Sunak’s premiership spells a rebound for the pound – but recession looms
- 05 mins 52 secs
Jonathan Brown, Fund Manager
Politics had a significant impact on the market once again this quarter, with Rishi Sunak’s government retreating on many of the decisions taken by his predecessor.
The market became more relaxed about the country’s ability to fund itself after many of Liz Truss’ tax cuts and spending increases were reversed. This had a dramatic impact on bond yields, which declined significantly, and the pound rebounded back to its pre-Trussenomic levels.
Meanwhile, economic growth is slowing in the UK and elsewhere, so a recession seems likely. However, we’re hopeful that strong company and household balance sheets, along with full employment, can help limit the severity of the downturn.
If we look at the valuation of equities, the UK market looks very cheap – both compared to its own history and to other major markets. So, although there are currently challenges across the world stage, we believe last year’s fall in markets could present a good opportunity for long-term investors.
In his Q4 video update, Jonathan reflects on the quarter and answers the following questions:
- 00:20 - What were the key events driving the market during the quarter?
- 01:30 - How did the Trust perform over the quarter?
- 03:52 - What changes were made to the portfolio over the quarter?
- 04:34 - How do you see the economy and the market progressing as we start to move through 2023?
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