Whilst the FTSE 100 gains ground in early trade, cost of living soars.
Hargreaves Lansdown senior investment and markets analyst Susannah Streeter writes that the FTSE 100 was gaining ground in early trade at the start of this week. A late surge on markets in Asia saw the Nikkei in the Japan and Shanghai composite head higher and the Hang Seng in Hong Kong moved towards positive territory. Markets in Europe opened higher.
Energy giants were among the big rises with oil remaining elevated around $112 a barrel for Brent crude. Supply concerns persist for them.
In the UK, the cost-of-living crisis continues to lead to protests, with disruptions now affecting road networks. Due to motorists demanding help with high prices, ‘go-slow’ protests will affect motorways. This upheaval follows last month’s rail network strikes and mass cancellations at airports.
However, the UK’s higher prices pale in comparison to other nations’ situations. Streeter writes: “Turkey’s inflation rate has hit 73.5% year on year, its highest in 23 years, as the country struggles to deal with soaring food and energy prices. Sri Lanka has ground to a halt, unable to pay for fuel imports as it grapples with hyperinflation and an economic crisis. As investors fret about a hard landing in the US, some nations have already hit the concrete, and with little respite in sight for high energy prices, there will be no easy exit strategy.”
There are also still central worries about the impact of a prolonged US recession. Inflation remains high and there is concern that the US Federal Reserve will have to focus highly on increasing interest rates to bring the spiralling prices under control.
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Streeter writes: “Friday’s key jobs report is being keenly anticipated to show just how resilient the labour market is, in the face of deteriorating economic conditions.”