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• Despite widespread concerns about the UK's economic outlook, the country narrowly avoided recession with a 0.2% GDP growth between April and June. A significant upturn of 0.5% in June contributed to this growth. 
• The UK labour market exhibited a mixed picture, with unemployment rising from 3.9% to 4.2% in the three months to June. In contrast, annual wage growth (excluding bonuses) surged to a record high of 7.8% during the same period.

Ukraine: Navigating Challenges and International Support 

• Ukraine continued to garner international support, with the US approving the transfer of F-16 fighter jets and the UK offering a crucial £192 million loan guarantee to sustain the nation's nuclear power plants through the winter.
• The ongoing war in Ukraine took an unexpected turn with the death of Yevgeny Prigozhin, head of the mercenary group Wagner, raising questions about Russia's stability.
• ​Arkady Volozh, co-founder of tech giant Yandex, spoke out against the war, denouncing it as "barbaric."

Europe: Economic Headwinds and Regulatory Developments 

• Businesses in the eurozone faced challenges as output and new orders sharply declined in August, signalling potential economic slowdown.
• Germany's economy struggled, experiencing zero growth in Q2 2023 following two consecutive quarters of contraction. Wholesale prices fell by 2.8% in July year-on-year.
• Italy modified its initial plans for a 40% one-off tax on bank profits, providing some relief to financial institutions. 

​The European Union introduced the EU Digital Services Act, ushering in new rules to regulate tech companies and protect users from harmful online content.

United States (US): Credit Rating and Inflation Concerns

• Fitch downgraded the US government's credit rating from AAA to AA+ due to perceived governance deterioration over the past two decades. 
• Inflation increased from 3% in the year to June to 3.2% in the year to July, primarily driven by rising food, car insurance, and housing costs. 
• The US Federal Reserve implemented interest rate hikes to combat inflation, with economists anticipating a near-term pause in rate increases.
• Positive employment figures and a declining unemployment rate boosted optimism about the US economy. 

Far East: Economic Challenges and Resilience

• China grappled with deflation as July's inflation decreased by 0.3% compared to the previous year, prompting concerns about stimulating demand. 
• Japan's economy defied expectations, registering a remarkable 6% GDP growth in Q2 2023, the most substantial quarterly increase in nearly three years. 
• Japanese businesses expressed growing confidence in future economic growth, reinforcing positive sentiments. 
• Hong Kong's Hang Seng index faced an 8.14% decline, reflecting regional economic challenges. 

Emerging Markets: Expanding Horizons and Economic Reforms

• The BRICS group welcomed new members, Argentina, Ethiopia, Iran, Saudi Arabia, Egypt, and the United Arab Emirates, starting from 2024. 
• India celebrated a significant achievement as its Vikram lander executed a soft landing on the moon, showcasing technological prowess. 
• India continued trade negotiations with the UK, gearing up for UK Prime Minister Rishi Sunak's visit. 
• Russia's rouble faced a steep decline, while Brazil's central bank implemented a half-point reduction in interest rates, lauded for prudent economic management. 

We hope we have kept you well-informed about global economic trends, their ripple effects on financial markets, and their implications for investments and businesses. As the world economy navigates uncertainties. 

​If any of the above affects you and you’d like to discuss our opinion on current Markets in further detail, please contact your usual Omnium adviser.