UK stock market and funds review – inflation headlines mask a compelling valuation opportunity

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We look at what’s happened in the UK economy, how the stock market's been coping, and how our Wealth Shortlist funds have fared.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

25 July 2023

Sticky inflation continues to be a key challenge for investors. While inflation in the US has continued its steady downward trajectory, in the UK it’s proving more difficult for the Bank of England (BoE) to control.

While headline inflation in the UK has been falling, core inflation, which excludes energy, food, alcohol and tobacco, has been more difficult to tackle, though it’s dipped in the 12 months to June.

These goods have volatile prices and are influenced more by taxation than interest rates – so core inflation is seen as giving a good snapshot of how prices are changing in the wider economy.

The UK is suffering from a combination of energy related problems and a tight labour market – a rise in early retirements, long-term sickness and Brexit are all