Knowledge and Insight - Economy

With the shadow of a general election looming over the government, chancellor jeremy hunt announced another reduction in the headline rate of national insurance (of two percentage points) in a bid to shore up his party’s flagging support. But that cut will do little to change the near-term economic outlook, and the work of dealing with the bigger structural problems facing the uk economy has largely been left until after the election.

The Chancellor hopes to narrow Labour’s yawning lead in opinion polls with a tax-cutting Budget. Giveaways may be stymied by a poor economy and higher costs of public services.

Obstructive planning laws are curtailing the supply of homes in the UK, the regulator says. Meanwhile, the quality of building is slipping, suggesting we’re wrapped up in the wrong red tape.

The UK slumps into recession even as people’s spirits and retail sales rise. Meanwhile, trouble may be brewing in American inflation.

Developed market equities have continued to perform well in the first few weeks of 2024. In part, this is commensurate with the improvement in some leading indicators of the economy, pointing towards a less challenging environment for corporate profits ahead. Edward Smith, our Co-CIO of Rathbones Investment Management, explores what this means for our investment strategy.

The US S&P 500 stock market index broke through 5,000 for the first time, hitting a record high last week as investors shrugged off worries that interest rates may not fall as fast as many had hoped.

America’s Magnificent Seven tech titans drove equity gains last year, but the latest earnings results have been less than magnificent for some. Can they repeat their performance in 2024?

US jobs strength pushes back interest rate cut forecasts yet further. Meanwhile, higher rates and changing business needs keeps squeezing commercial property.

No change to monetary policy is expected this week, but investors will be eager for any clue about the Bank of England’s thoughts on inflation and interest rate cuts.

UK retail sales slumped in December while inflation went in the other direction. Is the UK now in recession, albeit the mildest of the mild?

Pessimism about UK equities is widely held. If it’s based on misconceptions, this could be opening up an opportunity.

Rathbones’ co-chief investment officer, Edward Smith and head of equities, Sanjiv Tumkur share their views on the key questions facing investors and the market impact of the Magnificent Seven US tech giants.