The beginning of 2023 saw inflation continue to rise, the collapse of Silicon Valley Bank, a Bitcoin bull run and major volatility in the banking sector. So, what does that mean for the rest of the year?
Economic growth decline
Experts have predicted that rates of global economic growth will fall during 2023 to around 2.9 per cent. Similarly, global inflation rates are also expected to fall this year which will come as good news for those who are concerned about the cost of living.
Increasingly high interest rates, inflation and disruptions caused by Russia’s invasion of Ukraine are all expected to contribute to declining growth rates. The worst case scenario could spark a recession, which has been a fear amongst analysts for the past decade.
Inflation will slow
Inflation saw tremendous highs in 2022 but this is expected to slow in 2023. This is due to strict conditions that are being implemented by central banks as well as decreasing consumer demand. Nevertheless, it will be several years until bank targets are met.
Lower rates of inflation should improve the cost of living for UK citizens. A fall in inflation rates would also see a drop in the price of consumer goods. Lower inflation can also lead to lower interest rates which could make it easy for individuals to take out mortgages and other financial loans.
Housing prices could fall
Some market experts believe that the price of housing could fall in 2023. The cost of living crisis and high mortgage interest rates mean that demand for housing is low, which could put downward pressure on prices. Nevertheless, high mortgage rates could prevent first time buyers from entering the market and existing homeowners who have a low mortgage rate are likely to stay in their current home to avoid moving to a higher rate.
How to keep up with the markets in 2023
2023 is set to be an interesting year for the global economy. As a result, it is important that investors keep up to date with changing conditions and key decisions.
There are several ways that you can stay on top of important economic events. A good place to start is to use an economic calendar to get an idea of future events that you should be aware of.
There are several versions that could use; however, we recommend using the US economic calendar to start. This is because the US is one of the biggest global economies and decisions made by the US typically impact the entire global market.
Use the calendar to find upcoming events that could impact the markets that you invest in. This could include interest rate decisions, earnings reports, regulatory decisions and any other economic events that are significant. Then, set notifications in your phone calendar to remind yourself to read the news when these events occur. This will prevent you from missing a key event or decision and getting caught out by market movement.