Economic Outlook and Market Commentary
As we begin 2023, it is essential to take stock of the economic and investment landscape. 2022 was marked by difficulties and challenges on multiple fronts. Inflation and high interest rates made their first appearance since the great financial crisis. The conflict in Ukraine weighed heavily on global relations and economic stability.
These and other factors have created a complex and dynamic environment for investors and businesses alike. However, despite these challenges, there are also numerous opportunities to be found for those willing to navigate these uncertain waters. This update will delve into the key trends and factors shaping the economic and investment landscape and provide insights and analysis on how best to position yourself for long-term success.
Inflation is coming down, but it may be sticky…
Inflation expectations have been a key focus in recent months. While we saw a peak of 11.1% in October in the UK, followed by a slight decrease to 10.7% in November, it is still too early to say that we have definitely reached a turning point. However, if we look at the US market as a leading indicator, there may be cause for optimism. As depicted in the chart below, US inflation reached a peak of approximately 9% in June but has since declined to the vicinity of 7%. This trend could potentially signal a turning point in inflation levels globally.
