9 June 2026
Last week, Bank of England (“BoE”) Governor Andrew Bailey warned that the central bank must restore public confidence in its official 2% inflation target. This assertion follows new internal research detailing the high costs of bond liquidations. While the Iran conflict threatens widespread price increases, the Monetary Policy Committee (“MPC”) expects subsequent interest rate increases to follow. Workplace disruption has fuelled worries about rapid technological shifts, which currently overwhelm roughly 61% of the domestic workforce. Consequently, officials are likely to maintain a cautious wait-and-see stance as wage growth steadies, preferring to monitor long-term stability rather than reacting solely to temporary corporate inflation spikes.
Elsewhere, UK government bonds came under pressure as balance sheet policies created curve instability. Long-term 30-year gilt yields reached a developed market high of 5.5% on Tuesday as foreign buyers targeted lucrative domestic returns. Markets now anticipate stronger foreign capital inflows into fixed-income products during the year. In equities, the FTSE 100 index finished the week relatively flat. This trend masked a significant underlying trend: domestic allocators accelerated their shift of pulling cash from equities into diversified mixed asset investment fund structures. This preference came at the expense of broader equity funds, which suffered total redemptions of £257 million even though domestic market stock portfolios broke a long dry spell by securing rare inflows for the first time since late 2024 from retail savers.
Across the Atlantic, macroeconomic data heavily impacted market sentiment as May non-farm payrolls rose by 172,000 in May, ahead of the expected consensus forecast. In equities, the S&P 500 index broke its nine-week winning streak with a 2.6% drop, while the Nasdaq Composite index dropped by 4.3%, halting consecutive weekly advances. Technology stocks dragged the market down, driven by a sharp rotation out of artificial intelligence (“AI”) and semiconductor companies following disappointing forward guidance. US Treasury prices weakened with notable curve flattening following hawkish Federal Reserve (“Fed”) takeaways that prompted markets to brace for potential rate hikes.
Meanwhile, the US Dollar Index (“DXY”) strengthened by 1.2% as gold prices fell 5.0%. Geopolitical developments remained central to sentiment as diplomatic negotiations over the Iran conflict stalled, despite lingering hopes for a proposed memorandum of understanding. Despite ongoing escalations and continuous strikes, the uncertain path towards a resolution, or at least a temporary ceasefire, significantly disrupted energy markets. This volatility pushed West Texas Intermediate (“WTI”) crude oil up noticeably, settling 3.6% higher for the week, as traders priced in a lack of immediate de-escalation or an increase in regional risk premiums.
Despite economic volatility, UK house prices recorded little change in May, with Halifax reporting a marginal 0.1% monthly dip and 0.5% annual growth as Middle East tensions dented momentum. However, higher inflation expectations, keeping borrowing costs elevated, are increasing the pressure. This is reflected in the construction sector, where declining residential work dragged the construction Purchasing Managers' Index (“PMI”) to 38.2 due to escalating costs.
JBunzl, which operates as a specialist international distribution and services group, saw its shares rise 7.58% last week. This positive movement in the share price was not driven by fresh corporate news, but rather by broader market momentum and a noticeable rotation by investors into defensive growth equities. This favourable market sentiment, paired with steady confidence in Bunzl's robust international outsourcing pipeline and distribution logistics assets, successfully lifted the stock's valuation. Ultimately, the upward trend reflects sustained investor trust in the company's market-leading stability despite a quiet week on the corporate news front.
InterContinental Hotels Group (“IHG”), which operates a global network of franchise hotels specialising in hospitality and leisure accommodation, performed well, rising 6.05% last week. This upward movement in the share price was not driven by fresh corporate announcements, but rather by broader market momentum and a general lift across global leisure and tourism equities. Investors maintained strong confidence in the ongoing resilience of international travel and business bookings, with additional positive sentiment supported by the company's routine share buyback operations executed throughout the week. Ultimately, these steady gains reflect sustained investor trust in IHG's diversified global footprint during an otherwise quiet week for corporate news.
Prudential, which provides life and health insurance across Asia and Africa, saw its shares tumble 10.49% last week. This sharp downward movement was triggered by significant macroeconomic news, as reports surfaced that Beijing is cracking down on capital outflows, heavily dragging down major UK-listed financial stocks with significant Asian exposure. This regulatory anxiety sparked a broader risk-off sentiment across global portfolios, completely overshadowing investor optimism regarding Prudential's strategic expansion and upcoming initial public offering (“IPO”) plans in India. Ultimately, the steep drop reflects heightened market volatility and a swift retreat by investors from emerging market insurance sectors in favour of defensive assets.
Market Commentary prepared by Walker Crips Investment Management Limited.
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No news or research content is a recommendation to deal. It is important to remember that the value of investments and the income from them can go down as well as up, so you could get back less than you invest. If you have any doubts about the suitability of any investment for your circumstances, you should contact your financial advisor.
The value of investments can fall as well as rise. Investors may get back less than invested. Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise. Investors may get back less than invested.
