UK Economics

1. On 22 May the Office for National Statistics announced that the UK’s CPI inflation rate fell to 2.3% in April. This came in above market forecasts for 2.1% CPI growth, but nonetheless marks the first time since mid-2021 that inflation has returned to the Bank of England’s official 2% ±1% target range.
2. Higher than expected UK inflation has led investors to bet that the Bank of England will start lowering interest rates far later than the European Central Bank. On 29 May the Pound climbed to a 21-month high against the Euro, as investors bought Sterling in the expectation that UK banks will offer a higher return on saving (compared to their Eurozone counterparts) in the months ahead.
3. On 31 May the building society Nationwide announced that UK house prices grew by 0.4% in April and May, largely on the back of 10 consecutive months of UK real wage growth. House prices had fallen in February and March of this year, in response to rising mortgage rates.
4. On the fifth day of his general election campaign, Rishi Sunak pledged to raise the personal allowance for pensioners should he win the election, as part of his ‘triple lock plus’ plan. This would amount to a £2.4bn tax cut for over 66 year-olds. 

World Economics

1. The European Central Bank will ignore the recent increase in Eurozone inflation and is forecast to begin cutting rates on Thursday. It will be difficult for ECB policymakers to do anything differently after many of them stated firmly that the ECB is on pace to become the first major central bank to begin decreasing borrowing prices since the largest price increase in a generation began three years ago.
2. Last month, a Chinese trade agency attempted to purchase drone-jamming equipment for Russian buyers, highlighting the close links between the two countries amidst concerns in Europe and the US over China’s supply of dual-use technology to Moscow.
3. US inflation remained at 2.7% in April, according to the benchmark used by the Federal Reserve to calculate its target for price pressures which was in line with economists’ forecasts. 
4. In an attempt to strengthen the yen, Japan spent a record ¥9.8 trillion ($62 billion) in late April and early May. However, as expectations for interest rate increases grow, the yen has continued its decline towards 34-year lows, illustrating Tokyo’s difficulties in preserving the exchange rate.

UK Politics

1. On 22 May Prime Minister Rishi Sunak called the UK general election, which will take place on 4 July 2024. The move came earlier than expected, as most political pundits had forecast an election in the Autumn of this year.
2. The Conservative campaign has encountered several early setbacks. Sunak’s speech calling the election was drowned out by protestors blasting “Things Can Only Get Better” from loudspeakers, Tony Blair’s 1997 campaign song. The PM has also been lampooned for his visit to the Titanic Quarter in Belfast, which drew unwanted comparisons to the eponymous ship. 
3. On 25 May Rishi Sunak announced a controversial new proposal to reintroduce national service, a programme which would compel 18 year-olds to take part in 12 months of community volunteering or a full-time military placement.
4. Despite maintaining a strong 20-point lead in the polls, Labour leader Sir Keir Starmer was criticised this week for his purported ‘crack-down’ on left-wing candidates, notably veteran MP Diane Abbott. Starmer had reportedly attempted to block Abbott’s candidacy, before allowing her to run in the wake of backlash from the left of his party.

World Politics

1. On 30 May, a New York jury found former US President and Republican nominee Donald Trump guilty on 34 counts of falsifying business records. The outcome means that Mr Trump, who most pollsters back to win the election in November, has become the first former US president to be criminally convicted.
2. On 2 June, voting began for Mexico’s presidential election. The result will almost certainly give Mexico its first female president, as the choice this year is a largely binary one between populist candidate Claudia Sheinbaum and conservative figure Xochitl Galvez.
3. On 29 May, the South African general election was held. Incumbent President Cyril Ramaphosa was able to win another term, but his ruling ANC party no longer has a legislative majority after losing 71 seats. 
4. Bill Ackman, billionaire hedge fund manager, became the latest financial executive to back former President Donald Trump in the upcoming presidential election on 31 May. Mr Ackman joins a growing list of prominent executives such as Steven Scharzman (CEO of Blackstone Group) and Omeed Malik (founder of 1789 Capital) that are backing the former president.

Written by Edgar Brown, Shreyas Veturi and Keshav Hajarnavis