{"id":2991,"date":"2021-10-06T10:42:29","date_gmt":"2021-10-06T10:42:29","guid":{"rendered":"http:\/\/www.wealthatwork.co.uk\/jpm\/2021\/10\/06\/market-update-6th-october-2021\/"},"modified":"2021-10-06T11:13:33","modified_gmt":"2021-10-06T11:13:33","slug":"market-update-6th-october-2021","status":"publish","type":"post","link":"https:\/\/www2.wealthatwork.co.uk\/jpm\/2021\/10\/06\/market-update-6th-october-2021\/","title":{"rendered":"Market Update &#8211; 6th October 2021."},"content":{"rendered":"<div class=\"wpb-content-wrapper\">[vc_row][vc_column][vc_empty_space][vc_raw_html]JTNDaWZyYW1lJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZwbGF5ZXIudmltZW8uY29tJTJGdmlkZW8lMkY2MjQzNTY5OTQlM0ZoJTNENzI0NDhiZjY0MSUyMiUyMHdpZHRoJTNEJTIyNjQwJTIyJTIwaGVpZ2h0JTNEJTIyMzYwJTIyJTIwZnJhbWVib3JkZXIlM0QlMjIwJTIyJTIwYWxsb3clM0QlMjJhdXRvcGxheSUzQiUyMGZ1bGxzY3JlZW4lM0IlMjBwaWN0dXJlLWluLXBpY3R1cmUlMjIlMjBhbGxvd2Z1bGxzY3JlZW4lM0UlM0MlMkZpZnJhbWUlM0U=[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column][vc_column_text]We had hoped that OPEC would announce a further increase in their output quotas following their October meeting to help satisfy the recovering demand, but unfortunately the cartel simply stated that it would stick to its previously announced increase of 400,000 barrels a day from November.<\/p>\n<p>Consequently, this is likely keep the energy market extremely tight \u2013 and as a result, the price of a barrel of Brent crude now trades back above $80 for the first time since October 2018.<\/p>\n<p>A higher oil price doesn\u2019t simply mean higher petrol pump prices:\u00a0oil accounts for a large proportion of the total cost to produce all sorts of everyday products from plastics, household products and clothes, not to mention the energy to produce food (fuel, electricity, fertiliser and pesticides) and metals (energy accounts for a large percentage of a mine\u2019s operating cost and, for example, the production of aluminium).<\/p>\n<p>As such, this is likely to mean that the transitory inflation we are currently experiencing (due to supply chain constraints) is likely to last slightly longer!<\/p>\n<p>On a positive note, with oil trading above $80 a barrel, we would expect the US shale oil producers to start increasing production &#8211; which should put a ceiling on the oil price.<\/p>\n<p>Additionally, while this could result in transitory inflation for longer, higher interest rates won\u2019t do anything to solve the problem:\u00a0higher interest rates won\u2019t result in an increase in the number of lorry drivers; or make the winter weather warmer; or provide more capacity at the world\u2019s ports; or increase the capacity for semiconductor production \u2013 and although central banks are itching to increase interest rates, we believe common sense will prevail as the rise in energy prices will reduce our disposable income and if interest rates were to increase significantly, it could impact household financial stability, especially in the UK given the end of the universal credit uplift, coupled with next year\u2019s planned increase in National Insurance rates.<\/p>\n<p><strong>Investment Management Team<\/strong>[\/vc_column_text][\/vc_column][\/vc_row]\n  <\/div> ","protected":false},"excerpt":{"rendered":"<p>We had hoped that OPEC would announce a further increase in their output quotas following their October meeting to help satisfy the recovering demand, but unfortunately the cartel simply stated that it would stick to its previously announced increase of 400,000 barrels a day from November.<\/p>\n","protected":false},"author":1,"featured_media":2996,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"_links":{"self":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2991"}],"collection":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/comments?post=2991"}],"version-history":[{"count":2,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2991\/revisions"}],"predecessor-version":[{"id":2995,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/posts\/2991\/revisions\/2995"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media\/2996"}],"wp:attachment":[{"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/media?parent=2991"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/categories?post=2991"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.wealthatwork.co.uk\/jpm\/wp-json\/wp\/v2\/tags?post=2991"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}