Market update - end of August 2018

Posted by siteadmin on Friday 7th of September 2018.

With the new series of Strictly Come Dancing about to grace our Saturday night TV screens, August saw Theresa May make a three-nation tour of Africa where she was promoting trade ties.  However, it was her dance moves, referred to as the Maybot, which grabbed all the headlines.

Whether this impacted the performance of global stock markets is unlikely, but the FTSE 100 had a difficult August, ending the month at 7,432.42, which was 4.1% lower than the July closing figure of 7,748.76.

In contrast, in the US, the Dow Jones Industrial Average’s performance was up 2.2%, closing August at 25,964.82.

In terms of £ Sterling, it ended August at 1.30 US Dollars.  This was 1.2% lower than the closing figure at the end of July of 1.31 US Dollars.

Against the Euro, it was a similar story with £ Sterling ending August at 1.12 Euros, which was 0.5% lower than the July closing figure.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 2.3% in July 2018 (this is July’s data which is reported in August).  This was unchanged from the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 2.5% in July 2018, up from 2.4% in June 2018.

The Bank of England increased interest rates to 0.75% in August.  This is the first time ever that the headline base rate has been 0.75%.  While this is expected to help long-suffering deposit savers slightly, they continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.