Industry argues stagflation fears based on misnomer

Spectre of stagflation seems unlikely

Lauren Mason
clock • 3 min read

The “nightmare scenario” of stagflation rearing its head is less likely than many investors think, according to investment professionals, who say the current backdrop is not comparable to the last prolonged period of stagflation during the 1970s and early 1980s.

However, they warn that expectations for stagflation could lead to a "significant reversal" across nominal bond and equity markets. Stagflation, when economic growth slows and unemployment increases while inflation ticks higher, creates a tough environment for investors, given consumer spending slows, companies' earnings fall and unemployment continues rising.  UK recovery to 'remain bumpy': Industry reacts to 0.1% GDP increase It is a difficult cycle to break, as evidenced between 1973 and 1982, when the oil embargo of 1973 hit prices and first challenged the seemingly stable inve...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on Markets

Nick Train eyes new investments as he praises Rightmove for rejecting REA takeover bid

Nick Train eyes new investments as he praises Rightmove for rejecting REA takeover bid

'Tactical opportunities'

Linus Uhlig
clock 18 November 2024 • 2 min read
Rachel Reeves commits to establishing PISCES framework by May 2025 in Mansion House speech

Rachel Reeves commits to establishing PISCES framework by May 2025 in Mansion House speech

'World-first' framework

Linus Uhlig
clock 14 November 2024 • 4 min read
Event Voice: Your Questions Answered by Baillie Gifford at the Investment Week Leaders Summit

Event Voice: Your Questions Answered by Baillie Gifford at the Investment Week Leaders Summit

Partner Content - Baillie Gifford sponsor of the Investment Week Leaders Summit. Rachael Callaghan looks into AI and market dynamics.

Rachael Callaghan, Investment Specialist, Baillie Gifford
clock 14 November 2024 • 3 min read
Trustpilot