Market Summary Week Ending 14/05/2023

On Thursday, the Bank of England announced it would raise interest rates by a further 0.25% – from 4.25% to 4.50%. This is the twelfth successive increase, with the aim of bringing down the rate of inflation to the Bank’s long-term target of 2%.

The Bank now expects inflation to remain stubbornly high throughout the remainder of this year and has adjusted it’s end-of-year prediction with the expectation that inflation will be above 5%, compared with the 4% that was forecast back in February.

There was more positive news, however, as the Bank revised its position on future economic growth, forecasting that GDP will grow by 0.25% this year, with further growth of 0.75% in each of the next two years. This is an encouraging move from its’ previous prediction of eight consecutive quarters of falling gross domestic product.

Across the trading week, the FTSE 100 and 250 indexes closed down 1.2% and 1.4% respectively.

In the US, inflation data released on Wednesday showed that consumer prices rose 4.9% for the 12 months ending in April, the slowest pace of inflation in two years. However, core inflation, which excludes food and energy prices, rose 5.5%, which was higher than analysts’ expectations.

US Markets ended the week mixed, with the S&P 500 and Dow Jones Industrial Average posting small gains, while the Nasdaq Composite Index declined. The S&P 500 rose 0.2% for the week, the Dow Jones Industrial Average gained 0.1%, and the Nasdaq Composite Index fell 0.6%.

Please note for this weekly summary, we focus on the major indices within the financial markets such as the FTSE 100 (UK) and the Dow Jones and NASDAQ (US) to provide a factual account of what has happened within a certain index. Performance figures quoted are factual from the previous week’s trading and this summary is for commentary purposes only. 

The performance of these indices is not a representation of an individual fund or portfolio. Past performance is no guarantee of future returns. The value of your investment can go down as well as up. You could get back less than you originally invested.