Our monthly read on what moved investment markets over the past month and what it could mean looking ahead. This issue looks back at June.
In this issue
The Bank held rates again as stronger first quarter growth came into view, all against a backdrop of political upheaval at home. We cover why inflation came in below forecast but is still expected to climb, a retail rebound helped by warm weather, and softer business activity that points to a more cautious second half.
The month in numbers
The Bank held Bank Rate at 3.75 per cent in a seven to two vote, with the Governor warning that higher energy prices have already put inflation pressure in the pipeline. Inflation held at 2.8 per cent in May, below the 3.0 per cent expected, though core inflation edged up to 2.6 per cent. Confirmed figures put first quarter growth at 0.6 per cent, led by services. Retail sales bounced back on the warm weather, up an estimated 1.2 per cent in the month, but the composite PMI slipped to 49.4, its weakest in over a year, with services activity at a 41 month low.
