Market hopes were dashed from mid-August onwards after the release of UK inflation data (above 10%) acting as a reminder that there are two sides to the tug-of-war between inflation and recession. Indeed, the narrative of inflation rolling over and hence of central bankers eventually shifting on the dovish side was further questioned with the strong US employment data and both macro (retail sales) and micro (US large retailers’ publications) statistics pointing to a resilient consumer.
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