25 November 2020

Spending review: a positive outlook for equities, property and commodities

4 min read

Margherita Orlandini, Corporate PR Manager, Royal London
Margherita Orlandini

Corporate PR Manager, Royal London


Following the Chancellor’s spending review today, Trevor Greetham, head of multi asset at Royal London Asset Management (RLAM) comments:

“We’re left with the impression that we are going to see permanently higher debt levels, continued financial repression with interest rates kept artificially low and a higher trend in inflation. For investors this means persistently low interest rates and a positive outlook for assets like equities, property and commodities which have a good track record in beating inflation over the long run.

“While gilt yields are below the rate of inflation there is no real cost in letting national debt levels rise. We’ve breached 100% debt to GDP, but Japan’s debt ratio stands at more than 200% with no ill effects.

“It is already set to be difficult to grow our way out of debt with Brexit set to drag on the economy by 5 to 8% over the next fifteen years, according to the November 2018 Treasury impact assessment. The long term impact of the Covid crisis is expected to be smaller, around the 2% mark, as a post-Covid recovery will restore much of the output lost over 2020. A new era of austerity would further hamper growth and could come at a high political cost.”


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 £148 billion of assets and employs 121 investment professionals as at 31 December 2020. 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 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.

For press releases about RLAM please click here.

For further information please contact:

Margherita Orlandini, Corporate PR Manager, Royal London