With the US inflation figure falling for consecutive months, the data out on Wednesday confirmed inflation eased to 5.0% YoY in March, its lowest level in almost two years, and lower than the expected 5.2%. With prices still rising, albeit at a slower rate, the US Federal Reserve is still expected to raise interest rates at their next opportunity in May.
A revised figure for the UK’s gross domestic product was also released this week, which confirmed the UK economy has finally risen back above pre-pandemic levels. The economy ended February 2023 0.3% bigger than in February 2020, just before the first pandemic restrictions began in the UK. It was previously estimated by the Office for National Statistics that the economy was 0.2% below this level, so this positive news was very welcome.
Also in the UK this week, industrial action continued, this time with the junior doctor’s 96-hour strike. The British Medical Association is pushing for a 35% pay rise to compensate for 15 years of pay erosion, but Downing Street has said the demand is “out of step with other workers in the public sector” and they “cannot negotiate from that start point”, as criticism grows that neither side is willing to begin talks.
US corporate earnings season kicks off today with results from big Wall Street banks including JPMorgan Chase, Citigroup, and Wells Fargo, which investors will be keen to examine to gauge the effects of last month’s banking crisis. Tesla, IBM, and Johnson & Johnson are among the big companies to watch reporting next week.
Andrea Wood, BSc (Hons) / Chartered MCSI