The following article is an opinion piece by Ian Chesham, a Director in our Charities team, ahead of October’s Charity Finance Summit. Please note: The article does not constitute investment advice.
The tail-end of the pandemic shows just how far we’ve come since COVID-19 first erupted around the world. However, it also brings new challenges with it that require a different approach.
Having caused peak panic in financial markets in early 2020, the fast-spreading virus triggered a central bank spending spree on a scale never before seen. One IMF estimate puts total spending at $16 trillion, after policy makers collectively rushed to keep the global economy afloat.
If quantity was the saviour at the start of the pandemic, it’s delicacy that many investors now think should be top of the list. Central banks need to juggle how to reign back spending, with keeping the economic recovery on track. Front-and-centre of their thoughts, is the re-emergence of inflation after a near decade-long absence.
Up, up and away?
The ‘coiled spring’ analogy is perhaps a good one when reflecting on the aftermath of widespread lockdowns. With nowhere to go, consumers accumulated excess savings of nearly $5.4 trillion, according to credit rating agency Moody's.
