UK inflation hit a 40-year high of 9% in April, placing further pressure on the government to act. About three-quarters of the increase was due to a significant jump in household gas and electricity bills. The Bank of England are increasingly anxious that future inflation expectations may become unanchored and UK retailers have warned that a surge in food prices will keep inflation rising in the months ahead.
The UK economy added more jobs than expected in April, reversing earlier signs that demand for labour may be losing steam. The number of employees on payrolls increased by 121,000 over the month.
Weekly job claims in the US are at 218,000 up from 197,000. Initial jobless claims for the week ending May 14th increased by 21,000 from the previous week and for the first time since 2001, there are fewer people unemployed than vacancies. The newest release from the UK Office for National statistics shows that the current rate of unemployment is at 3.7%.
After the equity market sell off in April and May, investors naturally expect a bounce, as markets rarely move in one direction without counter trend corrections. However despite the oversold position, equity indices have struggled to stage any meaningful recovery and this weeks early strength faded rather quickly on Wednesday as the Federal Reserve pleaded with society not to question its inflation fighting credentials.
Patience is needed as the economic path will take time to unfold, and investor expectations continue to adjust to the severe pressure on consumer spending which is now showing up in earnings updates from retailers. Despite the downbeat outlook, investors should remember that financial markets have already fallen almost 20% measured in US dollars, and whilst a degree of caution is warranted, lower prices do mean lower future risk.
Quote of the week
“The atmosphere was electric. The bidding on the phones went backwards and forwards. It was crazy.”
Onlooker at Dreweatts Auction House
A vase that was kept in a British Kitchen has sold for a staggering 1.5 million at auction – as although the owner had no idea of its worth, it turned out to be a 250-year old relic made for the emperor of China.
The 18th Century vase was bought by an English surgeon in the 1980s for a few hundred pounds and was passed down to his son who had no idea it had such value and history.
It was only when a visiting antique specialist spotted it in their kitchen, that he realised what was sitting in his home, and estimates put its value at around £150,000.
But when it went under the hammer a bidding war began and the vase finally went for £1,449,000 including a buyers’ premium – setting a record at auction house Dreaweatts.
The exceptional quality, monumental size and imposing presence of this vase, as well as its fine and auspicious decoration, would have rendered it suitable for prominent display in one of the halls of the Qing palace.
Source: The Mirror
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