Knowledge and insight

An executive summary of the full inflation report for anyone who would like a brief overview of the key points.

What drives inflation, where it's heading and what it means for investors.

It’s helpful to think of inflation in terms of the old adage, too much money chasing too few goods. But don’t let the simplicity of that statement fool you: the factors that influence the flow of money and the amount of goods (and services) produced are vast, and we have limited our discussion to three broad topics.

A permanent change in the age structure of a population — its demography — can alter patterns of consumption, saving and investment. It can also affect the size of the workforce and its skillset, the rate of productivity growth, and the way in which income is distributed between labour and the owners of land and capital. 

Globalisation has come a long way fast, but the process has slowed. On the basis of the Fraser Institute’s Economic Freedom Index, more than 98% of the world’s population has lived in a capitalist society since 2005, up from just 30% in 1985 (figure 9). 

The elusive relationship between jobs, wages and prices.

If falling dependency ratios and globalisation have eroded workers’ bargaining power in advanced economies, is there still a link between a country’s employment conditions and its rate of inflation?

As we’ve seen, some of the structural forces that shape inflation are shifting in interesting ways. But the balance of evidence does not suggest a significant likelihood of either a profoundly inflationary or profoundly deflationary scenario. We’re sorry if this makes the report a bit of a let-down.

Last week Rathbone Private Office held our second successful Women’s Forum, with great speakers including Jill Hodges from Fire Tech camp, Em

Investors today are paying a relatively high price for domestically focused UK companies compared with their multinational peers, which seems counter-intuitive given Brexit uncertainty. For investors, this divergence is creating both opportunities and challenges, which are the focus of our lead article “Digging below the surface of UK indices".