Our Views on the Markets and the Economy

Yesterday’s measures from the Chancellor were necessary. His timely assistance focused on a new targeted and temporary job support scheme to replace the expiring furlough, easing loan repayment terms for firms and a wider, more flexible VAT regime.

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The government needs to unveil a pro-growth economic strategy. There is too much uncertainty about the consequences of the necessary policy-easing that has taken place.

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The dollar’s demise has been predicted often. It is being forecast again now with questions once again raised over its reserve currency status. Yet one lesson of the last major economic crisis to hit the world economy – the Global Financial Crisis of 2008 – was that in times of trouble there was still a strong appetite to hold the dollar.

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Policy Measures to Help Growth

The UK economy is recovering. The unlocking will contribute to a significant rebound in coming months. After a swift but severe recession in the first half of the year the economy will likely grow at a solid pace over the second half of the year and at a steady pace in 2021.

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"The Great Lockdown" is how the Internatonal Monetary Fund (IMF) has described it, and it is hard to disagree. On Wednesday the IMF provided their latest update on the world economy.

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Here's How to Fix the UK Economy

The next few months will demonstrate whether Downing Street is on top of the macro-economic agenda. If they are not, then the country is in for a rough ride.

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Today’s economic release – with the UK economy shrinking 20.4% in April – confirms that the economy is in a deep recession. This should focus attention on the policy steps needed to help the economy emerge, both to restore jobs and output in the near term and help reposition the economy in the longer term.

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What will happen to inflation? This is one of the most important economic issues as we emerge from this crisis.

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Is the Covid-19 crisis a Black Wednesday moment for the Government? In September 1992, sterling was forced out of the Exchange Rate Mechanism. The fact that this devaluation was inevitable whoever had won the general election did not matter.

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Six Areas Influencing Markets Now

Our lack of understanding of the coronavirus has added to the challenges confronting politicians and policy makers in recent months, and this in turn has fed the uncertainty impacting financial markets.

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