Could politics structurally alter the economic backdrop?

With 5 July having marked ten years since the Bank of England (BoE) last raised UK interest rates, we assess the state of the economy and its prospects in light of recent political developments. Although the UK economy has shown resilience since last year’s Brexit referendum, its growth rate decelerated in the first quarter of … Continue reading “Could politics structurally alter the economic backdrop?”

China: policy support offsetting structural headwinds

Despite concerns that China’s economy was undergoing a ‘hard landing’ in January 2016, fiscal, monetary and other government policy stimulus ensured that it was growing slightly faster at the end of the year than it had been at the start. Nevertheless, with the country in the middle of a structural transition from investment towards consumption, … Continue reading “China: policy support offsetting structural headwinds”

Japan: a leveraged play on global growth?

Japan’s nascent economic recovery is showing encouraging signs, with some strength in the labour market and a favourable corporate environment. However, domestic demand remains weak and it appears that cultural headwinds will have to be addressed before a virtuous circle of rising domestic demand and inflation can begin. Meanwhile, Japan’s asset markets are being distorted … Continue reading “Japan: a leveraged play on global growth?”

Theresa May announces UK general election

This morning, UK Prime Minister Theresa May announced the government’s intention to hold a snap general election on 8 June 2017. Parliament will vote to set a date for the election tomorrow, needing a supermajority of two-thirds in favour to pass, although this is expected with the opposition leader Jeremy Corbyn having already welcomed the … Continue reading “Theresa May announces UK general election”

Foreign exchange: a major contributor to portfolio returns

In recent years, subdued global inflation and weak growth have allowed the world’s major central banks to keep monetary policy at extremely accommodative levels. However, this may be changing, as global growth and inflation forecasts have risen amid a shift towards fiscal stimulus in a number of developed economies. With the Federal Reserve (Fed) simultaneously … Continue reading “Foreign exchange: a major contributor to portfolio returns”

Europe: political opportunity amid systemic threats

The eurozone is undergoing an economic recovery, with unemployment falling and the threat of deflation mitigating amid rising global inflationary forces. However, this masks uneven levels of progress being made by the region’s underlying countries. With some of the stronger economies’ business cycles maturing, there remains significant risk that the recovery will stagnate if growth … Continue reading “Europe: political opportunity amid systemic threats”

Europe: political events in Italy prelude to the eurozone’s demise?

Last night, the Italian Government was heavily defeated in a referendum over changes it had proposed to the country’s constitution. This led to the resignation of Prime Minister Matteo Renzi and has thrown significant uncertainty over the country’s political future. Italy’s president has begun the process of selecting a new prime minister to form a … Continue reading “Europe: political events in Italy prelude to the eurozone’s demise?”

Donald Trump and the prospects for US investment markets

Donald Trump’s victory is an event that could one day be looked back upon as a generational turning point in global politics. In this article, we take a step back from the headlines and examine how his election could affect the trends already underway in the US economy, ultimately to determine how investment markets might … Continue reading “Donald Trump and the prospects for US investment markets”

How investors can prepare for rising UK inflation

Various forces are conspiring to push UK inflation higher, here we discuss these and the investment implications of accelerating price rises. Given current economic headwinds, some have suggested that the era of extremely low interest rates and inflation is here to stay. However, a number of factors suggest that UK inflation is set to rise … Continue reading “How investors can prepare for rising UK inflation”

Donald Trump confirmed as the next US President

In this piece, we summarise how we expect Donald Trump’s election as US President to affect the international political arena, the global economy and its investment markets. Now that the dust has settled, Donald Trump has emerged victorious in the 2016 US Presidential election and is scheduled to be sworn in as President on 20 … Continue reading “Donald Trump confirmed as the next US President”

The negative interest rate experiment

The start of this year has seen a continuation of central banks’ policy experimentations, with Japan joining the eurozone, Switzerland, Denmark and Sweden in employing negative interest rate policies (NIRPs). NIRPs can refer to economies’ base interest rates, or more specifically to negative central bank deposit rates (i.e. the interest rates that central banks pay … Continue reading “The negative interest rate experiment”