I’m rarely short of a few words, but a lot has been going on this week with UK mortgage rates nudging upwards, mortgage arrears unsurprisingly hitting a 7-year high, US inflation being higher than expected, the India small caps market tumbling, and China’s markets outperforming the developed world.
Frequently, I get asked the question, “so what’s going on?” The answer is there are a lot of contrasting and contradictory factors, but some are more important than others, especially to the markets. Dominating sentiment is the much-improved growth outlook for the global economy.
Here is this week’s agenda:
- UK mortgage arrears
- UK wage growth slows
- M&S Chairman at odds with the Bank of England
- The economy is growing again
- US inflation
- US small businesses struggle
- A reset towards more growth
- China surging
- Copper prices surging
- How to play the Magnificent Seven
- Indian stocks tumble
- Summary
UK mortgage arrears
It’s no surprise that we are now reading headlines about UK mortgage arrears. According to the Bank of England’s (BoE) official data, UK mortgage arrears reached a 7-year high in the third quarter of 2023. By way of context, the proportion of mortgage arrears is well below the previous peak, in the first quarter of 2009.
The BoE data on Tuesday also pointed to weaker borrowing and demand from buy-to-let landlords but, of course, there are other issues unfolding in this market, particularly the onerous tax changes.
UK wage growth slows
Good news for the BoE and their fight against inflation, on the face of it anyway. UK wage growth, according to the Office for National Statistics (ONS), is slowing but it is still sticky.
Data also indicated that unemployment was 3.9% in the three months to January, up from 3.8% in the three months to December.
Continues….
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