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Status quo update and thoughts on inflation

Status quo update and thoughts on inflation

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I don’t know about you, but I think this summer has been rather forgettable from a weather point of view. There were a few nice weeks, but mainly the view out of my window has been grey rather than blue sky.

The team here at Gibson Lamb continues to take a cautious approach to the lifting of lockdown. I tend to be in the office every day, but usually on my own. Emma and Vicky are working from home, although we’ve recently stopped calling it that. It’s just working.  It really doesn’t matter if we’re at home or the office anymore – it’s all the same.

We aim to meet up in person once a week, although we’re avoiding the three of us being in the same room all day given it’s a pretty small office. 

We’ve tentatively dipped our toe back into face-to-face client meetings – oh how I missed the M25! We remain conscious of the prevalence of the Delta virus so we’re not rushing in at full speed because it seems prudent to continue to treat the virus with respect, despite being vaccinated.

Turning to investment markets, 2021 has seen sensational investment returns especially since the early part of the summer. A typical Level 3 (moderate) portfolio has grown around 7% this calendar year and is around 12% higher now than it was BEFORE markets crashed in February 2020.

Inflation remains a concern because there’s not a lot to be gained from strong investment returns if the cost of living increases just as fast. The official UK ‘CPI’ inflation rate is just 2.1% (source: ONS) but it feels higher to me. We’ve got some EasyJet vouchers left over from a cancelled flight in 2020. Looking at their website over the weekend, the same flight in 2022 is currently half as much again. Perhaps travel isn’t the best example, but food definitely costs more and working from home has resulted in higher utility bills too. I’m sure you’ve seen the news stories about the huge rise in the cost of shipping goods from the Far East now too and the pending toy shortage for Christmas!

The US is reporting inflation around 5% but the reports I’ve read seem to think this is a temporary situation reflecting the unusual events of the last 18 months or so. 

The truth is nobody really knows what will happen next to investment markets or inflation. What I would say though is if you are thinking of taking a withdrawal from your portfolio, now might be a really good time to do so. 

Finally, it will not have escaped your notice that we’re big fans of investing responsibly and acting responsibly. We are very proud of what we’ve managed to achieve over the last few years, so much so that we had a bit of fun with our website designers and created the first Gibson Lamb animation. We hope you enjoy watching it!

Watch the animation