Economic Update

Key Takeaways The closure and wind-down of Silicon Valley Bank (SVB) has led to some considerable stress in global equity markets, particularly among shares of regional banks, as well as fear of contagion. There are unique elements to SVB that contributed to its demise, including its client base and risk controls. While we are likely…

Pensions Download the latest update and tax tables here. Lifetime allowance The Chancellor announced today that from 6 April 2023 no-one will pay a lifetime allowance charge. From 6 April 2024, the lifetime allowance will be abolished and a future Finance Bill will remove the lifetime allowance completely from pensions tax legislation. The current 55%…

UK The Office for National Statistics (ONS) reported that gross domestic product (GDP) grew 0.3% during January, after shrinking by 0.5% in December. This was a faster recovery than expected and a firm move away from recession territory. The Royal Institute of Chartered Surveyors (RICS) house price balance, which measures the difference between the percentage…

Mood swings Bond and equity markets have been experiencing teenager-like mood swings for some time now. Investors have oscillated between optimism over the surprising resilience of consumer demand and relative company earnings stability, and pessimism that the same economic resilience will force central banks to keep raising rates for longer. Last week, focus shifted back…

Balancing acts Last week saw global equity markets give back some of February’s earlier gains. Even so, global equities have made a total return of around 5% in £-sterling terms since the start of the year. Over the past fortnight though, market participants have come to accept inflation – and in its wake interest rates…

Markets acknowledge the enduring stickiness of inflation After a surprisingly strong start to the year in January, February has brought market consolidation rather than a continued uptrend – despite the FTSE100 finally passing the psychologically important threshold of 8,000 points. In last week’s digest we wrote that the prevailing ‘Goldilocks’ market sentiment of not-too-hot (growth,…

A challenging week brings investors back down to earth For most of this year, investors have ran with the notion of a decline in longer-term inflation pressures, but they have been less convinced in recent days. As a result, bond and equity markets slipped back last week, despite the FTSE 100 reaching a new all-time…