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16 Gibraltar International www.gibraltarinternational.comThe Stock MarketSummer market commentary By Mark Maloney, Managing Director, Gibraltar Asset Management Interest rates may stay higher for longer. The Bank of England%u2019s Monetary Policy Committee (MPC) held borrowing costs at 4.25% at its June meeting. Interest rates have fallen 1% since the first cut in August last year, yet the MPC is in no hurry to cut as it waits to assess the impact of oil-price volatility and higher taxes on employers. Markets are pricing in two more quarter-point cuts this year, but the MPC is taking a %u201cgradual and careful approach%u201d. With annual UK inflation still at 3.4% in May, UK rate cuts have been much slower than in the Eurozone, where they are already down to 2%. The MPC is stuck is a quandary. While a weakening in the jobs market should allow for a couple more cuts during the rest of the year, rising inflationary pressures will deter the committee from easing policy any quicker than that. Market OutlookSummer has not typically been a busy time in the stock market, with little net gain over the %u201cWall Street summer%u201d timeframe of June to September. When stocks do make a big move in the third quarter, they are slightly more likely to move to the downside than to the upside as reduced liquidity leads to higher volatility.Of course, calendar-based performance is not much of a forward indicator. Every year holds its own set of geopolitical and macroeconomic challenges. And this summer could be more volatile than usual.The White House administration has been aggressive in rolling out policies (particularly those surrounding tariffs) that represent a pivot of 180-degrees from those of the prior administration. The market response to its policies is still formulating. Continued p18