I’m sorry to mention it again, but the up-and-coming budget, now only a week away, remains the focus of attention. The UK market hasn’t exactly surged since the election on 4th July, and lags both the S&P500 Index in the US and the German DAX. Whilst the hope was for a period of stability and change that would bring investors flocking back to UK companies, what we appear to have received instead is a period of economic doom mongering and a rumour-filled run up to the Budget. The cause of current uncertainty for investors likely stems from a sense that Labour still hasn’t figured out exactly what it wants to do.
Leaving aside the concerns over possible changes to capital gains tax and pensions, this is Labour’s chance to convince investors that it has a plan that will work. A plan that will deliver lasting growth and a plan that the government bond market can support. A plan that will hopefully be revealed next week.
Perhaps this lack of confidence is unwarranted though? UK wage growth declined slightly during the three months to the end of August, and UK CPI figures last week undershot the Bank of England’s 2% target, coming in at 1.7%. This was the first time inflation has been below 2% since April 2021 and helps add to the widespread belief that interest rates will be cut again at next month’s meeting, offering a boost for businesses and consumers alike.
To finish on a lighter note, October brought us a Hunter’s Moon, offering a prolonged period of light that hunters once used to track prey and stockpile food for the winter months. Depending on what happens over the next couple of weeks, it might just be that for investors – there are still plenty of bargains worth hunting for.