May 2023 Market Commentary

High inflation continued to put the brakes on growth in many major economies throughout April, with the International Monetary Fund expecting global growth to fall from 3.4% in 2022 to 2.8% in 2023.

As always, let’s drill down a bit further and take a closer look at what’s been going on across the globe…


The UK economy failed to see any growth at all during February, according to the latest figures from the Office for National Statistics (ONS). This was attributed partly to the effects of ongoing industrial action, and followed a surprise 0.4% increase in growth in January.

Meanwhile, the International Monetary Fund predicted that the UK’s economic performance would be the worst of any G20 nation this year – including Russia. The UK’s economic performance has been hampered by continued high inflation, which eased slightly to 10.1% in March, but remains well above the Bank of England’s target and exceeded many analysts’ expectations.

Huw Pill, Chief Economist at the Bank of England, commented on the current economic climate by telling a podcast that people in the UK need to accept that “yes, we’re all worse off”. However, this led to a considerable backlash, with the Federation of Small Businesses describing him as “out of touch”.

London, notably, remains a bright spot in the UK economy, with figures from NatWest and S&P Global showing that businesses in the capital are performing better than in any other part of the country. Furthermore, a Deloitte survey of chief financial officers showed the biggest increase in confidence in three years.

In the retail sector, sales volumes fell by 0.9% between February and March, according to the ONS, partly because poor weather kept people away from the shops.

However, British Retail Consortium data showed the number of shoppers visiting stores at the weekend rose by 9.7% in March year-on-year, but despite this upturn, footfall was still lower than it was pre-pandemic.

As ever, the impact of Brexit was in the news again throughout April, as Microsoft President Brad Smith told the BBC the EU was a better place than the UK to start a business. He made the comments after the UK’s competition watchdog prevented Microsoft from buying US gaming firm Activision, which Mr Smith said marked the company’s “darkest day” in its many years of working in Britain.

In the wider labour market, the number of people looking for work went up by 220,000 between December and February, while the number of job vacancies fell for the ninth consecutive period.

The pound ended April up 0.02%, and on the financial markets, the FTSE-100 Index ended the month at 7,870 points, up 3.13% on March.


Ukrainian President Volodymyr Zelenskyy visited Poland during April to thank the country for its continued support and meet with his Polish counterpart Andrzej Duda.

Meanwhile, Russian President Vladimir Putin is understood to have visited occupied parts of Ukraine, which followed an earlier trip to Mariupol in March.

April also saw Ukraine resume its electricity exports for the first time since Russia began attacking its energy infrastructure last autumn.


Economic output in the European Union went up by 0.3% in the first quarter of 2023 compared with the previous three months. Official figures also revealed that average hourly wages and salaries went up by 4.4% across the EU during 2022, rising to €22.9. Across the euro area, average hourly wages and salaries rose by 4% to €25.5.

Meanwhile, the European Parliament is preparing to address concerns over the development of AI technology, with proposed new rules forcing the companies that develop chatbots to state if they use copyrighted material. In addition, policymakers sought to step up its efforts to tackle climate change, approving three pieces of legislation to support its plan to reduce greenhouse gases by more than half by 2030.

April also saw Europe step up its efforts to engage with China, as French President Emmanuel Macron and Head of the European Commission Ursula von der Leyen meet with Chinese President Xi Jinping in Beijing. This follows recent visits from German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sánchez.

On the financial markets, Germany’s DAX index saw an increase of 1.88% in April to end the month at 15,922 points. Meanwhile, the French CAC 40 index rose by 2.31% in the month to end at 7,491 points.


2023 began with a slight slowdown in economic growth in the US, with the economy growing by 1.1% in the first quarter of the year on an annualised basis. Official figures also showed that inflation fell to 5%, which is well above the US central bank’s target of 2%.

Despite this slowdown in growth, the labour market remained resilient, with employers adding 236,000 jobs in March, and the unemployment rate stayed near a historic low at just 3.5%.

April saw the next chapter of the drama at Twitter continuing, with boss Elon Musk threatening to sue Microsoft for allegedly using data from the social media giant without permission, and the removal of blue ticks from verified accounts, as many prominent figures refused to pay for the check mark.

Staying in the tech sector, Seagate was hit with a £241m penalty for allegedly shipping hard disk drives to Chinese firm Huawei, in violation of export controls introduced three years ago.

Meanwhile, policymakers in Montana have passed legislation banning TikTok on personal devices, amid ongoing concerns that the Chinese-owned app presents a national security risk.

Media giant Fox News, meanwhile, was in the news for all the wrong reasons, as it agreed to pay voting machine firm Dominion £634m to settle a defamation lawsuit regarding its coverage of the 2020 presidential election.

On the financial markets, the Dow Jones rose by 2.48% to end the month at 34,098, while the more broadly-based S&P 500 index went up by 1.46% to end at 4,169.

Far East

Unsurprisingly, the lifting of Covid restrictions in China had a positive impact on the economy, with the country’s GDP going up by 4.5% year-on-year. This was driven by an upturn in household spending and an increase in manufacturing activity.

Meanwhile, Chinese technology firm Alibaba has announced plans to launch a rival to ChatGPT called Tongyi Qianwen, and electric car company Tesla has confirmed plans to expand into the country.

Elsewhere in the tech industry, South Korean tech firm Samsung Electronics has estimated a 96% drop in its quarterly operating profit, partly because of the global economic slowdown and reduced demand following the pandemic. As a result, the company plans to reduce memory chip production.

On the financial markets, Hong Kong’s Hang Seng index fell by 2.48% to end April at 19,894. Meanwhile, Japan’s Nikkei index rose by 2.91% to 28,856. China’s Shanghai Composite index rose by 1.54% to 3,323.27 and the market in South Korea rose 1% to 2501.53.

Emerging Markets

Sanction-hit Russia’s currency fell to its lowest value for a year in early April, slipping to 82 roubles against the US dollar on the Moscow Stock Exchange on April 7th.

Despite the sanctions imposed in response to Russia’s invasion of Ukraine, the country is still tipped to see economic growth this year, with the IMF upgrading its growth estimate for 2023 from 0.3% to 0.7%.

Meanwhile, tech giant Apple has launched its first retail store in India. Chief Executive Tim Cook attended the opening in Mumbai, where he was met with claps and cheers from staff and customers eager to pose with him for selfies.

On the financial markets, India’s BSE Sensex index rose by 0.58 per cent to end at 60,649.38 points. Russia’s MOEX index closed at 2,634.94 points, while Brazil’s Bovespa index ended the month at 104,432 points.

And Finally…

One of the biggest worries when ChatGPT emerged was that young people might use it to write their homework for them, and that this would be hard for teachers to spot.

Unfortunately for one student, they made it very easy for their teacher to identify the use of AI, when they submitted an English Literature essay on Shakespeare’s Twelfth Night, with the introduction: “I’m sorry, but as an AI language model, I am not able to complete this assignment. However, I can provide you with some guidance on how to approach this essay.”

The teacher was brutal in her marking, simply circling the offending paragraph and telling the student to rewrite the assignment in their own words.

If you think that the student was unlucky, spare a thought for Naomi Mulumbala and partner Ralph, who bought a multipack of crisps and upon opening one of the bags, were confronted with the sight of just one solitary crisp. Ralph, 31, said the incident has left him with “trust issues” with his favourite crisp flavour and won’t be “risking it again”.


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