Skip to main content
  • Wealth management
  • Asset management
  • Wealth management
  • Financial adviser
  • International
  • MyRathbones login
  • Financial Planning login
  • Donor Advised Fund login
Home
  • Funds and strategies
    Funds and strategies

    Visit our fund centre for our full fund range

    Funds and strategies
    • Equities

      Our 4 UK-based stock-picking funds with investments in the UK and abroad

    • Fixed income

      Our 4 bond funds offering different risk levels, returns and markets

    • Multi-asset

      6 genuinely active, globally unconstrained, directly invested strategies

    • Sustainable

      Our 3 sustainable funds come in equity, fixed income, and multi asset varieties

    • How to invest

      Invest in our funds by contacting us directly, through your adviser, or on a third party platform

  • Literature
    Literature library

    Search our full library for information about a specific fund

    Literature
    • Assessment of value

      See the assessment of value reports for our funds

    • Glossary

      Search our A-Z for definitions of industry terms and acronyms

  • About us
    About us

    An active management house, offering a range of investment solutions

    About us
    • Our people

      Search our peoples directory

    • Awards

      See our fund awards from rating agencies and trad publications, dating back to 2002

    • Responsible investing

      Our responsible investment principles ensure that the companies we invest in operate in the long-term interests of shareholders

    • Media centre

      Read the latest Group news

    • MIFIDPRU 8
Let's talk

Search

Review of the week: Big ambitions, bigger uncertainties?

1 November 2021

The eyes of the world are watching COP26 for bold action on climate change. Meanwhile, the UK chancellor envisages a ‘new age of optimism’.

Article last updated 22 July 2025.

Good COP, bad COP?

The big moment the world has been waiting for has finally arrived. The 26th Congress of the Parties (COP) global climate summit is now gathered in Glasgow and concrete action is now expected from a watching world.

It’s vital that COP26 reviews progress on the long-term decarbonisation goals established by the historic Paris Agreement. The 2020 deadline agreed for these goals (known as ‘Nationally Determined Contributions’ (NDCs)) was pushed back to match the pandemic–affected COP schedule. But deepening understanding of the science around climate change (and the rapid pace of action required) mean COP26 must deliver tougher commitments.

The question of who pays the cost for developing nations is also highly relevant. Under the Paris Agreement, developed nations pledged to provide $100 billion by 2020, but good progress was stalled by COVID-19.

At the G20 summit in Rome to pave the way towards COP26, G20 leaders agreed to end international financing of coal power while stopping short of plans to phase it out. They also pledged to take steps to limit global warming to 1.5C. But the deep divisions over coal (China recently ramped up coal production by more than what Western Europe mines in a year) highlight the challenges ahead at COP26. Our latest Planet Paper: Good Cop, bad Cop explores the roadmap to COP26 in full and provides a lens to show us what a good COP would look like.

A Budget for a ‘new age of optimism’?

Big ambitions also drove UK Chancellor Rishi Sunak’s third Budget, which he described as a package for a ‘new age of optimism'. Forecasts from the Office for Budget Responsibility (OBR) showing that pandemic ‘scars’ on the British economy are proving less deep than expected gave the Chancellor room to unveil big public spending plans (see InvestmentUpdate: Autumn Budget 2021)

But there’s much debate about whether the chancellor and the OBR’s forecasts of 6% growth in 2022 and 4% inflation will prove over optimistic. The OBR now thinks UK GDP will be back to its pre-COVID level by the end of the year, a very significant upgrade from its last forecast in March. Nevertheless, there’s still huge uncertainty around the full extent of eventual pandemic scarring.

Meanwhile, after its short pause in September, we expect UK inflation to pick up again in October as the 12% rise in the energy price cap takes effect. A perfect storm of factors, largely due to the disruption of both demand and supply, is then likely to push CPI inflation above 4% by the end of the year and keep it at a similar rate through to spring 2022.

Runaway inflation still seems very unlikely to us. The major cause of inflation around the world is still that we’re all spending an unusual amount on goods because it’s taking longer to spend as much on services as we did before the pandemic. Closed gyms, for example, drove a scramble to buy exercise equipment that people could use at home.

There are some signs that the goods/services imbalance is starting to correct. Service sector activity held up much better than expected in the latest business confidence (PMI) surveys: the UK service index rose from 55.4 to 58.0 in the survey covering early October.

If the Bank of England (BoE) hikes rates, it won’t bring the demand for microchips back into balance with supply or convince people to stop buying new furniture and spend more money in the cinema. We think it would be a mistake if the BoE embarked on a marked tightening cycle to combat inflation because we think the underlying causes are not something UK policy can influence.

We’re somewhat concerned, therefore, that Bank officials haven’t pushed back on the rapid change in interest rate expectations being priced into the UK gilt market. These now anticipate four to five rate hikes between November and the end of 2022, taking base rates to between 1 and 1.25%. In our opinion, this would be a significant monetary policy mistake that we do not expect the Bank to carry out. We think base rates back to 0.75% by the end of 2022 to be more realistic.

 Index

1 week

3 months

6 months

1 year

FTSE All-Share

0.5%

2.9%

5.6%

35.4%

FTSE 100

0.5%

3.5%

5.9%

34.4%

FTSE 250

0.8%

0.8%

4.3%

37.2%

FTSE SmallCap

0.0%

1.6%

5.3%

49.2%

S&P 500

1.8%

6.5%

11.8%

32.2%

Euro Stoxx

0.7%

2.1%

5.5%

35.5%

Topix

0.1%

2.5%

2.8%

9.2%

Shanghai SE

-0.7%

7.1%

5.0%

6.9%

FTSE Emerging

-1.9%

1.7%

-2.8%

8.8%

Source: FE Analytics data sterling total return to 29 October These figures refer to past performance, which isn’t a reliable indicator of future returns. Investments can go up or down and you may not get back your original investment.

If you have any questions or comments, or if there’s anything you would like to see covered here, please get in touch by emailing review@rathbones.com. We’d love to hear from you.

View a PDF version of Review of the week.

Bonds
UK 10-Year yield @ 1.03%
US 10-Year yield @ 1.56%
Germany 10-Year yield @ -0.11%
Italy 10-Year yield @ 1.14%
Spain 10-Year yield @ 0.62%

Economic data and companies reporting for week commencing 1 November

Monday 1 November

UK: PMI Manufacturing
US: PMI Manufacturing, ISM Manufacturing, Construction Spending

Full-year results: Agriterra, Brighton Pier, Harland & Wolff, Int.biotech, Lok N Store, Pensana
Interims: Challenger, Ryanair, Victoria Oil & Gas

Tuesday 2 November

US: Auto Sales
EU: PMI Manufacturing

Full-year results: Oncimmune, UpGlobal
Interims: BP Marsh

Wednesday 3 November

UK: Nationwide House Price Index
US: MBA Mortgage Applications, Crude Oil Inventories, Factory Orders, PMI Composite, PMI Services, ISM Prices Paid, ISM Services
EU: Unemployment Rate

Full-year results: Nanoco
Interims: Braemar Shipping, Esken, Trainline

Thursday 4 November

UK: PMI Construction, BoE Interest Rate Decision
US: Initial Jobless Claims, Continuing Claims, ISM Prices Paid
EU: PMI Services, PMI Composite, Producer Price Index,

Full-year results: Gattaca
Interims: BT, Electrocomponents, J Sainsbury, Wizz Air

Friday 5 November

UK: Halifax House Price Index
US: Non-farm Payrolls, Unemployment Rate, Consumer Credit
EU: Retail Sales

Interim results: Kainos Group

Let's talk

Ready to start a conversation? Please complete our enquiry form, we look forward to speaking with you

Enquire
Rathbones Logo
  • Important information
    • Terms and conditions
    • Modern Slavery Statement
    • Accessibility
    • Privacy
    • Consumer Duty
    • Cookies
    • Update cookie preferences
    • Sitemap
  • Important Information
    • Complaints
    • Voting disclosure
    • Assessment of value reports
    • TCFD Reports
    • Financial Ombudsman Service
    • Financial Services Compensation Scheme
    • Status of our websites
Address

Rathbones Asset Management
30 Gresham Street
London
EC2V 7QN

Rathbones Asset Management Limited is authorised and regulated by the Financial Conduct Authority and a member of the Investment Association. A member of the Rathbone Group. Registered Office 30 Gresham Street, London EC2V 7QN. Registered in England No 02376568.

© 2025 Rathbones Group Plc Incorporated and registered in England and Wales. Registered number 01000403

Follow us
  • LinkedIn
Welcome to Rathbones Asset Management Site
This site is designed for individual investors. If you are not interested in asset management please visit <a href='/en-gb/wealth-management'>our homepage</a>.

The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.