AUGUST 2022

Market and economic summary
Global markets experienced a volatile August and ended the month lower. Investors turned their focus to the hawkish comments received from the US Federal Reserve’s Jerome Powell at the Jackson Hole Economic Symposium. Concerns surrounding higher interest rates for longer to tame inflation, exacerbated worries about possible recessions and a slower growth environment. This led to a period of risk-off sentiment, leading global markets lower, particularly towards the second half of August. Many global equity markets erased the strong gains recorded at the beginning of the month.

Global inflation prints continue to remain elevated. The annual inflation rate in the US slowed to 8.5% (year-on-year to the end of July), which was below market consensus of 8.7%. Whilst in the UK, inflation increased to 10.1% (year-on-year to the end of July), ahead of market expectations and the highest reading since 1982. The annual inflation rate in the EU increased to 9.1% in July of 2022, which is a new record high and continues to be driven primarily by energy costs, which have risen by 38.3% over the past year.

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