The UK continues to labour over tackling elevated inflation

This monthly commentary gives a roundup of global markets and trends.

In this edition:

• In June, the UK Consumer Prices Index (CPI) inflation came in lower than the consensus expectations but remains higher than the Eurozone or US
• The UK’s poor inflation performance can largely be traced to energy prices and a labour supply shock following Brexit and the pandemic.
• While energy prices are falling, the UK’s workforce has recovered far more slowly than other major economies since the pandemic
• The imbalance between labour supply and demand is likely to lead to higher wages and more interest rate rises may be needed to reduce the risk of overheating
• Nevertheless, rising investor optimism in  global stocks markets as US interest rates are expected to peak could filter through to British stocks