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On Sunday, Biden and McCarthy reached a tentative deal regarding the US’ debt ceiling, putting an end to a month-long standoff which threatened both the US and global economies. The deal now awaits approval from Congress ahead of the rapidly approaching deadlines in early June. Select areas of markets were in turmoil last week while they awaited clarity on the situation; notably, investors demanded higher payments for holding short term US Government bonds – those most affected by a default.

Mortgage rates in the UK rose once again as higher-than-expected inflation numbers raised the expectations for the BoE’s terminal rate. The most significant increase was seen from Nationwide, who raised rates by 45 basis points. However, activity is less frenzied than after the mini-budget last year. While inflation coming down is good news, Core inflation remains at a 31-year high.

An update to growth data has shown that Germany has fallen into recession in the first quarter of 2023. The economy contracted by 0.3% in Q1 2023, following a 0.5% contraction in Q4 2022. The economy has felt the weight of immense inflation; Germany’s rate was 7.2%, above the Eurozone average. On top of reduced household spending, most notably is that industrial orders in the country have taken a huge hit.