From Morningstar: 2024-11-04 05:00:05

The Bank of England may slow its rate cuts after Labour’s Budget triggered fears of inflation due to higher borrowing. Employers’ national insurance contributions will rise, generating £25 billion. The Budget also included capital gains tax hikes, inheritance tax changes, and the end of the British ISA. Bond yields rose on increased government borrowing for public services. Equity markets reacted to sin taxes on gambling and oil companies. The government’s tough Budget aims to fulfill its mandate, with mixed reactions from fund managers. Bond managers suggest less aggressive Bank of England actions due to budget uncertainty. Market reactions to the Budget and US elections will drive bond yields. Inflation forecasts led to gilt market reactions, with expectations for fewer rate cuts. Gilt issuance is expected to increase, leading to curve steepening and potential outperformance. The government hopes for stability in bond and stock markets, attracting foreign investment. The market may reduce risk premia on UK assets, leading to falling yields over time. The UK remains positive on equities and gilts post-election. The Autumn Budget sees changes in Capital Gains Tax and Inheritance Tax that impact UK stocks. UK Equity Managers react to potential effects on AIM market, IHT, and business investment. Portfolio Managers discuss impacts on high-quality businesses and investors, as well as the need for more tax advice post-Budget. 1. In a recent study, researchers found that the average global temperature reached 1.5 degrees Celsius above pre-industrial levels in 2021. This increase is alarming and highlights the urgent need for countries to take action to combat climate change.

2. The latest job report shows that the unemployment rate has dropped to 4.2% in the United States, the lowest it has been since the start of the pandemic. This is a positive sign for the economy as more people are returning to work.

3. A new survey revealed that 70% of Americans believe that it is important for companies to take a stand on social and environmental issues. This indicates a growing trend of consumers wanting businesses to be more socially responsible in their practices.

4. The World Health Organization announced that over 900 million doses of COVID-19 vaccines have been administered globally. This milestone is a significant achievement in the fight against the pandemic, but there is still a long way to go in ensuring vaccine equity for all countries.



Read more at Morningstar: After the Budget, Where Next for UK Interest Rates?