Labour have won the 2024 UK General Election with a significant majority – gaining over 400 seats and an estimated 35% of the vote. From taxes and pensions to how the stock market has reacted, here’s what a new Labour government could mean for you and your money.
The Bank of England has just voted to hold interest rates at 5.25% for the third time in a row. The US central bank has signalled it could start cutting interest rates next year if inflation continues to fall.
October may have been a month to forget, but November was certainly one to remember. In fact, 2022 was a whole year to forget for investors. This year, on the other hand, has very much been characterised by returns on risk assets – US technology in particular.
As the Treasury and the country more widely gear up for the Autumn Statement, the UK is on a glide path to normal inflation levels. Pay rises are now outstripping inflation by the highest levels for two years, and the current interest rate hike cycle appears to have peaked. It’s been a good month so far – the best this year. Will December deliver further gains?
Governor of the Bank of England Andrew Bailey has described the outlook for UK economic growth as “subdued”, but he expects inflation to fall to around 3% and for it to stay at that level throughout most of next year – above the 2% target rate. However, he has warned that if the Israel-Hamas conflict spreads throughout the Middle East, it could have a knock-on effect on energy prices.
An escalation of the Israel-Gaza war into a broader conflict could deliver another shock to world growth and halt disinflationary forces in their tracks. Market reaction has been modest so far… but that could change.
The outbreak of military conflict in the Middle East may leave central bankers battling new inflationary trends as well as deal a blow to economic confidence at a time when they had expressed growing hope about containing the price surge sparked by the pandemic and Russia’s 2022 invasion of Ukraine.
