The outlook for markets as central banks change direction

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

In this edition:

• The global economy has seen a significant recovery in 2021 and inflation is rising. Central banks are under pressure to act. Interest rates are already rising in many places around the globe.
• All eyes are now on the Federal Reserve and the ECB. The Federal Reserve has already started tapering its asset purchases and is expected to raise rates in the second half of 2022.
• The Bank of England has resisted rate rises so far, but a small rise in the cost of borrowing seems likely at the December meeting of the MPC.
• A rising rate environment can prompt stock market volatility. However, as long as rises are small and flagged well in advance, markets can continue to make progress.

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