Andrew Mann of JM Finn, discusses the current markets ahead of the festive period.

It would seem a reasonable bet that the inflation numbers delivered last week have cemented the view that there will be no further interest rate rises this year. 

In the UK, inflation now stands at 4.6%, in part thanks to the energy price rises seen in October last year not being repeated.

In the US, inflation has fallen to 3.2% and in the eurozone it is 2.9%. 

East Anglian Daily Times: Andrew Mann of JM FinnAndrew Mann of JM Finn (Image: JM Finn)

It still seems to me however that investors remain more focused on bad news than good, where an increasingly weak economic outlook improves the likelihood of rate reductions sooner than previously anticipated.

Markets have responded positively though, with the FTSE 250 Index so far reversing the sharp falls seen during October, bringing some relief in particular for investors in this smaller part of the market.

Talking of looking for bad news, sadly I wasn’t surprised to see that UK retail sales fell by more than expected in October with the rising cost of living, reduced high street footfall and wet weather all contributing. 

The consumer looks to be reining in spending, and this can only increase fears among retailers that falling confidence could hamper sales during the festive period. 

It’s not only about the UK consumer though: luxury fashion brand Burberry suffered more than a 10% fall in its share price as sales in both China and the US fell sharply. 

The company also blamed the cutting of VAT-free shopping for international tourists and warned that revenue targets could be missed if the slump in sales continues. 

It seems likely that there are a tough few months ahead for this area of the market.

Next stop of course is the Autumn Statement, which is due today. 

While much of the detail will no doubt have been leaked in the run up, let’s hope the Chancellor can deliver some early Christmas presents for both businesses and investors alike.