Portfolio Management 

Building the world

Building the world

Despite all the talk of tapering and rate hikes it is unlikely monetary policy will return to what was considered normal, pre-Lehman, any time soon. The problems zero (real) interest rate policies present to investors are obvious. Globally, inflation remains subdued but the low-risk returns on cash and short duration government bonds are still not keeping pace. In the UK, sterling’s undeniable sensitivity to the narrative around Brexit negotiations brings a unique set of inflationary pressures at a time when growth prospects are uncertain. It may be overly pessimistic to predict 1970s style stagflation but the possibility cannot be dismissed and investors need to get ever more creative in sourcing yield.

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