Equity markets had a positive performance in August with all major indices making gains for the month as investors and market participants continued to show strong demand for risk assets. The FTSE 100 ended the month up 1.8%, but remains 19% down year-to-date. The British government bond index lost 3.2% during the month. Both the GBP and EUR risk-free rates increased at all terms in August with the exception of one-year rate, which saw a drop of three basis points for both currencies. UK’s CPI inflation increased by 40 basis points in July, posting a reading of 1%. Realised volatilities of all the major indices continued to decline in August. However, the FTSE 100 is still seeing its realised volatility above its historical average, with the index experiencing a realised volatility of 16.8% at month-end. Volatility risk premiums of the FTSE 100 and the Euro Stoxx 50 indices were broadly unchanged. The S&P 500 saw its volatility risk premium increase to 7.7% as its implied volatility had risen by month-end in contrast to its failing realised volatility.