Ofgem CEO, Jonathan Brearly, says he will be writing to UK finance minister, Rishi Sunak, today to inform him on the price cap change. Adding that „the price changes are genuinely a once in a generation event not seen since the 1970s“. Just a reminder that the energy price cap was £1,277 in October last year. That’s quite a staggering rise.This just adds to more woes for UK households as the cost-of-living crisis continues to deepen. There will be many that won’t be able to afford this when the change is officially implemented.

Equities are still looking subdued on the session with tech the laggard after the Snap warning earlier, as risk trades are pulling back some of their advance from yesterday. Here’s a look at some of the moves today:S&P 500 futures -1.1%Nasdaq futures -1.7%Dow futures -0.7%Eurostoxx -0.9%Germany DAX -0.9%France CAC 40 -0.9%UK FTSE -0.3%As much as there was some optimism late last week (into the closing stages at least) and early this week, it is best to be reminded about the challenging backdrop that has contributed to the drag in risk trades since April.Yes, we may be overdue a correction. I mean seven straight weeks of declines for US stocks is definitely up there in terms of the selling being rather stretched. But we certainly are getting a reminder today of all the major themes at play in markets.Inflation pressures are still running rampant as evident by European PMI readings today. Recession risks are continuing to grow by the day and that is evident by the extremely poor UK PMI readings today. And central banks are continuing to look towards tightening policy as evident by Lagarde’s commitment in her remarks earlier today as well.Looking elsewhere, bonds are also bid as risk aversion grips markets in general. 10-year Treasury yields are down 4 bps to 2.82%.In FX, the dollar is sitting more mixed with light changes against most major currencies. The euro and yen are gaining slightly with the former benefiting from Lagarde’s comments and the latter from safety flows into bonds. The pound is the laggard as markets pare back BOE rate hike bets following flattish economic activity seen in May from the PMI readings.

Prior -35UK retailers reported average sales for the time of year in May but expect them to dip below seasonal norms again in June. Of note, the survey found that sentiment in the retail sector deteriorated at its quickest pace since November 2020. Meanwhile, investment intentions for the year ahead stand at their weakest level since the early stages of the pandemic in May 2020.That certainly doesn’t fuel much confidence when put together with the poor PMI readings earlier here.

They now expect German inflation to hit 7%, after initially forecasting 3.5% inflation in its February forecast. Well, we’re already there and given how things are progressing, it may be the case that inflation pressures stay higher for longer now – not helped of course by the Russia-Ukraine conflict.The more notable thing is that from the survey of 25,000 companies, DIHK says that nearly 40% plan to pass on the higher costs on to customers with more than every second company in industry and trade stating that it was intending to pass on the cost increases.Well, the situation in the UK is a rough look for what may be the case in Europe later in the year.