March 2023 Market Update

Overview

In the UK, once again the Bank of England raised interest rates, this time by 0.25% to 4.25%. Expectations had been split with some even expecting no changes given the uncertainty in the European banking sector. Others, however, expected a larger increase, particularly as inflation unexpectedly rose to 10.4% in February, up from 10.1% the prior month. This was well above expectations of 9.9% and was largely driven by higher food & drink prices.

Strangely, core inflation (which excludes volatile items like food and energy) also unexpectedly rose to 6.2% in February.

Full update below…