Mid market update: Inflation and the global market

By Acumen Financial Partnership Ltd

22 Feb 2023

Markus Spiske Xrify4ck1w Unsplash Scaled

By Daniel Frampton FPFS.

As the worries about prolonged inflation start to subside – there appears to be light at the end of the tunnel for developed economies. There have been three months in a row of CPI prints that have come in at or below expectations.

The general consensus is that inflation has peaked and over the next 12 to 18 months it should taper down to the Bank of England’s target rate. This is also the view for the United States which is positive as their markets make up the majority of global stock market capitalisation. 

Over the last 15 months, global markets have had to become steadily immunised to the rapid rising of central bank interest rates. The Chairman of the Federal Reserve in the US has repeated his “higher for longer” view in every speech he has made since the middle of 2022.

Unlike the Bank of England – who’s only target is keeping inflation under control – the Federal Reserve also have the target of keeping employment levels stable. Central banks do not have mandated targets regarding the value of assets – it matters not, to them, whether the stock/housing/bond markets rise, fall or stay flat. 

At this point in time, employment levels in the USA are at near record levels and inversely, unemployment leaves are at near record lows. This is in part helped by the cost-of-living increases and many citizens being forced to take a second job to make ends meet.  

WHAT IS THE BANK OF ENGLAND BASE RATE?
CPI is still far higher than central bank targets and with employment being strong, there is currently no reason for the Federal Reserve, the Bank of England and the European Central Banks to consider decreasing base rates at this time. 

The most likely outcome for the short term is that Central Banks reach their terminal interest rate and hold them there until either unemployment rises above targets or inflation falls below targets. At this point in time, the Federal Reserve have set an interest rate of 4.75% and their defined terminal rate is 5% – so, we are almost there. 

The next point of interest for markets is the corporate earnings landscape. As Consumers tightening their belts and the cost of production and energy is substantially higher than a couple of years ago. 

The question analysts are wrestling with at the moment is the extent to which profits will be hit across economies. We are in the midst of an earnings season and so far, earnings have been robust – with many companies meeting expectations and some exceeding them. 

There are a number of recession warning signs flashing but GDP growth remains relatively robust. We will continue to monitor the ongoing economic climate and ensure that any important news is fed back to you via our various means of communication. 

Even if a recession does become the base case – the stock market is forward looking and therefore, valuations will have likely accounted for this well in advance. In past recessions, the stock market usually starts recovering well before the economy reaches its worst point.  

As ever, the most proven strategy during periods of volatility is to remain invested through the peaks and troughs. If you would like to speak to one of our advisers regarding this, or anything else – please feel free to contact them at your earliest convenience to start your financial planning

Latest news

1

McMurrays Haulage expands fleet after contract win Warehouse Supervisor at Pets Choice Brad Eddleston and McMurrays Sales Manager Rob Spencer. Photo credit: McMurrays Haulage Limited

McMurrays Haulage expands fleet after contract win

21 Oct 2025

2

Dragons' Den star to shine on Lancashire Business Day Derry Green

Dragons' Den star to shine on Lancashire Business Day

21 Oct 2025

3

Eden Project Garden at RHS Chelsea Flower Show 2026 marks 25th anniversary Eden Project garden

Eden Project Garden at RHS Chelsea Flower Show 2026 marks 25th anniversary

21 Oct 2025

4

Lancashire farm named 'Family Farming Business of the Year' British Farming Awards

Lancashire farm named 'Family Farming Business of the Year'

20 Oct 2025

5

Breck Homes appoints new managing director Phil Dolan, Breck

Breck Homes appoints new managing director

20 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

HR Essentials for pubs, bars and licensed venues
EventBrite NORi - 22nd Oct Webinar.png.png
LBV Hub Webinar
22 Oct 2025 - 22 Oct 2025

HR Essentials for pubs, bars and licensed venues

Online - Teams, Leyland, PR253XH

13:30 - 15:00

Chamber Business Lunch – October
LBV Hub Networking
24 Oct 2025 - 24 Sep 2025

Chamber Business Lunch – October

Lancaster Golf Club, Lancaster, LA2 0AJ

11:00 - 13:30

North West Business Expo 2025
https---cdn.evbuc.com-images-880456273-4862066883-1-original.20241022-105445.jpeg.jpg
LBV Hub Exhibitions
24 Oct 2025 - 24 Oct 2025

North West Business Expo 2025

Bolton Stadium Hotel, Bolton, BL6 6SF

09:00 - 15:00

Lancaster District Business Support Expo
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
29 Oct 2025 - 29 Oct 2025

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

10:00 - 15:00

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin