Macro Minutes: UK Market Volatility

Key Points

  • The UK faced significant headwinds as the year progressed and grappled with slowing economic growth and hotter inflation than developed nation peers, leading to increased market volatility and investor fear.
  • UK yields rose significantly following the announcement of a new budget, while yield curves in the US and Europe reacted on a smaller scale indicating a lack of systemic disruption.
  • Funding costs for the UK remain relatively low, significantly below the 40-year average, allowing the government to continue borrowing relatively cheaply and likely be able to pay its debts for the foreseeable future.
Investing in financial markets involves a risk of loss and there is no guarantee that all or any invested capital will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.