Ear to the Ground
We start with the UK this week where, as expected, the Bank of England hiked rates by a further 0.25% to 4.5%. This was the 12th consecutive rise, with there again being split opinion, with 7 voting in favour of the hike whilst 2 voted in favour of no change.
Ear to the Ground
It was more about economic growth rather than inflation when it came to data released and there were a few surprises. In the US we saw the release of the first estimate for first quarter GDP.
Ear to the Ground
It was more about economic growth rather than inflation when it came to data released and there were a few surprises. In the US we saw the release of the first estimate for first quarter GDP.
Ear to the Ground
Further interest rate hikes were back on the cards in the UK after stronger than expected UK inflation data. Firstly we had average earnings figures where, excluding bonuses, we saw a 6.6% increase, year on year.
Ear to the Ground
There were mixed feelings surrounding the US inflation data released this week. Pleasing the market, we saw the annual rate of inflation fall for the ninth consecutive month to 5%, the lowest level recorded since May 2021.
Ear to the Ground
Weaker economic data set the tone for interest rate expectations in the US last week. Firstly, we had the Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI). This came in at 46.3 for March.
Ear to the Ground
After the events of the previous two weeks a quieter few days was probably in order. In the UK, economic data was on the lighter side.
Ear to the Ground
The central banks of the US and UK continued their battle against inflation this week, both lifting their key interest rate by 0.25%. This took the US Fed Funds Rate to 4.75%-5% and the UK base rate to 4.25%.
Ear to the Ground
There are some weeks when content for Ear to the Ground is hard to come by. This week is certainly not one of those weeks. We touched upon Silicon Valley Bank (SVB) in our previous edition. The UK arm was successfully sold to HSBC.
Ear to the Ground
This week we heard from Jerome Powell who provided his update to Congress. Here he confirmed that he was prepared to increase the pace of interest rate hikes if the data warranted this.
