Last week, key economic updates highlighted mixed signals for the UK. Bank of England (“BoE”) Deputy Governor Clare Lombardelli expressed caution over wage growth trends, warning that a slowdown in wage disinflation might necessitate careful rate cut strategies. BoE official Swati Dhingra noted the UK is no longer an inflation outlier but stressed the difficulty of accurate inflation forecasting due to unreliable data. The Confederation of British Industry (“CBI”) painted a sombre picture, with surveys showing weakening sentiment in the retail and services sectors. Job cuts loom as firms grapple with tax hikes, while higher wages ahead of the holidays offer a short-term boost in hiring for sectors such as retail and hospitality. Consumer confidence waned slightly after the budget, reflecting concerns over economic stability. Despite reassurances about the financial system's resilience, the BoE’s financial stability report flagged heightened global risks, including geopolitical tensions and government debt vulnerabilities. This backdrop underscores challenges ahead for growth and inflation.

Stocks featured:

JD Sports, Kingfisher and Melrose Industries

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