Are we learning the wrong lesson from the mini budget crisis?
Commenting on the Autumn Statement, head of multi asset Trevor Greetham said:
"Are we in danger of learning the wrong lesson from the mini budget crisis? September’s gilt market meltdown was caused by a policy tug-of-war, with proposed tax cuts working against the Bank of England as they raised rates to counter double-digit inflation. Gilt yields have since dropped sharply, but the prospect of significantly tighter fiscal policy, as high interest rates take effect, risks a long recession, with knock on damage to real consumer incomes, property markets and domestically-focused stocks.
"The best way to deal with a high debt burden is to grow your way out of it. Public investment should be protected and the government should explore ways to improve the UK’s woeful export performance."
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About Royal London Asset Management (RLAM):
Established in 1988, Royal London Asset Management (RLAM) is one of the UK's leading fund management companies, providing investment management solutions to both wholesale and institutional clients such as not-for-profit organisations, local authorities and the insurance sector.
RLAM manages £150 billion of assets as at 30 June 2022. It invests in all major asset classes including UK and overseas equities, government bonds, investment grade and high yield corporate bonds, property and cash.
For professional clients only, not suitable for retail investors.
Issued August 2022 by Royal London Asset Management Limited, registered in England and Wales number 2244297; authorised and regulated by the Financial Conduct Authority. Registered Office: 55 Gracechurch Street, London, EC3V 0RL.
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