In many ways, the role of central banks has been simple over the last two years: inflation has been above target and so interest rate hikes were needed. Now it is a more conflicted role: inflation is well on the way towards the 2% target, yet crucially there are hard yards still to go.

Over the past two years central bankers have faced criticism for misreading the economic climate, particularly their lack of action in 2021 when they mistakenly dismissed rising inflation as a transitory factor which would fade of its own accord, meaning that interest rates were kept too low.

In this latest investment market update the focus is primarily on the economic and investment market implications of recent inflation releases and interest rate decisions.

The latest UK inflation figures were released in mid-September. While the pace of price rises has fallen in a convincing trend since the peak in October 2022, fears had been mounting that the latest figures would show a renewed jump. Such concerns have so far been unfounded, with the headline number actually falling from July’s reading. While only a marginal drop, with the slowing pace of food price rises more than offsetting the jump in motor fuel prices, a continued downward path in inflation could be seen.