The UK’s snap General Election will be one of the most significant on record. At stake is restoring the UK's reputation for political competency. It will be required to address the massive challenge on the economic horizon: the threat of galloping wage demands and stagflation while trying to repair Broken Britain.
Is inflation dead or just resting? Are rates likely to remain higher for longer, or are we poised on the edge of a bond bull market? Everyone is watching energy and tensions around the Middle East. I suggest we worry about wages as well.
The Bank and The Fed have served notice they will remain vigilant – higher for longer! Markets would be wrong to expect early easing. Wage Inflation and Energy remain very real threats over the medium term – it may trigger volatility as markets understand the new reality.
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