Q3 2022 Market Commentary

Below is a summary of what happened in Q3 2022:

• Higher inflation and resulting expectations of tighter monetary policy are weighing heavily on consumer and
  business sentiment, with growth forecasts continuing to see downward revisions.
• Recessions are now forecast in several key European economies and the US economy is also expected to slow
  substantially, increasing global recession risks.
• Increasing interest rate expectations saw sovereign bond prices fall, and yields rise sharply, as central banks
  re-iterated their commitment to bringing high inflation back to target. Meanwhile, corporate bond spreads widened,
  and equity markets sold off.
• UK government bond prices and sterling underperformed as markets questioned the credibility of the government’s
  unfunded fiscal package. Financial stability concerns led to temporary intervention by the Bank of England in longterm gilt markets.