Following Fed Chair Powell’s hawkish speech at Jackson Hole at the end of August, a Fed “pivot” away from their plans to raise interest rates is unlikely for the rest of 2022. The US economy appears to be overheating – inflation is at multidecade high, and the Fed is looking to match labour demand with available supply, to reduce inflation risk. But there is good news for the US when it comes to inflation: US CPI inflation stayed flat in July and is expected to do the same in August. Yet there is still upward pressure in the underlying rate of US inflation, and political pressure to bring down the cost of living. Eurozone consumer confidence in August was lower than the depths of the pandemic in April 2020. In contrast, the higher inflationary environment has meant improved pricing power for listed European companies. Vulnerable sectors include heavy energy dependent users including the auto sector and the European consumer who is probably spending a lot more on energy and less in the shops. For the UK, we have a new PM making big promises, but inflation remains the big unknown. A lot depends on what the new PM will do to mitigate the rising cost of energy. Consumers and businesses are tightening their belts to pay for the sharp energy cost increases. Most consumers are choosing to save less and borrow more to get through. And, next year is looking tough for high streets up and down the country as economists forecast no real household consumption growth in 2023.