The US Federal Reserve has been on a path of tightening monetary policy since December 2015. We think 2018 will signify tightening of monetary policy by developed market central banks on a more synchronised basis. The Fed will continue to hike rates and reduce the size of their balance sheet and the European Central Bank (ECB) will reverse their printing of money by tapering their Asset Purchase Programme. Meanwhile the Bank of England (BoE) is likely to raise policy rates, possibly as soon as this November, reversing the emergency cut implemented following last year‘s EU referendum and they could tighten further yet gradually through 2018.
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Following the opening of the 19th National People's Congress in Beijing, please find enclosed a personal view on President Xi's main speech by our chief economic strategist Gerard Lyons. Our investment committee keeps fully abreast of global affairs, both in terms of the opportunities they offer and the wider implications. The Chinese NPC is a political gathering and in that respect, does not directly impact investment markets but, nonetheless, it is important for the whole world to take note of the key issues being discussed and outlined.
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Increased optimism about the world economy and the likelihood of global monetary policy tightening were the main messages from last week’s gathering of the financial industry in Washington.
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There are two key domestic issues this week for UK financial markets. One is the latest inflation news and the implications for interest rates. The second is the ongoing Brexit discussions and what the latest phase of negotiations might imply. Let's focus here on the inflation news.
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Addressing the UK’s low productivity is more important than ever and whilst there is no magical solution to the problem, we can make improvements, says Gerard Lyons.
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The German elections could be a game changer. It is still too early to tell what impact they will have on future German and European policy, but the immediate reception they are receiving in Germany suggests it could yet prove profound.
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Investors’ ambitions can typically be classified as one of two broad goals: accumulating and growing a pot of money for use in the future, or investing to provide ongoing income, such as a pension or for meeting the costs of education or care. For the latter, we often hear that when faced with future cashflow requirements from their investment portfolios, people only want to invest in income-oriented strategies.
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Recall that at Netwealth, our ambition is to deliver attractive portfolio performance over the medium-to-long-term in order to give our clients the best chance of meeting their investment goals.
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Private school fees in the UK rose by 3.5% last year, according to the latest figures from the Independent Schools Council (ISC) released in May. Boarding fees rose by 4.1%, while day fees increased by 3.5%. While the ISC reports that this is the lowest increase since 1994, fees hikes continue to outstrip earnings growth and inflation.
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The first message is that global economic news has been positive over the summer months. Across the major economies, recent data has pointed to growth being solid and inflation low or well behaved. The International Monetary Fund provided a positive tone in early July when their update of the state of the world economy reiterated the positive message they had previously made in April. They foresaw a solid pace to global growth this year and next and a strong recovery in global trade. This latter point is particularly important, as in recent years there has been a downbeat view among economists about the prospects for global trade. There has also been good news across many regions.
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