Published On: 15 January 2024

As the new year unfolds, positive signs of easing inflation crises worldwide are emerging. However, sluggish economic growth persists in crucial markets, prompting a closer examination of recent performances across the globe. 

United Kingdom:
The UK faced a 0.3% economic contraction in October 2023, posing challenges to sustained growth efforts. While inflation slowed to 3.9% in November, it remains nearly double the Bank of England’s 2% target. High-interest rates persist, impacting households and businesses. The housing market shows potential, with rising house prices suggesting a peak in interest rates. Government regulatory efforts face scrutiny, and financial services gain support through new international agreements. 

Europe:
European economic growth remains sluggish, with the eurozone experiencing a 0.1% GDP decline in Q3 2023. Inflation improvement is noted, and the European Central Bank maintains a 4% interest rate. Trade agreements, membership talks, and military aid debates shape the EU’s economic landscape. Regulatory actions are taken against social media platforms, impacting market dynamics. 

United States:
The US economy forecasts a 2.1% growth in 2024, surpassing earlier predictions. The Federal Reserve maintains interest rates, signalling potential cuts if inflation decreases. Positive retail sales and job market indicators contribute to economic stability. Industrial disputes resolution impacts sectors, while potential mergers shape the film and TV industry. Financial markets witness gains, reflecting economic optimism. 

Far East: 
China’s mounting debt concerns prompt credit rating adjustments, and geopolitical tensions persist. Japan faces economic challenges, with declining GDP and ongoing inflation. Hong Kong and Japan’s financial markets witness fluctuations. 

Emerging Markets: 
India outshines with a predicted 6.3% economic growth, fuelled by infrastructure projects. Brazil faces a slight GDP decrease, influenced by falling interest rates. Russia’s resilient economy confronts international sanctions. Emerging markets experience diverse economic trajectories. 

As global markets navigate challenges and opportunities, staying informed about economic indicators, geopolitical dynamics, and market trends becomes paramount. Investors must adapt strategies to the evolving landscape for financial resilience and success in 2024. 

If this affects you and you’d like to discuss our opinion on this fund and how it may or may not continue to fit your investment goals or risk tolerance, please call us on 01420 83517 or email info@murdochasset.co.uk


Sources: http://murdochasset.co.uk/wp-content/uploads/2024/01/MarketCommentaryJan2024.pdf

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