In the latest edition of Voices of Moneyfarm, we recap this week’s coverage across national and international media outlets.
First up is UK CPI, a headline measure of inflation, which surprised many analysts by coming in at a higher-than-expected rate, as the battle to quell the rampant inflation we saw last year continues. Our CIO Richard Flax commented:
“Headline inflation in the UK for December came in hotter than expected, at 4.0% against a 3.8% estimation, and core inflation was also up to 5.1% against a 4.9% estimation. The surprise uptick in December was led by higher tobacco and alcohol prices and marks the first time annual inflation has accelerated since February 2023.
The battle against inflation is rarely a straight line, and today’s data from the UK is similar to the readings from the US and Eurozone – where both of them saw an uptick in December. On a more positive note, producer prices came in below expectations – and that will give some comfort to inflation optimists for the future. Despite that, the December CPI readings should reduce the likelihood of an early cut from the Bank of England.”
The US, too, published its monthly inflation figures this week with Richard commenting: “The rise in headline inflation should dampen expectations for an imminent rate cut as the Fed will be conscious of pinning inflation down to its two percent target before releasing the pressure.” You can read the full story here on Yahoo! finance.
Meanwhile, Richard also spoke to Investment Week magazine, engaging in a wide-ranging debate with eight other experts on what happened to the Chinese economy in 2023. He said:
“Policy decisions play an important role in many markets and China is no exception. Over the past couple of years, we have seen action in the technology, education and property spaces.
When we look back at 2023, we can see a couple of important drivers.
First, we saw the re-opening of the economy from its Covid restrictions. That prompted a wave of optimism among investors that we would see a significant acceleration in growth driven by pent-up demand.
At the same time, we saw significant challenges in the property sector, partly driven by tighter restrictions on the sector.
Those challenges have impacted consumer confidence and have spilled over into the wealth management space.
The result has been that the economic recovery has been more muted than many had expected.“
You can read the other experts’ views as part of the debate in the full article on the Investment Week website.
*As with all investing, financial instruments involve inherent risks, including loss of capital, market fluctuations and liquidity risk. Past performance is no guarantee of future results. It is important to consider your risk tolerance and investment objectives before proceeding.
