Your August guide to the UK economy, giving you a monthly overview of the major trends impacting the UK's main business sectors.
Global markets saw a bout of summer turmoil
It’s been an eventful month in global equity markets, which tumbled in early August. We put together a note for CBI members unpicking this, but to recap: disappointing jobs data in the US raised investors’ concerns over recession risks, and whether the Federal Reserve was behind the curve in keeping interest rates unchanged in July. In contrast, the Bank of Japan raised rates unexpectedly on 31st July – this pushed the Yen higher, hitting the revenues of Japanese exporters which dominate its stock markets. The rate rise also led to an unwinding of “carry trades”, where investors borrow in a country with low interest rates (Japan) to invest in ones with higher rates (US and elsewhere). The market rout was exacerbated by anxiety over the anticipated economic boost from artificial intelligence, hitting the stocks of tech companies, and thin summer trading volumes.
While th
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