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Speaker 1: It's time to catch up with Sam Trathuri, portfolio manager

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Speaker 1: at Milford Asset Management.

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Speaker 2: Good evening, sir, Good evening, Jack.

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Speaker 1: So what did we learn today about the outlook for inflation?

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Speaker 2: I think numbers printers today were very positive and that

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Speaker 2: there was plenty of details across the release showing that

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Speaker 2: inflation pressures are reducing. So probably the three point three

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Speaker 2: percent headline and rate of inflation was what was what

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Speaker 2: everyone wanted to see. It was down on four percent

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Speaker 2: from last quarter, below what most economists and importantly the

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Speaker 2: rb AND said we're looking for or expecting. And I

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Speaker 2: think it also highlights that the demands in the economy's weakening,

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Speaker 2: pressures or tightness that were previously there, and the likes

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Speaker 2: of labor market well and truly back to more normal

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Speaker 2: or pre pandemic levels. And you could say, look that

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Speaker 2: everyone who has been involved in business or watching the

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Speaker 2: economy for some time now well of nine things were weak.

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Speaker 2: But this is really reassuring confirmation, particularly for the RB

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Speaker 2: and SAD that inflation, which has really been keeping in

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Speaker 2: straights high, is now under control.

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Speaker 1: Yeah, so let's think about their position last week. They

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Speaker 1: softened this dance compared to six weeks earlier, so I

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Speaker 1: even caught it a bit of a flip flop. They

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Speaker 1: said they expected inflation could return back to that one

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Speaker 1: to three target band over the second half of this year.

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Speaker 1: How do you think today's data will affect that view?

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Speaker 2: But I think the IBN z Adrian or He'll be

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Speaker 2: very relieved and I think we're shit reassured. And last

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Speaker 2: week they were talking for the first time of emerging

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Speaker 2: downside with economic activity after previously, as you said, being

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Speaker 2: much more concerned about how difficult it would be getting

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Speaker 2: to get so our inflation under control, and that was

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Speaker 2: as recently as May. So I think they'll be able

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Speaker 2: to comfortably now stand behind that message from last week

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Speaker 2: and say, look, we are heading back into that target band.

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Speaker 2: The inflation job is nearly there. The real question now

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Speaker 2: for them, and one that I think most economists will

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Speaker 2: be trying to answer, is when will be official cash

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Speaker 2: erty cuts and how quickly and how many cuts will

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Speaker 2: be made. Clearly, for most of us in the mortgage

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Speaker 2: that's very very important. So financial markets, we have seen

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Speaker 2: expectations for one, if not two cuts priced into markets

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Speaker 2: this year. That means that every meeting meeting of the

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Speaker 2: rb and Z for the rest of the year, of

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Speaker 2: which there are three, will be treated as a live

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Speaker 2: meeting where they could make that change.

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Speaker 1: Yeah, and finally, Sam, we've seen a rally for the

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Speaker 1: inded X since that change in tone from the rbn Z.

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Speaker 1: How did the sheer market react today? Did did the

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Speaker 1: rally continue?

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Speaker 2: The rally continues today, So the market was up again.

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Speaker 2: And look, there definitely has been that big turnaround of

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Speaker 2: performance since that Zen meeting last week. So up four percent,

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Speaker 2: well over four percent since then, which is a real

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Speaker 2: turnaround and performance of the Internet's more broadly over since

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Speaker 2: it's over the over this month compared to in recent times,

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Speaker 2: it has been a real stark underperformer versus other global markets.

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Speaker 2: So what we are seeing is some enthusiasm towards the

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Speaker 2: prospect of rate cuts, and some of the bigger performers

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Speaker 2: in the market, the likes of RYNM and healthcare and

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Speaker 2: fitted building rally quite hard on the news. So broadly,

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Speaker 2: the interet exit as a market with the high degree

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Speaker 2: of sensitivity turn just rates because of the high dividend

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Speaker 2: paying nature of our stocks. But the key, the key

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Speaker 2: risk to all this is that coming up in August

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Speaker 2: we do get earnings financial results from any of our companies,

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Speaker 2: and I wouldn't expect any fireworks there Jack the management teams.

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Speaker 2: The earnings are likely still be pretty tough. If interest

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Speaker 2: rate cuts do come, the transmission through to our economy

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Speaker 2: activity will take time, so well into twenty twenty five,

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Speaker 2: and that's when a big improvement in earnings could start

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Speaker 2: to come through, which is what you really need to

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Speaker 2: drive markets higher.

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Speaker 1: Love you work, Thanks so much, Sam, sam Tratui from

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Speaker 1: Milford Asset Management. For more from Hither Duplessy Allen Drive,

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