Stagflation: Why this isn’t a bad 1970s rerun
Feeling an uncomfortable sense of déja vu? Listen to Rathbones’ co-chief investment officer Edward Smith explain why we don’t see an economic rerun of the 70s.
There are undeniable similarities between some of the challenges emerging today and things that happened in the early 1970s: soaring oil prices, rising interest rates, inflation and slowing economic growth. It’s understandable why this raises the spectre of a rerun of 1970s-style prolonged weakness in equity-market returns and economic ‘stagflation’ (sputtering growth and spiralling prices).
There are some striking echoes of things that happened 50 years’ ago, but as Ed explains in this 6 minute video, we see five clear reasons why history isn’t likely to be repeated.
Tune in to hear Ed explain how 1970s inflation was an economic anomaly, even if you go back a few hundred years, and one that is unlikely to be repeated today.