Important information: The value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

NO question about the big market story this week. Rising prices and the measures being taken to combat them are on investors’ radars the world over.

Inflation

All eyes will be on this Wednesday’s official inflation data in the UK - expect prices to continue rising at around 3.2% in September and to tick up to 4% or higher by year end. Andrew Bailey, the Bank of England governor, has made it clear that the UK central bank is ready to counter rising inflationary pressures with higher interest rates. And to do it sooner rather than later. The smart money is now on a December hike from today’s emergency level of 0.1%. Only a month or so ago, markets were expecting the first rise to be next summer. Inflation is a problem in the US, too, where a fall in core inflation in July and August reversed in September.

Growth

Inflation is a concern in the world’s second biggest economy, China, too. But this week’s focus for Asia’s economic giant is more on growth than rising prices. GDP rose by 4.9% in the third quarter, its slowest rise in a year. Quarter on quarter growth was just 0.2%. China is walking an economic tightrope. President Xi Jinping is trying to push through an ambitious ‘common prosperity’ strategy after 40 years of tolerating unbridled capitalism and a widening inequality gap.

Earnings season

Rising inflation will be a key talking point during the unfolding earnings season which got underway last week with a string of buoyant bank results announcements. This week, the focus broadens out with the likes of Tesla, American Express and Netflix in the spotlight. And it’s not just about US companies. Over here, results are expected from Unilever, L’Oreal, Barclays, Philips and Roche. After bumper results in the first two quarters of the year, the July to September period is expected to be more subdued but still strong. The consensus is for a 30% increase year on year for the S&P 500 companies which set the tone.

COP26

Attention is also starting to focus this week on next month’s climate summit in Glasgow. And the pressure is mounting on the UK government to make this more than a talking shop. There are no free lunches when it comes to achieving net zero emissions and on both sides of the Atlantic a gap is opening up between those, like Prime Minister Boris Johnson and President Biden, who want to be climate leaders and other politicians with an eye on the short-term financial costs of reducing carbon.

Bitcoin

And finally, Bitcoin is back in focus. The price is close to an all-time high this week at $65,000. But the big story is whether investors will get the regulatory green light to invest in crypto via ETFs. A key deadline passes tomorrow after which the door is expected to open to a flood of exchange traded crypto offerings.

Important information: Investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to a Fidelity adviser or an authorised financial adviser of your choice.

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