The decision of the Bank of England’s Monetary Policy Committee to raise interest rates to 1% from the 0.75% previously in place may be just the first move in a series of hikes aimed at moderating the rise in the cost of living. It is the fourth hike since December, but it still leaves the cost of money way below the inflation rate and looking low on a historical perspective. Our economic advisers reckon we’ll see 3% rates by the end of the year, but inflation is then likely to be running at three times that level.

Little else has emerged in the past couple of weeks to add much in the way of cheer for investors. Even the bumper profits announced by BP carried something of a sting in the tail, with speculation now rife that the Chancellor may not be able to resist imposing a windfall tax on the oil giants. The fact that BP has taken a huge hit on its investments in Russia seems immaterial in the political arena. Shell produced an even more spectacular set of results, which arguably doesn’t help much.

Shares on Wall Street had something of a tough April, with a sell-off on the last trading day of the month bringing the NASDAQ Index down by some 14% over the month. Technology shares were mainly responsible, with the tech-free Dow Jones Industrial Average just 5% lower, though the more broadly based S&P 500 Index also suffered a double-digit decline. Indeed, markets around the world have been all over the place so far this year.

Fortunately, our own benchmark FTSE 100 Share Index has got away comparatively lightly by comparison, ending the month only a little down from the beginning of April. There will be plenty to take into account as we enter that most dangerous month of May, though the old adage “Sell in May and go away” carries little weight these days. But in these volatile times, who can say what the future might have in store.

No doubt it will be the rise in the cost of living that will continue to dominate investor sentiment as we march towards the summer. Despite the war in Ukraine, inflation and continued problems in China all combining to constrain global economic growth, central banks seem set to raise interest rates further to try to contain price rises. This can only add to the pain being felt by consumers. We could be in for an interesting summer.

Brian Tora

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