Weekly Market Update 18/10/2024

In official data released on Tuesday by the Office for National Statistics, UK wage growth (excluding bonuses) was shown to have fallen to 4.9% in the three months to August, in line with analyst expectations. This is compared to 5.1% in the three months to July. Including bonuses, the latest figure was lower at 3.8%, but this was skewed by large one-off bonuses received by public sector workers last year.

At their meeting held on Thursday in Slovenia, the European Central Bank has lowered interest rates to 3.25%, a quarter percentage point cut, as confidence grows that Eurozone inflation is finally weakening and concerns increase that economic growth has slowed. The last cut was made just five weeks ago, and little additional data has been released since then, suggesting that this move was more to tackle the weaker economic outlook rather than targeting inflation, according to Carsten Brzeski, global head of macro at ING.

British retail sales registered their third consecutive month of growth, increasing by 0.3% in September. This could be partly attributed to purchases of smartphones, following the release of the new iPhone 16. Economists had forecast a contraction of 0.3%, but instead the data showed the highest sales volumes since July 2022. Although sales of technology grew, supermarket spending fell, with retailers citing bad weather and households cutting back on luxury food items. Although consumer confidence waned during September over concerns surrounding the upcoming Budget, this does not seem to have fed through to consumer spending.

Andrea Wood, Chartered MCSI
Investment Manager