A roller-coaster of a year finished on a high note for the markets, and we start 2021 with a sense of relief that one of the most difficult years many of us have ever experienced is behind us.
While we were all cooped up inside, everything was happening out there. Breakthroughs on Brexit and COVID-19 collided with political strife and big moves in bond yields.
A free trade agreement with the EU avoids damaging tariffs, but other barriers remain.
We close a difficult year with a sense of relief, and the tools to deal with the challenges ahead.
Brexit was always going to be hard. The tortuous negotiation of a trade deal highlights the difficult compromise at its heart: the freedom of sovereignty or the prosperity that comes with smooth trade.
Rather than try to reduce it by austerity, inflation or default, the government should focus on keeping the rate of economic growth above the cost of servicing the debt.
The Bank of England has recently added to its stimulus programme yet again, and it isn’t ruling out negative interest rates. But don’t believe the hype – it’s not yet ruling them in either.
News of a potentially viable vaccine is welcome, yet markets have rocketed back extremely quickly considering it is yet to be approved. With COVID-19 spreading rapidly once again, time is of the essence.