Ever since the Brexit vote, financial markets have had an uneasy relationship with the UK. The pound fell sharply after the vote to leave the European Union in June 2016, which surprised many in the City, and since then, UK financial markets have been volatile, trying to price in the consequences of this decision.Continue reading
Liz Truss, the favourite in the race to succeed Boris Johnson as prime minister, has laid the blame for inflation at the door of the Bank of England, saying it must do more to fight price rises.
Truss also said she would change the Bank of England’s mandate if she becomes prime minister, to ensure that the central bank fights inflation more efficiently, but gave no details about what that change would entail.
With consumer price inflation hitting a 40-year high of 9.4% in June, you may think she has a point. The Bank of England is behind the curve, but when it comes to changing the central bank’s mandate, I really hope Liz Truss is lying. If she is not, then we should all be very afraid.Continue reading
The return of inflation has taken a lot of people by surprise, although it should not have done. Worryingly, even central banks have acted quite surprised by the abrupt rise in prices, when they should have expected it.Continue reading
Besides the immense human tragedy that it has caused, Russia’s brutal attack on Ukraine has also thrown emerging markets back at least a decade in terms of attractivity for investors. It will be hard, if not impossible, for the asset class to bounce back.Continue reading
While all eyes are on what central banks will do with interest rates, consumers and investors alike should really worry about what commercial banks will do.Continue reading
European stock markets recouped all the ground lost since the February 24 Russian invasion of Ukraine, but investor optimism may be misplaced.Continue reading
Will 2022 be the year when the tide goes out in Europe’s financial markets? Many commentators now say it will, and point to the large sums of cash that have gone into stocks, bonds and other financial assets in the past.Continue reading
With almost every investor out there claiming deep commitment to the environmental, social and governance (ESG) cause, one issue on which there is surprisingly little debate is that of cryptocurrencies.
Investor enthusiasm for these two new buzzwords in the investing world is high, but few people are ready to admit that they are mutually exclusive: you cannot claim to focus on ESG and own Bitcoin at the same time.Continue reading
Recent capital flows highlight a paradox: investors are afraid of inflation, but seem to have increased their allocation to just the assets that would do worst out of it.Continue reading
“Transitory” is the preferred word to describe inflation these days. Central bankers love it, because it means they can continue their easy money policies. Investors love it, because it means the markets’ party goes on.Continue reading