Openwork Market Update 02/08/2019



In July, Boris Johnson became the leader of the Conservative party and moved into “No. 10” as our latest Prime Minister.  His priority being for the UK to leave the European Union on 31 October 2019, with a “no deal” exit firmly back on the table.

This caused the pound to fall to a 2-year low against the US dollar.  While this is bad news for those of us enjoying an overseas summer break, it was positive for the FTSE 100, which closed July at 7,586.78, which was 2.2% higher than the June closing level.

In the US, the Dow Jones 30 enjoyed a smaller gain of 1.0%, ending July at 26,864.27.

As stated above, £ Sterling suffered in July against the US Dollar.  It ended the month at 1.22 US Dollars, which was 4.3% lower than the closing figure at the end of June.

Against the Euro, £ Sterling ended July at 1.10 Euros, which was 1.8% lower than the June closing figure.

Inflation, as measured by the Consumer Prices Index including owner occupiers’ housing costs (CPIH), was 1.9% in June 2019 (this is June’s data which is reported in July).  This was unchanged from the previous month.  The 12-month rate for the Consumer Prices Index (CPI) rate which excludes owner occupied housing costs and council tax was 2.0% in June 2019, similarly unchanged.

The Bank of England maintained interest rates at 0.75% in July.  The last change was an increase in August last year.  This means long-suffering deposit savers are likely to continue to lose money in real terms when you consider the rate of savings interest compared to the rate of inflation.

With external influences remaining uncertain, it is likely to remain a volatile period for investors.

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