Inflation Progress (2 min read)

UK inflation has dropped below the Bank of England’s 2% target for the first time in three years. With the 30^th October Autumn Budget barely a fortnight away, the US election getting ever nearer and Middle East tensions hanging in the balance, could hikes in food and energy prices mean the headlines are short-lived?

Stock and Bond Market Correlations.

It might just be that we have entered a healthier period where equities are driven more by the prospect of increased productivity due to themes such as AI and the robustness of the economy than by excess liquidity finding itself into the market, even at elevated valuations. This should make the 60/40 portfolio stance a…

Summer rate cuts expected.

Rhetoric from the Federal Reserve and the Bank of England following monetary policy meetings this week has been softer in tone regarding the fight against inflation and the consequent outlook for interest rates. Markets are discounting…

Don't bank on big interest rate cuts.

Yesterday, 20th February, Andrew Bailey was in front of the Treasury select committee and the headline in the financial media was that the Bank of England does not have to wait for the inflation rate to hit the 2% target before cutting interest rates. In the same breath the Governor said…

Is the year-end rally overdone?

Markets rallied strongly into the year end driven by the prospect of interest rate cuts in the first half of 2024. In this article we question the justification for such cuts in rates and the short-term optimism that this has brought to equity markets. Our investment process remains focused on underlying fundamentals.

2023 Year in Review

2023 has been an eventful year of interest rate hikes, inflation holding on and market volatility. We recap on the changes we have made to client portfolios and what next year might look like.

Rate rises by the Fed and BoE on pause.

The US Federal Reserve raised interest rates yesterday as expected, but the Bank of England paused, leaving interest rates unchanged. This might bring into question the BoE’s credibility around the fight against inflation.

Post-Covid markets in the context of the last two decades.

As policy makers now deal with an inflationary environment after years of fighting deflation, higher interest rates will lead to a different market backdrop.