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Investment Market Update - 10 April 2022

Good morning and welcome to another day of market updates.

Markets are easing forward today and the Ft100 is back to 7585 levels.

Dow Jones slipped last night following further concerns around inflation around the world and potential rises in interest rates.

Prices are rising at their fastest rate for 30 years, driven by a sharp increase in petrol and diesel prices. The UK inflation rate rose to 7% in the year to March, the highest rate since 1992 and up from 6.2% in February. Prices are rising faster than wages and there is pressure on the government to do more to help those struggling. The cost of living is expected to rise even further after the energy price cap was increased, driving up gas and electricity bills for millions. Inflation is the rate at which prices rise. If a bottle of milk costs £1 and that rises by 5p, then milk inflation is 5%. Fuel had the biggest impact on the inflation rate with average petrol prices rising by 12.6p per litre between February and March, the largest monthly rise since records began in 1990, the Office for National Statistics (ONS) said. This compares with a rise of 3.5p per litre between the same months of 2021. Diesel prices also rose by 18.8p per litre this year, compared with a rise of 3.5p per litre a year ago. The ONS said its latest figures showed the number of unemployed people fell below pre-pandemic levels for the first time, while there was another strong rise in the number of pay-rolled employees in February. Grant Fitzner, chief economist at the ONS, added: "However, the number of people out of work and not looking for a job rose again, meaning total employment remained well below its pre-pandemic level. "We have seen yet another record number of job vacancies, and with the redundancy rate falling to a new record low, demand for workers remains strong." The ONS said early estimates for February 2022 indicated that median monthly pay was £2,041, an increase of 5.1% compared with the same period last year. Tesco profits more than trebled last year amid rising sales and a fall in Covid-related costs. The UK's largest supermarket chain reported pre-tax profits of £2.03bn, up from £636m the previous year. Group sales, excluding fuel, rose by 2.5% to £54.8bn, while in the UK retail sales rose by 2.3% year on year. However, Tesco warned of "significant uncertainties" and said performance would be affected by the the investment needed to keep prices down. Chief executive Ken Murphy said: "Clearly, the external environment has become more challenging in recent months. A major producer of Apple's iPhone has become the latest manufacturer to halt operations because of the lockdown in Shanghai. Technology company Pegatron says it has temporarily suspended production at two of its factories in China. The announcement came even as authorities eased some of Shanghai's coronavirus regulations on Tuesday. It means that some of the city's 25 million people are able to leave their homes for the first time in weeks. The city was locked down in late March after infections surged in the key manufacturing and financial hub. In a stock exchange filing Pegatron said it had halted operations at its factories in Shanghai and nearby Kunshan "in response to Covid-19 prevention requirements from local government". The company said it would work with authorities "to resume the operations as soon as possible". Major Apple MacBook manufacturer Quanta, and iPad maker Compal Electronics, have also paused activities in Chinese cities, according to Japanese newspaper Nikkei. Production at Oxford's Mini plant could be "severely disrupted" or stopped by strikes after an "inadequate" pay offer, a union has warned. Unite said almost 150 warehouse workers, based at the Cowley factory, would strike for eight days later this month and in May. It added staff were "absolutely critical" to the factory. Employer Rudolph and Hellman Automotive Limited said officials had been notified of the strike action. The staff are set to strike on 26 and 28 April and 4, 6, 10, 12, 17 and 19 May. Unite said it disputes Rudolph and Hellman's claim "that it is increasing wages by 10%". Instead, it said with a 4% rise imposed in 2021 without consultation, this year's pay officer was 6%, "below the real rate of inflation, which stands at 8.2% and rising". Have a great day!!!!!! Best Regards S Dhanda

Head of Wealth @ ALFRED DUNN

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