Quarterly Market Round-up

Flash Stats - Q4 2023

11 Jan 2024

In our regular market round-up, we take a look at what's happened in Q4 2023.

Sovereign bond yields fell sharply as lower-than-expected inflation releases boosted investor optimism for earlier and larger rate cuts in 2024. In response, global equity markets rose and credit spreads tightened. 

Some of the headlines in the final quarter of 2023 include:

  • December’s final release confirmed that the US economy expanded by 1.2% quarter on quarter in Q3, driven by robust consumer spending. By contrast, UK and eurozone GDP contracted by 0.1% in Q3. This leaves the UK flirting with a mild technical recession in the second half of 2023 as recent monthly data showed the economy contracted 0.3% in October, following a 0.2% expansion in September.
  • US GDP forecasts for 2023 and 2024 were revised higher once more in Q4, given the unexpected strong growth. Despite this, global growth in 2024 is expected to ease to its slowest pace since the global financial crisis (excluding 2020) but it is not expected to collapse.
  • Year-on-year CPI inflation in the UK, US, and eurozone fell more than expected to 3.9%, 3.1%, and 2.4% respectively, in November. The main drivers were a decline in energy prices and a moderation in food prices. However, core inflation, which excludes both, also fell more than expected. Perhaps highlighting a degree of ‘stickiness’ in inflation, the respective core measures are 5.1%, 4.0%, and 3.6% in the UK, US, and eurozone.

If you have any questions on anything covered, please get in touch. 

Flash Stats - Q4 2023


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