INSIGHT
SORBUS spotlight: The UK’s Fiscal Mess
Last Autumn, at her first budget, Rachel Reeves took a gamble. It has not paid off.
SORBUS spotlight: European growth
Last Autumn Isabel Schnabel, a member of the European Central Bank’s rate-setting executive committee, made a speech simply entitled “escaping stagnation”.
Nvidia
On Monday, Chinese company DeepSeek claimed that after investment of a mere $5.6m it was able to replicate the functionality of, what were deemed, the leading AI models. DeepSeek R1, its new “reasoning model”, was released on 20th January 2025 and has already become the top free app on the Apple Store (source: Apple Store), startling its rivals and stockmarkets.
SORBUS spotlight: How far from 2%?
Few things will matter more to the UK’s economic performance in 2025 as the course of inflation. And yet the outlook is unusually cloudy.
SORBUS spotlight: The Uncertainties in 2025
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.
SORBUS spotlight: Trump
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.
BUDGET REFLECTIONS
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.
SORBUS spotlight: China Watch
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.
SORBUS spotlight: longer and more variable
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.
SORBUS spotlight: There and back again.
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.
SORBUS spotlight: What difference will the election make?
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.
SORBUS spotlight: looking back on the big inflation
The latest inflation numbers from the Office for National Statistics disappointed both financial markets and Bank of England watchers.