Holidays often give you perspective. I write this blog post while enjoying a sunset looking out over the plains of the West Cape in South Africa. With calls for increasing fiscal leniency potentially growing louder, we believe that we are already on the way to helicopter money. If this proves to be the case, what could the implications be for different asset classes?
Many are worried about the UK inflation outlook as a result of a weaker pound. Core inflation rose from 1.5% in 2008 to 3% in 2011 after the pound fell. But inflation was also under attack from higher VAT and a surge in commodity prices. So we see a more gradual increase than consensus this time around.
Those who follow the utterances of finance professionals with gusto will have noticed that it has become de rigueur this summer to share your holiday reading list. Those waiting in eager anticipation of the LGIM Asset Allocation team’s holiday books, or looking for some inspiration this bank holiday weekend, need wait no longer!