Knowledge and Insight - Economy

Our 10th anniversary edition of Investment Insights leads with a hopeful note, looking at why we believe stronger foundations are being laid for a broad, sustainable recovery in stock markets.

A resilient economy is giving investors increased confidence to move beyond the Magnificent Seven and into corners of the market that have lagged. This broadening trend is very encouraging.

Will it be a case of the tortoise versus the hare, with last year’s winners taking a breather while the laggards catch up?

After the flurry of central bank decisions last week, what did we learn about when (and how much) the big hitters plan to cut rates?

In his latest video update, Rathbones’ co-chief investment officer Ed Smith notes the need to focus on quality as equity gains widen out, while bonds look attractive as inflation slows.

In a wave of central bank meetings this week, one of them is truly different. While all other developed world policymakers are pondering rate cuts, only Japan is considering rate hikes.

Problems with UK labour surveys are making it hard to know the true rate of unemployment. Meanwhile, the Chancellor releases a tax-cutting Budget that leaves the next government with tough choices.

With the shadow of a general election looming over the government, chancellor jeremy hunt announced another reduction in the headline rate of national insurance (of two percentage points) in a bid to shore up his party’s flagging support. But that cut will do little to change the near-term economic outlook, and the work of dealing with the bigger structural problems facing the uk economy has largely been left until after the election.

The Chancellor hopes to narrow Labour’s yawning lead in opinion polls with a tax-cutting Budget. Giveaways may be stymied by a poor economy and higher costs of public services.

Obstructive planning laws are curtailing the supply of homes in the UK, the regulator says. Meanwhile, the quality of building is slipping, suggesting we’re wrapped up in the wrong red tape.

The UK slumps into recession even as people’s spirits and retail sales rise. Meanwhile, trouble may be brewing in American inflation.

Developed market equities have continued to perform well in the first few weeks of 2024. In part, this is commensurate with the improvement in some leading indicators of the economy, pointing towards a less challenging environment for corporate profits ahead. Edward Smith, our Co-CIO of Rathbones Investment Management, explores what this means for our investment strategy.