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In our Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.
New data from the Office for National Statistics reveals that almost 90% of British households saw their cost of living rise last month as growing fuel, food and borrowing costs continue to compound.
The ONS also said a quarter of those surveyed said they were struggling to meet those costs. The figures represent November to March and do not include April’s rise in energy prices or national insurance contributions.
The figures come amid a backdrop of extenuating factors, including the coronavirus pandemic, the Russian invasion of Ukraine and a 30-year high in inflation, that have all seen prices hike in recent weeks and months.
Elsewhere in the UK, the impact of inflation and the war in Ukraine continued to be felt. Business activity grew at the slowest rate in three months in April, as orders in the services sector slumped. Retail sales fell by a worse-than-expected 1.4% in March from the month previous, also according to the ONS. Market research firm GfK said consumer confidence slumped in April, approaching its lowest level since the data series began 50 years ago.
Stock markets in China and Europe have fallen as fears that continuing Covid restrictions in China could hit supply chains and the wider global economy.
Authorities in Beijing have enforced mass testing in one area of the city following a small outbreak of cases. However, there are also concerns the capital could follow Shanghai by enforcing a lockdown to contain the spread.
London's leading FTSE 100 share index tumbled, led by commodities firms such as oil producers and miners. The FTSE dropped by 2.2% and stock markets in Germany and France also fell following a decline of more than 5% on China's Shanghai Composite Index earlier. Hong Kong's Hang Seng closed 3.7% lower while Japan's Nikkei index fell by nearly 2%.
However, China’s economy grew at a stronger-than-expected 4.8% pace in the year’s first quarter from a year ago, up from 4.0% in last year’s fourth quarter. On a quarter-on-quarter basis, the economy expanded 1.3% in the first three months of the year, slowing from the previous quarter’s 1.6% increase.
In the US, initial data for the S&P Global US Composite PMI Output Index, which tracks the manufacturing and services sectors, suggested that growth in business activity slowed in April but remained strong. The widely watched economic indicator came in at 55.1 compared with 57.7 in March.
