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Our monthly market update.
Despite the uncertainty caused by the Delta variant of Covid-19, the global economic recovery continued in July. Vaccine rollouts are making steady progress and restrictions on activity are being eased further in several major developed countries.
The global economic outlook remains positive, with data suggesting that the euro area is experiencing a return to growth following a double dip recession as pandemic restrictions are eased in the region.
Concerns regarding more persistent inflation impacted markets, which were more volatile and a little constrained in May.
Fears that inflation may force central banks to raise interest rates earlier and more quickly than expected, could bring about the end of the post pandemic growth rebound.
It has been more than a year since the World Health Organisation declared the spread of COVID-19 as a global pandemic. In the period since, tremendous efforts have been exerted in an attempt to stop the spread of the virus and protect people and economies.
Global economic growth forecasts for 2021 have generally been revised upwards, with estimated growth for the US and emerging markets rising to 7.5% and 6% respectively. The optimism for higher growth is in part due to the passing of a further stimulus package in the US and the progress of the Covid-19 vaccine rollout across the globe.
The world reached a psychologically significant milestone on the 3rd February, as the number of people vaccinated against Covid-19 exceeded the number of confirmed cases, according to the Financial Times vaccine tracker.
Social restrictions increased during January as COVID-19 cases surged. This weighed on the prospect for short term economic growth, especially in Europe.