The return of real returns
06 November 2017
2017 is suddenly shaping up to be a very good year for investors. Global growth has picked up, and companies are reporting solid profit numbers as a result. At the same time, low global inflation suggests the world’s major economies are far from overheating, and therefore interest rates need to gradually rise to more normal levels. While the Bank of England hiked rates for the first time in a decade last week, it is unlikely to move much further given the uncertainty around Brexit. Jerome Powell’s appointment as successor to chair of the US Federal Reserve, Janet Yellen, also removes an element of monetary policy uncertainty. Powell is seen as pragmatic and likely to follow Yellen’s gradual and measured approach.