Ed Smith, Rathbones asset allocation strategist, spoke at ‘Brexit and 100 days of Trump’, an event in our Liverpool office on 3 May. Here is a summary of Eds presentation.
The world is experiencing a period of rising inflation. A rebound in oil prices has helped after dragging down UK consumer price inflation into negative territory briefly in the second half of 2015. Improving wage rates in China, which in the past had been an exporter of global disinflation, have also contributed.
Early last year, investors were preoccupied with fears about the pace of China's economic slowdown and the threat of deflation. Just 12 months later, and almost 10 years since the start of the financial crisis, a global economic upturn appears to be under way across the US, Europe, Asia and most large developing countries.
Stock markets continue to take an optimistic view of the risks to future earnings, but we remain gently cautious and note that there are plenty of reasons not to be complacent.
The probability of a hard Brexit is very much higher now than it was immediately after the referendum, despite a rumoured eleventh hour softening of May's tone ahead of Wednesday's invocation of Article 50.
Keeping his promise to position all major announcements in the autumn so there is sufficient time to implement any changes, the Chancellor tinkered rather than tackled in Wednesday’s Budget. But he also hinted at wider reforms to come.
The machinations of central banks were once conducted in near-anonymity and of interest only to a small band of finance specialists. Now they are both political and highly public. With ultra-low interest rates representative of the “new normal”, what are the chances of a return to the low-key status quo that endured for so long?
The High Pay Centre think tank has dubbed today ‘Fat Cat Wednesday’, having calculated that by lunchtime leading executives will already have earned the average UK salary of £28,200.
With the EU referendum and the election of Donald Trump, 2016 has been an interesting year. Neither result was predicted by the experts or pollsters who get paid so well to know ‘what people think’. And, in both cases, the victors made campaign commitments that were outright nonsense.