Walker Crips' Market Commentary

Navigating the upcoming budget: Key takeaways for investors

Join Walker Crips Investment's Senior Investment Analyst Alan Philip and Investment Director James Richards as they break down potential policy shifts and what the latest budget announcements could mean for your investments.

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Important information

This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or so...

The UK economy grew 0.1% in August from July, against expectations of a 0.1% decline, with production up 0.8%, services flat and construction down 0.2%, leaving the month's Gross Domestic Product ("GDP") growth resting on one sector. The trade deficit narrowed to £920 million from £2.32 billion in July. Consumer evidence was softer, with the British Retail Consortium reporting retail sales up 1.3% in September on an annual basis, slowing from 2.3% a year earlier as households braced for higher bills and taxes. Ahead of the budget on 28th October, the Institute for Fiscal Studies said higher inflation would erode departmental spending power. The 10-year gilt yield fe...

The UK composite purchasing managers' index ("PMI"), a survey which tracks the health of the UK private-sector economy, eased to 52 in September from 52.5 in August, leaving activity growing but more slowly, and the British Retail Consortium put total footfall down 2.9% in the year to September from 1.7% in August. Gilts moved against that softness, the yield rising 7 basis points to 5.44%, as the market priced the Middle East energy shock's inflationary effect and the fiscal risk ahead of Chancellor John Healey's 28 October budget. The Institute for Fiscal Studies argued that inflation, rather than the chancellor's headroom, is the central problem, since...

The UK economy grew faster than first thought in the second quarter of 2026, with UK gross domestic product ("GDP") revised up to 0.5% from 0.4% by the Office for National Statistics (“ONS”), with the services sector doing most of the work. The manufacturing Purchasing Managers' Index ("PMI"), a survey of how manufacturers themselves see conditions, edged up to 51.9 in September from 51.7, holding above the 50 mark that separates growth from contraction. Households looked less comfortable with Nationwide reporting annual house price growth halved to 0.8% in September from 1.6%, the weakest since December 2025. The 10-year gilt yield was little changed at 5.37%, keeping borrowing costs in f...

UK economic activity data has softened as the Budget on 28 October draws closer. The flash composite Purchasing Managers' Index ("PMI") fell to 51.7 in September from 52.5 on weaker services growth, though manufacturing was more resilient at 52 and input cost inflation accelerated on higher fuel costs. The Confederation of British Industry (“CBI”) retail sales balance fell to minus 55 from minus 48, orders placed with suppliers declining at the fastest rate since the survey began in 1983. Public sector net borrowing was above expectations at £18.27 billion in August, from £15.35 billion a year earlier, and the 10-year gilt yield rose eight basis points to 5.37%...

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The Bank of England held the base interest rate at 3.75% last Thursday by a six to three vote, the dissenters favouring an immediate increase, and warned that rates may need to rise if the energy shock feeds into more persistent inflation. It also slowed balance sheet reduction, giving gilt markets relief and leaving the 10-year yield five basis points lower at 5.29%. The decision followed consumer price index ("CPI") inflation of 3.1% for the year to August, up from 2.9% on higher motor fuel costs, though Core CPI (which excludes energy, food, alcohol and tobacco) held at 2.6% and CPI services at 3.4%. Unemployment...

Last week, UK investors closely monitored macroeconomic signals while looking ahead to the Bank of England's (“BoE”) forthcoming monetary policy meeting, where expectations remain firm that the base rate will be held at 3.75%. The pressure on central bank decision makers remains intense as the domestic inflation picture continues to present a challenge. Headline Consumer Price Index (“CPI”) inflation reached 2.9% in July, and market participants are awaiting Wednesday's August figures to gauge whether price pressures are broadening. However, domestic economic fundamentals provided a welcome boost at the end of the week, with UK gross domestic product (“GDP”) data outperforming forecasts and indicati...

Surging higher borrowing costs are expected to create further headwinds for the UK economy ahead of the 28 October 2026 budget, threatening to shrink the Treasury headroom by up to £12 billion, due to the 10-year government debt yields surging past 5.2%, as increasing energy prices reignited inflation concerns, prompting calls for the Bank of England (“BoE”) to pause active bond sales. In the consumer sector, demand figures appear mixed across hospitality and travel. Jet2 reported an 8.8% increase in booked passengers over the summer, reflecting resilient holiday spending, perhaps as a result of the recent heatwaves. Whilst Ryanair reduced its annual passenger target for 2...

Last week in the UK, economic data showed that optimism amongst British businesses grew in August as Lloyds Bank’s confidence index rose to 53%, the highest since the start of the Iran conflict. Business inflation expectations fell to a five-year low, whilst the latest Citi/YouGov survey showed an increase in the general public’s expectation of higher inflation, meaning that perhaps households are bracing themselves for higher prices. These contrasting data indicators can leave the Bank of England (“BoE”) in a difficult spot as rising inflation expectations are directly shifting rate forecasts, forcing money markets to push back expectat...

Last week, Bank of England policymakers faced expectations of rates holding at 3.75%, with nearly 90% of economists predicting “no change” despite market pricing for increases. Headline Consumer Price Index inflation accelerated to 2.9% in July from 2.6%, while core inflation held at 2.6%. Although food inflation eased to 2.1%, energy price caps are predicted to rise 4% in October, which could cause further pain for the average Brit navigating the cost of living. Elsewhere, UK economic activity surprised on the upside as the composite Purchasing Managers' Index ("PMI") reached a four-month high of 52.5, propelled by Services PMI rising to 52.8...

Stocks featured:

En...

Last week, Bank of England policymakers faced renewed monetary tightening expectations, especially as Chief Economist and Monetary Policy Committee member Huw Pill voted for rate hikes in four consecutive decisions, arguing that resilient quarterly growth of 0.4% in June supports higher interest rates. While Bank of England Governor Andrew Bailey had previously downplayed the possibility of rate cuts, comfortable leaving rates on hold, money markets now fully price further increases and anticipate upcoming hikes if oil prices continue to rise. UK Gross Domestic Product surprised on the upside in June by expanding 0.3% against expectations for a 0.1% contraction. This performance was...

Last week, Purchasing Manager’s Index (“PMI”) mixed signals pointed to a modest UK economic recovery. Whilst UK business activity saw a first rise in three months, driving the broader economy up, manufacturing and construction remain laggards, meaning that sustainable growth will depend on whether supply chain and inflation pressures continue to moderate. However, the geopolitical reasons are threatening this, as EY points out that the prolonged closure of the Strait of Hormuz could cause inflation to double, risking a UK recession. The recent heatwaves are also a threat, hampering retail footfall in July and potentially disrupting supply chains and ca...

All eyes were on the Bank of England (“BoE”) on Thursday for its latest interest rate decision. The Monetary Policy Committee decided to hold the rate at 3.75%. This dovish stance comes after a split six versus three vote, where investors placed greater weight on the cautious remarks from Governor Andrew Bailey. The BoE remains alert over supply shocks such as oil volatility, food inflation, the easing of price pressures, which fell 0.9%, and a drop in public inflation expectations. Consumers are now drawing down Covid pandemic-era savings to help absorb the current living costs, which in turn is supporting modest reta...

Last week, Bank of England policymakers faced renewed monetary tightening expectations, especially as money markets now fully price further increases and anticipate upcoming hikes if oil prices continue to rise. Elsewhere, the UK Purchasing Managers' Index reached a three-month high of 52.1, driven by a notable recovery in the services sector, and UK retail sales surprised on the upside in June, rising by 1% month-on-month against a consensus forecast of a 0.3% decline....

Stocks featured:

Anglo American, Segro and Centrica

To find out more about the investment management services offered by Walker Crips, please...

In the first of our new video podcast series, James Richards and Ben Potter discuss artificial intelligence ("AI") valuations, inflation, gold, gilts and where they see markets going for the remainder of 2026. Listen to the first episode of new Walker Crips podcast.

Watch the video podcast on our Youtube channel here:

https://youtu.be/TjU8ZxXJlIc

To find out more about the investment management services offered by Walker Crips, please visit our website:

https://www.walkercrips.co.uk/

This podcast is intended to be Walker Crips...

Last week, Bank of England (“BoE”) Governor Andrew Bailey highlighted clear financial stability risks, noting the central bank must monitor price inflation hitting 3.2%. Consequently, policymakers are facing renewed monetary tightening expectations, especially as money markets now fully price further increases and anticipate upcoming hikes if oil volatility persists. Elsewhere, the British economy grew marginally in May by 0.1%, meeting economists' expectations despite high domestic energy costs persistently constraining broader private sector output. Major investors expect the BoE to slow or halt sales of long-term government debt this autumn as quantitative tightening inflates borrowing costs...

Stocks featured:

Me...

Last week, Bank of England Chief Economist, Huw Pill, downplayed any near-term rate cuts, noting the central bank must keep inflation under control. Consequently, policymakers are maintaining a cautious stance, especially as Monetary Policy Committee official Megan Greene signalled a readiness to hike rates if domestic overheating persists. Elsewhere, the International Monetary Fund upgraded the UK’s 2026 growth forecast to 1%, positioning it as the third fastest-growing economy in the G7. However, this contrasted with comments from ratings agency, Fitch, that high debt and inflation-linked servicing costs constrain creditworthiness, while elevated yields reflect monetary expectations and a weaker growth outlook...

Last week, Bank of England Governor Andrew Bailey downplayed the possibility of rate cuts this year, noting the central bank is comfortable leaving interest rates on hold. While inflation is expected to return to its 2% target later than preferred, markets have already tightened the bond yield curve. Soaring energy costs remain a concern, with upcoming price cap increases threatening to push millions of households into fuel poverty. Consequently, officials are maintaining a cautious stance, especially as Bank of England Monetary Policy Committee member policymaker Catherine Mann signalled a readiness to hike rates if price pressures persist. Meanwhile, domestic food...

Last week was marked by the Prime Minister Sir Keir Starmer’s resignation on Monday, despite the exit being expected, anxieties still developed and the British economy continued to stall under cost pressures. The initial hit to corporate confidence was laid bare by a sharp contraction in the flash June Purchasing Managers' Index, as it slumped to a 14-month low. Manufacturing orders hit a six-year low, signalling an immediate freeze in business investment during the leadership transition, whilst Monday morning’s weak Confederation of British Industry Growth Indicator further validated this downwards trajectory. Even though some research data offered a si...

Last week, Bank of England Governor Andrew Bailey defended the recent gilt sales programme, arguing that it remains broadly neutral for everyday taxpayers. While the Iran war threatens widespread price increases, the Monetary Policy Committee chose to hold interest rates. Soaring energy costs have fuelled worries about rapid deindustrialisation risks, which currently offshore roughly 25% of domestic manufacturing. Consequently, officials are likely to maintain a cautious holding stance as economic momentum steadies, preferring to monitor inflation, which is nearing 2.8%, rather than reacting solely to temporary energy spikes. Meanwhile, domestic retail sales broke a negative spell, securing growth for the first...

Last week, Bank of England Governor Andrew Bailey warned that Artificial Intelligence (“AI”) may need to be rationed due to energy capacity constraints limiting deployment. While the Iran conflict threatens widespread price increases, the Monetary Policy Committee expects no further interest rate increases. Workplace disruption has fuelled worries about rapid technological shifts, which currently engage roughly 84% of the domestic boardrooms. Consequently, officials are likely to maintain a cautious holding stance as median pay steadies, preferring to monitor inflation, which is nearing 4%, rather than reacting solely to temporary energy spikes. Meanwhile, domestic retail sales broke a negative spell, securing growth for...

Last week, Bank of England (“BoE”) Governor Andrew Bailey warned that the central bank must restore public confidence in its official 2% inflation target. This assertion follows new internal research detailing the high costs of bond liquidations. While the Iran conflict threatens widespread price increases, the Monetary Policy Committee (“MPC”) expects subsequent interest rate increases to follow. Workplace disruption has fuelled worries about rapid technological shifts, which currently overwhelm roughly 61% of the domestic workforce. Consequently, officials are likely to maintain a cautious wait-and-see stance as wage growth steadies, preferring to monitor long-term stability rather than reacting solely to temporary corporate inflatio...

Last week, Britain’s economic landscape continued to struggle due to the energy shock driven by the conflict in Iran, leading to Ofgem (“the Office of Gas and Electricity Markets”) announcing a 13% rise in energy bills. This and other inflationary measures mean the headline inflation will likely remain above the BoE’s (“Bank of England”) target for a fifth consecutive year. BoE Governor Andrew Bailey indicated that while rate cuts are off the table, recent bond market tightening has bought the central bank time to monitor the conflict's volatility. Investors have subsequently scaled back their interest rate expectations, pricing in just a sm...

Last week, Bank of England (BoE) Monetary Policy Committee (MPC) member Megan Greene warned that central banks could not dismiss ongoing supply shocks from the Iran war as temporary. This concern follows a major hit to private sector activity. While the Middle East conflict continues to drive energy prices higher, the domestic economy faces a rapid slowdown. Geopolitical uncertainty has fuelled worries about rising wholesale costs and energy bills, which heavily depress UK consumer sentiment, driving it to near-historic lows. Consequently, policymakers are likely to maintain an extended interest rate hold as economic growth fades and inflationary pressures remain...

Last week official figures showed slight economic growth in the first quarter, but more recent data reveals a sharp drop in consumer spending. Hit by the Middle East energy shock, April retail sales fell sharply, and card spending recorded its first annual decline. Forecasters warned that the broader geopolitical fallout could cost the economy over 160,000 jobs. This accelerated this week, as data shows household sentiment plunged to its weakest level in nearly three years. Troubles in Westminster are impacting corporate planning with 39% of British firms delayed or cancelled investments due to policy uncertainty. This was backed by new surveys...

Last week, Bank of England (BoE) Governor Andrew Bailey warned that insurers and pension funds have become dangerously intertwined with the private credit market. This concern follows a major hit to the financial sector earlier this year. While the Middle East conflict continues to drive energy prices higher, the Monetary Policy Committee (MPC) expects an economic slowdown. Geopolitical uncertainty has fuelled worries about rising food prices and energy bills, which impact roughly 80% of people. Consequently, officials are likely to discount upcoming growth figures as seasonal strength fades, preferring to monitor long-term stability rather than reacting solely to temporary economic...

Last week, Bank of England (“BoE”) Governor Andrew Bailey reiterated that the central bank is in no rush to raise interest rates. The recent surge in energy prices has created a significant supply-side shock, which Bailey and members of the Monetary Policy Committee (“MPC”) believe is better addressed through monitoring inflation risks rather than implementing an immediate tightening response. Policymakers ultimately voted 8–1 to maintain the Bank Rate at 3.75%, despite growing divisions within the committee as some members pushed for further hikes following the rise in inflation surveys...

Stocks featured:

DCC, Metlen Energy & Metals and The Weir G...

Last week, the published economic data presented a misleading picture of domestic growth. The composite Purchasing Managers' Index ("PMI") unexpectedly jumped to a two-month high, driven by corporate panic as firms are stockpiling inventory due to supply chain fears, triggering the largest monthly surge in the Input Prices Index in nearly three decades. These costs are now trickling down to consumers, with consumer confidence plunging to a record low, as headline inflation accelerated to 3.3%, aided by a spike in motor fuels and food prices. The only silver lining for the Bank of England ("BoE") is a cooling labour market...

In the wake of the Middle East conflict, the UK economy is signalling heightened stagflation risks. This was backed by warnings from shipping experts, who noted that supply chain fractures guarantee at least six months of elevated food and fuel prices. The final composite Purchasing Managers' Index ("PMI") set to a six-month low of 50.3 as 40% of firms reported rising costs. Even with a fragile US-Iran ceasefire holding at the time of writing, the Bank of England ("BoE") faces a severe policy dilemma...

Stocks featured:

Intertek Group, Entain and Imperial Brands

To...

In the wake of the Middle East conflict, the UK economy is signalling heightened stagflation risks. This was backed by warnings from shipping experts, who noted that supply chain fractures guarantee at least six months of elevated food and fuel prices. The final composite Purchasing Managers' Index ("PMI") set to a six-month low of 50.3 as 40% of firms reported rising costs. Even with a fragile US-Iran ceasefire holding at the time of writing, the Bank of England ("BoE") faces a severe policy dilemma...

Stocks featured:

Antofagasta, Kingfisher and Entain

To find out...

UK markets faced a sharp deterioration in sentiment in the final week of the tax year, as escalating tensions around the Iran conflict weighed heavily on business confidence. The Institute of Directors (“IoD”) index fell to a record low, reinforced by survey evidence from the Institute of Chartered Accountants in England and Wales (“ICAEW”), highlighting a rapid deterioration in corporate outlook. Inflation risks intensified, driven by surging energy prices, with analysts expecting the energy price cap to rise by 18% in July. Food inflation is also projected to accelerate to 9% by year-end from 3.3%, adding further pressure on households. Markets responded by prici...

Last week, the UK economy experienced high macroeconomic volatility as stagflation fears intensified after the Iran conflict disrupted global supply chains. March’s Purchasing Managers' Index (PMI) fell to a six-month low, while consumer expectations also dropped as households faced increases in energy prices. Initial panic over Bank of England (BoE) rate hikes, driven by the energy crisis, faded as BoE officials dampened inflation fears. They argued that the domestic economy lacks the momentum to sustain a 2022-style price spiral where costs drove wages and prices higher. Downing Street remains in active crisis management; Prime Minister Starmer is set to...

Last week, Bank of England ("BoE") Governor Andrew Bailey warned markets against getting excited on rate rises after the Monetary Policy Committee ("MPC") voted unanimously for a steady hand, keeping rates at 3.75%. A conflict-driven energy price surge has caused markets to factor in an interest rate hike by September, with up to three rises anticipated this year due to inflation fears. The UK labour market is concerning: jobless claims rose by 24,700 in February, and wage growth hit a five-year low of 3.9%. Rising energy costs could trigger a new price shock; Cornwall Insight forecasts the price cap will rise by £332 a...

The UK economy was hit by a stagflationary shock this week as Brent crude breached $100 a barrel. Even before the Strait of Hormuz crisis, official data showed Gross Domestoc Product (“GDP”) flatlined in January, missing the 0.2% growth forecast, leaving the country vulnerable to the energy supply squeeze. The Office for Budget Responsibility (“OBR”) warned the conflict could drive inflation up to 5% by year-end, wiping out recent progress. Consequently, the Bank of England (“BoE”) is effectively cornered as Money markets are now expecting a 70% chance of a 0.25% hike to 4% by late 2026, abandoning near-term cut hopes. With manufacturing orders collapsing under soaring cost...

Last week, Bank of England (“BoE”) policymaker Alan Taylor noted that the economic impact of the escalating Middle East conflict is uncertain, and that the UK faces downside growth risks if energy costs persist. A conflict-driven energy price surge has led markets to reduce expectations for a March rate cut to below 50%, with traders entirely pricing out a second rate reduction for 2026 due to spiralling inflation fears. The UK labour market presents a worrying picture, with youth unemployment spiking to 16.1% and the Office for Budget Responsibility (“OBR”) forecasting overall unemployment to peak at a 12-year high of 1.93 million. Rising energy c...

Last week, Bank of England (“BoE”) Monetary Policy Committee (“MPC”) member Alan Taylor noted that inflation appears to be heading towards normalisation, paving the way for a potential dovish shift. Governor Bailey's belief that a fall in inflation is "baked in" has led markets to price in an 80% chance of a 25-basis-point interest rate cut on the 19th March. The UK labour market is weakening, with job advertisements at a five-year low and youth unemployment, although above the EU average, worsened by nearly a million young Britons not in education, employment or training. Businesses and consumers fear job losses, as shown...

Last week, Bank of England (“BoE”) Monetary Policy Committee (“MPC”) member Catherine Mann signalled she is edging closer to backing an interest rate cut, with markets now fully pricing in two reductions by year-end as inflation eases to 3%. The UK labour market is cooling, with unemployment at a cycle high of 5.2%. Small businesses anticipate job cuts due to April's increases in minimum wage and National Insurance. Political uncertainty persists amidst speculation that Manchester mayor Andy Burnham may challenge Prime Minister (“PM”) Keir Starmer. Despite this, institutional investors such as Schroders are increasing UK debt exposure, buying longer-dated gilts, believing monetary pol...

Last week, the Bank of England's (BoE) Deputy Governor, Sarah Breeden, signalled that interest rate cuts could arrive within the next couple of meetings as inflation eases, with markets currently pricing in two 25 basis point reductions this year. Elsewhere, Monetary Policy Committee (MPC) member, Catherine Mann, links US trade wars to UK inflation via higher Chinese export prices. The long-term labour market downturn is stabilising, with candidate availability up and the decline in permanent hiring slowing to an 18-month low. Political uncertainty, fuelled by speculation over Prime Minister Starmer’s leadership, has dampened sentiment, leading investors to cut UK as...

In the first week of February, the Bank of England held rates at 3.75% in a split 5-4 vote, with Governor, Andrew Bailey, stating a March cut was a “50-50 call”. Data shows actual business activity is healthy: the Services sector (54.0) and Manufacturing (51.8) are both well above the 50.0 neutral mark, indicating solid growth. The job market is also stabilising as hiring downturns ease. However, future confidence is low as surveys show CEOs prioritising "resilience over investment" due to political uncertainty, with 80% of firms pausing capital plans to weather the storm. The political instability is partly a consequence of the Peter Mand...

Last week, the Bank of England's (“BoE”) weekly short-term repo allotment hit a record high of over £100 billion, marking the shift to a repo-led system, while the BoE considers tokenised assets as eligible collateral. The UK labour market softening continued, with Adzuna reporting that December job vacancies fell 15% year-on-year to a 2020 low, as rising payroll costs slowed hiring. This supports the majority view of a March rate cut, despite BoE Governor Andrew Bailey stressing the need to boost market resilience. Globally, Prime Minister Keir Starmer and President Xi agreed on a "strategic partnership," resetting UK-China relations with progress on whisk...