest, Compass Group 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.

On Friday, a global IT outage linked to issues with a CrowdStrike cybersecurity update affecting Microsoft software disrupted businesses and services worldwide. In the UK, train companies, major airlines, airports and GP surgeries experienced significant disruptions, with Edinburgh and Birmingham airports particularly affected. Financial sectors were hit as major oil and gas trading desks in London and Singapore faced outages, and the London Stock Exchange Group's Workspace platform experienced service interruptions. Even media outlets were impacted, with Sky News temporarily going “off-air”...Stocks featured:Burberry, Dunelm Group and Ocado 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 latest UK gross domestic product (“GDP”) estimate showed a 0.4% expansion in May, surpassing expectations due to growth in industrial production, services and construction. Over the past three months, GDP grew by 0.9%, the strongest since January 2022, with services contributing significantly. This aligns with purchasing managers index data, highlighting the services sector's role in the economic recovery...Stocks featured:Jet2, Liontrust Asset Management and HuntingTo 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.