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Prosperity Investment Management provides you with a weekly update from markets across the globe, including major markets such as the United Kingdom, United States of America and China.
Beginning in the UK, gross domestic product grew a stronger-than-expected 2.1% in March, led by the reopening of schools, vaccine rollouts, and pickups in the retail and construction sectors. The expansion helped reduce the rate at which the economy contracted in the first quarter to 1.5%. Bank of England Governor Andrew Bailey said the central bank is watching the inflation situation carefully but does not think that the factors driving up consumer prices will last.
Moving to the US, the week brought more surprises on the heels of the previous Friday’s weaker-than-expected jobs report for April. On Wednesday, the S&P 500 Index had its worst day since February 25—and the Dow Jones Industrial Average had its worst since October 28—after the Labor Department reported that core consumer prices jumped by 0.9% in April, the most in nearly four decades and roughly triple consensus estimates.
Finally, in China, vehicle sales increased for the 13th straight month in April, rising 8.6% over a year ago. China’s producer price index jumped 6.8% in April - the largest gain since 2017 - as raw materials prices surged. However, the CPI rose a less-than-expected 0.9%, restrained by lower food prices. Despite the muted CPI reading, analysts see core consumer inflation on the rise as prices in the services sector start to normalise after the coronavirus pandemic.
