Our monthly economic review is intended to provide background to recent developments in
investment markets as well as to give an indication of how some key issues could impact in the future.
It is not intended that individual investment decisions should be taken based on this information; we are
always ready to discuss your individual requirements. We hope you will find this review to be of interest.

Official data has revealed that the headline rate of inflation in the UK is now at its lowest level since August
2016, as the economic fallout from the COVID-19 pandemic continues to force price rises down.
Figures released by the Office for National Statistics (ONS) showed that the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same month a year earlier – dropped to 0.8%
in April. This was significantly lower than the previous month’s rate of 1.5% and represented the largest monthly fall in more than a decade.
A key factor behind this easing was a large reduction in petrol and diesel prices, following coronavirus-related
weakness in global oil prices. Cheaper clothing and footwear also helped force down April’s overall inflation rate, while previously announced price caps saw a reduction in household utility bills. There was some upward pressure, however, with prices of games and toys, as well a fresh vegetables, rising. ONS did strike a note of caution with
the data, as 92 items in the basket of goods and services used to calculate CPI inflation were not available to price checkers in April. These ranged from cinema popcorn and restaurant cups of coffee, to haircut prices. As a result, ONS fears inflation readings may be more volatile than usual. Over the coming months, inflationary
pressures are expected to ease further. Indeed, Bank of England (BoE) Deputy Governor Ben Broadbent has said the
Bank expects the CPI rate to approach zero during the fourth quarter and even suggested there was a possibility that
inflation might turn negative at the turn of the year. Mr Broadbent did, however, insist this would not represent the start of a damaging deflationary period.SFFS Economic Review_May 20