The year-on-year increase in inflation to 11.1% is a 42-year high and was higher than most forecasts including the 10.9% forecast by the Bank of England (BoE).   Energy costs were the largest driver of the increase with the electricity, gas and other fuels category up by nearly 90% over the past year. However, year-on-year core inflation (excluding energy, food, alcohol and tobacco) remained unchanged from September at 6.5%.  On a positive note, purchasing managers reported fewer instances of supply shortages, which helped overall production volumes during the month. Input prices also eased modestly, which helped improve sentiment in the manufacturing and services industries.

In the US, total retail sales for October were stronger than expected, increasing by 1.3% on the back of a similar increase in motor vehicles and accessories and a 4.1% rise in fuel costs. This resilience in consumer spending was not reflected in industrial production which declined by 0.1% in October as a slight rise in manufacturing was more than offset by declines in utility and mining, while the housing market is clearly in recession with total housing starts falling by 4.2% in October. These signs of deterioration are of little surprise given the weak global backdrop, rising interest rates and the strong U.S. dollar.

The lacklustre economic data did not affect the global equity markets which continued to improve with the MSCI Index increasing by 6.8% during the month.  The S&P 500 did not perform as well as the global index, increasing by 5.38%, while the Dow Jones Industrial Average increased by a similar 5.67% with the tech heavy Nasdaq Composite up by only 4.37%.

The broad UK market continued its recent upward momentum with the FTSE 250 Index increasing by 7.12% during the month following a 4.2% increase in October, while the large cap FTSE 100 Index showed an improvement of 6.74% during November. The Athelney portfolio also had a strong month, increasing by 6.84% during the month and, after providing for expenses, the NAV was up by 6.71% to close at 220.9p at the end of November.  The Small Cap Index performed similarly, up by 6.39% while the AIM All-Share Index was a percent lower, only up by 5.27% with the Fledgling Index up by a much lower 3.67%.    

We made no changes to the portfolio, with cash comprised 11.3% of the portfolio at month end.