The current market is concerned inflation may pick up as a consequence of the policy decisions thus far taken in an attempt to stimulate the OECD economies.
Should this materialise, it has the potential to act as a catalyst for the market to separate businesses into two categories – those with genuine pricing power and the capacity to sustain their economics amid an inflationary environment versus those unable to effectively pass on rising costs and where profitability is likely to suffer as a consequence. There is the prospect for economic growth to surprise in developed markets and this may lead investors to look again at allocating capital in these areas versus economies where robust economic growth is well discounted. We see the oppor...
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