Global stock markets falling as UK inflation hits 40-year high

Global stock markets falling as UK inflation hits 9% a 40-year high

 

Global share prices experienced sharp falls in UK, US and Asia as rising prices and slowing economies spook investors. 

 

On Wednesday, US shares recorded the biggest one-day drop in two years since the start of the pandemic.

 

The NASDAQ plummeted 4.7% and has opened down again continuing a longer-term decline – down 18% YTD and the DOW JONES declined 14% since the start of 2022.

 

It’s not only tec stocks being sold off. Blue chips, like Unilever and Tesco’s, have also dropped by 4.4% and 5% respectively. The biggest Faller on the UK market was Royal mail plummeted 12%. The UK FTSE 100 index fell 150 points today. 

 

Inflation

 

Inflation is eating away at your savings as well as costing you more to live. The buying power of your money in the bank is falling by around 10% every year, which means that £1000 will be worth just £900 next year.

 

In other words, in 12 months’ time your £1000 will buy you the equivalent of £900 of the same goods. In the meantime, the price of those goods are going up by 10%. 

 

If inflation figures were calculated in the same way as they were previously headline rate would be double today’s official rate.

 

Main points:

 

·        Retail prices index rising by 13% pa and includes the price of all goods excluding property costs – which have gone up massively.

 

·        Manufacturers price rises rising by over 15% pa.

 

·        Commodities, such as oil, wheat, fertiliser and animal feed have gone up by 50% to 100% in some cases.

 

·        The war is not causing inflation, sanctions are.

 

·        UK economy fell in April by 0.1%.

 

·        US economy declines for first time since 2020.

 

What can you do to protect yourself and your family?

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Invest in real assets which appreciate in value over time, such as property and shares in profitable businesses.

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