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November Market Commentary

Posted on November 2nd, 2023

November Market Commentary

The November market commentary shows all eyes have been on the Middle East and fears of a possible escalation across the wider region and a surge in oil prices.

We will be closely monitoring the unfolding situation in the Middle East and if it affects the broader global economy.


Economic growth in the UK remains sluggish, as official figures showed that GDP increased by just 0.2% in August 2023.

According to the Office for National Statistics (ONS), this was primarily driven by solid growth in services but offset by falls in sectors such as manufacturing and construction.

Meanwhile, ONS figures indicated that efforts to drive down inflation still yield limited results.

The inflation rate remained unchanged from the previous month in September at 6.7%, well above the Bank of England’s target of 2%.

The ONS attributed the high rate partly to petrol and diesel costs but noted that food and non-alcoholic drink prices have fallen.

Use the ONS Shopping Prices Comparison Tool to see how average prices are changing.

The Bank has been hiking rates since December 2021 to tackle inflation in the UK, which has been much higher than usual and put households under financial pressure.

Bank Rates

This week, the Bank of England voted to keep interest rates at 5.5%, and Governor Andrew Bailey has told reporters at a press conference that the UK’s central bank would keep rates as high as needed, for as long as needed, to get the level of inflation down.

“Let me be clear, there is no room for complacency. Inflation is still too high. We will keep interest rates high enough for long enough to ensure we get inflation back to the 2% target,” he said.

Tax Cuts

But while recent figures may suggest we may be starting to turn a corner, the Institute of Fiscal Studies (IFS) believes there is no compelling case for net tax cuts “any time soon”.

“The UK economy remains stuck between weak growth on the one hand and the risk of persistently high inflation on the other,” the IFS said. “

UK Property News

House prices increased in October but remain lower than a year ago.

UK house prices rose by 0.9% month on month in October, but house prices were down 3.3% on October last year.

Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said:

“October saw a 0.9% rise in UK house prices, after taking account of seasonal effects. This improved the annual rate of house price growth to -3.3%, from -5.3% in September.

“Nevertheless, housing market activity has remained extremely weak, with just 43,300 mortgages approved for house purchase in September, around 30% below the monthly average prevailing in 2019.

This is not surprising as affordability remains to be stretched. Market interest rates, which underpin mortgage pricing, have moderated somewhat but are still well above the lows prevailing in 2021.

Would you welcome a fall in house prices?


The European Central Bank (ECB) left its interest rates unchanged for the first time in over a year, following ten consecutive rate hikes.

Policymakers had been rating hikes to tackle the rising cost of living, but thankfully, inflation across the eurozone has started to come down.

The inflation rate hit 4.3% in September, which is well down on the peak of 10.6% in October 2022.

The ECB believes that while inflation is likely to remain high for some time, interest rates are now at a level where they could contribute to meeting its 2% target.

Germany, in particular, is going through a challenging economic period, with the European Commission predicting that the country will face a prolonged recession this year.

It is likely to be the only major economy in Europe to see its economy shrink during 2023, and according to the latest European Commission estimates, output will fall by 0.4% this year.

The body has also downgraded its growth forecast for Germany in 2024 from 1.4% to 1.1%.

It was a much more positive picture in Spain, where officials are hopeful it will outpace eurozone growth in the coming months.


This week, the November Market Commentary noted that the US central bank has held its key interest rate at its current 22-year high as it seeks to stabilise price rises, which had recently reached near-record levels.

The Federal Reserve’s rate target remains at 5.25%-5.5%.

The bank has been raising borrowing costs to cool the economy and slow inflation, the rate at which prices rise.

It comes after recent data showed the US economy grew faster than expected.

October ended with better-than-expected economic figures, official data showing GDP rose by 4.9% between July and September, up from 2.1% in the previous quarter.

This was the most significant increase in economic output since the final quarter of 2021 and was attributed partly to healthy levels of consumer spending.

This was welcome news, particularly as last month began with the US government narrowly avoiding a federal shutdown after a short-term deal ensuring funding until November 17th was agreed upon.

Meanwhile, economists are closely monitoring interest rates and wondering how they will head over the coming months. In a poll by Reuters, 45% said they don’t expect to see any rate reduction until the second half of next year at the earliest.

Far East

Embattled Chinese real estate giant Evergrande saw its shares soar after it resumed trading in Hong Kong following a two-day suspension.

The property company’s chairman, Hui Ka Yan, is under police surveillance “due to suspicion of crimes”.

According to the latest official figures, China’s economy grew by 4.9% between July and September, down from 6.3% in the previous quarter.

Ongoing tensions between the US and China have shown no signs of easing following the US government’s decision to restrict advanced chip exports.

China’s foreign ministry argued the curbs, which affect significant companies such as Nvidia, “violate the principles of the market economy and fair competition”.


While relations between China and the US remain frosty, the same cannot be said of China and Russia. Russian President Vladimir Putin recently attended a global summit in Beijing hosted by Xi Jinping, where he was the guest of honour.

In sanction-hit Russia, the government confirmed it would force many exporters to convert their foreign revenues into roubles to help prop up the struggling currency as its invasion of Ukraine continues.

Russia’s financial regulator will monitor and enforce the capital controls on 43 companies in industries such as metal and energy.

Meanwhile, President Vladimir Putin has confirmed Russia will continue increasing the production of military equipment “not by some per cent, but by several times”. This suggests that the prospect of Russia standing down and ending the war in Ukraine is remote, and the country is preparing to continue with its invasion for some time.

Emerging Markets

India’s status as one of the world’s leading emerging markets was reinforced recently by the International Monetary Fund (IMF), which predicted that India and China will jointly account for about half of all global growth in 2023 and 2024.

Feel free to get in touch if you’d like to discuss any of the November Market Commentary and any effects on your investment plans.