INSIGHT

It is traditional for investment banks, brokers and research houses to put out their year ahead outlooks in December. In general, such documents mostly repeat the consensus and attempt to stand out with a few bold calls. It is equally traditional for many of these bold calls to have proved wrong by the end of January.

It was not too long ago that “political risk”, the notion that an election result or a political decision could seriously impact upon asset market returns was primarily the concern of investors in emerging markets.

Labour won a loveless but decisive majority in the UK general election in July promising to be “stable and boring”. Their budget was both and neither.

Spotlight tries to make a habit out of casting a closer look at China at least once every six to eight months. The reason for this is simple: China is too large to ignore.

Regular readers of Spotlight have probably become slightly bored of references to changes in monetary policy taking “a long and variable” time to impact upon the economy. Nonetheless, the point remains a crucial one.

Let’s start with the good news. British inflation in June, as measured by the consumer price index, grew at an annual pace of 2%. That follows the 2% outturn in May and represents the Bank of England (BOE) hitting its target for the first time in many years.

As a general rule of thumb, Spotlight tends to avoid making short-term calls. This time though it seems safe to make an exception.
The Conservative Party will lose the general election due in early July and Labour will form its first British government since 2010.

The latest inflation numbers from the Office for National Statistics disappointed both financial markets and Bank of England watchers.

For both the real economy and for financial markets there are few variables as important as the Fed Funds rate. The pricing of stocks and bonds, the direction of the housing market and corporate hiring and investment plans are all ultimately affected, to a greater or lesser degree, by the decisions the Federal Open Market Committee (FOMC) makes on rates.

Our founding partner, Max Thowless-Reeves, speaks to Professional Wealth Management and discusses the benefits of the UK for high-net-worth families.

It has been more than two years since Russia invaded Ukraine. The war itself has bogged down into a vicious stalemate and the direct economic impacts on Ukraine’s allies have fallen back as global energy prices have receded. However the conflict will eventually end, it seems likely to herald large changes in the structure of the global economy, reshaping global energy markets and pushing defence spending higher.

The United States has been the standout growth story of the post-pandemic years. Perhaps the best way to measure this is to compare the size of national output at the end of 2023 to the level it was expected to be at by the end of 2023 in the last set of pre-covid IMF forecasts back in the winter of 2019.