The Monday note - 23 April 2018

• The FTSE 100 closed on Friday at 7,362.7, up 99 points on a week earlier, as investor concerns over global risks, such as a trade war, moderated. The 10-year Gilt yield inched up 4 bps from the previous week to 1.48%. 
• Sterling weakened following a fall in UK inflation to 2.5% in March, and dovish comments from Mark Carney. The Bank of England Governor talked down the likelihood of a base rate rise in May. 
• UK Chancellor Philip Hammond told journalists he had “dammed the flow” of bank jobs leaving London due to Brexit. Hammond said he was “confident of being able to negotiate an arrangement” allowing London banks to continue serving EU clients. 
• Goldman Sachs acquired personal finance app, Clarity Money, for an undisclosed sum. The app uses machine learning to help consumers manage their finances. 

Chief Economist comments: 

Last week, the inflation figures blindsided the widely held view that the UK base rate would rise in May. The hawkish case for interest rates may be facing another data-related setback when the Q1 GDP figures are released. The ‘beast from the east’ bad weather will certainly have dampened growth in March. If the MPC does not raise rates in May, then the next meeting which coincides with the Bank of England’s in-house inflation report is August. The can could be going much further down the road.