Last week, stock markets globally tumbled on fears of US and China recession dragging the rest of the world into recession.
We know that a slowdown is being forced with higher interest rates to curb inflation and FTSE 100 took it hard and fell to 7,397 on 4th October. A 2.77% fall in two weeks.
Surprisingly, this week the Office for National Statistics published GDP figures for August showing growth, albeit marginally at 0.2% pa, meaning the UK is likely still in or heading for recession, although we suggest this may be short lived. On the news, FTSE 100 bounced back today to 7,684. A swing of nearly 4% in just less than a week.
The UK is currently growing faster than France and Germany but we suggest the UK economy is still walking a tightrope. The news may ease pressure on the Bank of England to increase interest rates, provided inflation falls. UK inflation figures are due on 18th October with the Bank of England Monetary Policy Committed not due to meet again until the 2nd November.
We expect more fireworks until mid 2024 and hopefully, inflation and interest rates starting to slowly fall.