Editor's letter: Feeling the squeeze

"Completely different" to 1970s and 80s

During the second half of last year, the term ‘stagflation’ reared its head among the asset management industry for the first time in decades, as investors feared a torrid combination of slowing economic growth, rising unemployment and prolonged inflation.

Many believed the threat of stagflation was a misnomer, however, with LFDE CIO Olivier de Berranger telling Investment Week in October last year that the backdrop was "completely different" from when we last suffered stagflation in the 1970s and 1980s.  "Inflation has been caused by this strong demand in an environment of temporary supply constraints in the aftermath of the Covid-19 crisis. And global economic growth is forecast at 4.5% for 2022, after close to 6% this year, which hardly qualifies as stagnation," he said.  In the same article, Royal London AM's head of rates and cash ...