{"id":196582,"date":"2023-09-21T12:00:00","date_gmt":"2023-09-21T16:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=196582"},"modified":"2023-09-21T12:39:06","modified_gmt":"2023-09-21T16:39:06","slug":"price-and-prejudice","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/price-and-prejudice\/","title":{"rendered":"Price And Prejudice"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-s-going-on\">What&#8217;s going on?<\/h2>\n\n\n\n<p>The UK flouted economists\u2019 assumptions, with inflation flagging in&nbsp;<a href=\"https:\/\/www.cnbc.com\/2023\/09\/20\/uk-inflation-dips-to-6point7percent-below-expectations-as-food-prices-ease.html\">August<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean\">What does this mean?<\/h2>\n\n\n\n<p>Inflation-watching isn\u2019t an edge-of-your-seat pastime these days, and the world\u2019s all-too-predictable prices mean that economics enthusiasts only truly light up when a piece of out-of-the-blue data drops. That\u2019s why Wednesday\u2019s British consumer price index reading was such a blessing for macroeconomic anoraks: prices rose by 6.7% in August from the same time last year (or 6.2% stripping out volatile food and energy) \u2013 in short, by&nbsp;<em>much<\/em>&nbsp;less than expected. And sure, that figure\u2019s still higher than it would be in an ideal world, but it\u2019s a massive step in the right direction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-should-i-care\">Why should I care?<\/h2>\n\n\n\n<p><strong><em>Zooming out:&nbsp;<\/em><\/strong><em>Cool Britannia.<\/em><\/p>\n\n\n\n<p>Up until now, pundits and economic forecasters have taken Old Blighty as a kind of punching bag \u2013 bemoaning Britain\u2019s unproductive workforce, political disarray, and Brexit woes. But economic narratives can turn on a dime, so you can expect some chirpier outlooks after this latest inflation reading. After all, the Bank of England was slower than its US counterparts when it came to jacking up interest rates, so it only stands to reason that it\u2019s taken longer for inflation to cool.<br><br><strong><em>For markets:&nbsp;<\/em><\/strong><em>Building expectations.<\/em><\/p>\n\n\n\n<p>If the UK is indeed on the same path as its pal across the pond, then you can expect whisperings about interest rate cuts at some point next year. And you don\u2019t need to be a budding Oppenheimer to work out that lower rates might result in cheaper mortgages \u2013 which might, in turn, equal stronger demand for housing. Just take a look at the States: rate-cut hopes have seen a key homebuilding ETF jump more than 30% this year. It\u2019s no surprise, then, that UK builders\u2019 stock prices also leaped when these inflation figures emerged.<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted September 20, 2023 &#8211; <a href=\"https:\/\/go.finimize.com\/wp\/news\/price-and-prejudice\/\">Price And Prejudice<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The UK flouted economists\u2019 assumptions, with inflation flagging in August.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,18,8,9,26,3],"tags":[570,244],"contributors-categories":[13597],"class_list":{"0":"post-196582","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-europe-middle-east-africa","7":"category-macro","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-inflation","13":"tag-uk","14":"contributors-categories-finimize"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Price And Prejudice | Traders&#039; Insight<\/title>\n<meta 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