3 October 2022
An explanation to last week’s financial market events…………… Given the events of last week we felt it appropriate to communicate to our clients a summary of last week’s events in financial markets. You will no doubt be well aware of the recent ‘mini budget’ announced on Friday 23 September and the subsequent fallout and impact this has had to our financial sector. You will also have heard about increased market volatility over recent months in the wake of political instability in Eastern Europe following Russia's invasion of Ukraine. In addition to this the growing cost of living crisis which is putting people’s finances under greater pressure. All of this may impact your ability to save as well as the valuation upon your existing savings/pension fund/other investments and it can understandably be worrying to see short term fluctuations in value. However, it is important not to panic and consider the current volatility in relation to your long-term investment goals and objectives. For anyone who is investing over the longer-term, short-term ups and downs should be expected. The current situation in respect of the fallout from the mini budget combined with ongoing events in Eastern Europe may lead to a period of ongoing market volatility but making short term investment decisions may have an impact on longer term investment goals All things considered though, we are of the opinion that there are reasons to be optimistic about investing, specifically in the UK markets at this time, despite the turmoil of the past week. The beginning of last week saw a great degree of volatility resulting in the Bank of England intervening which calmed the markets. This uncertainty led to various banks withdrawing mortgage products as they anticipated higher interest rates as part of the Bank’s attempts to bring inflation back under control. We understand that you may well have been alarmed by the media coverage of these events, who, once again, in our opinion, manage to whip the public up in to a state of frenzy and fail to explain the whole picture. This article is designed to provide you with a professional insight and our thoughts and views on this.