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  • Silvia Dall’Angelo
    Is the trade war disruptive, or is it merely accelerating trends already underway?
  • Silvia Dall’Angelo
    Sterling has had a rough ride over the last few weeks, hitting a 33-month low – against a trade-weighted basket of currencies – on Tuesday 30th July. Silvia Dall’Angelo, Senior Economist at Hermes Investment Management, looks at the downward pressure on the pound that has been driven by increasing odds of a no-deal Brexit following the installation of the new UK government led by PM Boris Johnson.
  • Silvia Dall’Angelo
    Monetary policy – which did the heavy lifting in the aftermath of the global financial crisis – has reached its limits.
  • Silvia Dall’Angelo
    The outcome of the upcoming European elections on 23-26 May 2019 could have a significant bearing on the eurozone’s ability to tackle the next economic downturn
  • 02/05/2019
    Corporate News
    Silvia Dall’Angelo
    The Bank of England was on hold today, as largely expected, and the MPC unanimously voted to keep policies unchanged.
  • 30/04/2019
    Corporate News
    Silvia Dall’Angelo
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  • Silvia Dall’Angelo
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  • Silvia Dall’Angelo
    Emerging markets contended with a challenging backdrop in 2018, amid less accommodative global financial conditions, slowing economic growth in China and fraught US-China trade relations.
  • Silvia Dall’Angelo
    For all the resounding announcements, catchy slogans and jokes, today’s Budget amounted to little in practical terms. Chancellor Philip Hammond announced “a Budget for Britain’s future” and reiterated that, after almost a decade of spending cuts, fiscal austerity was “coming to an end”, as also suggested by the Prime Minister during the Tory party conference early this month. Alas, it is not happening now, it is only vaguely defined in practical terms, and it is conditional on a good Brexit deal.
  • Silvia Dall’Angelo
    The Bank of England kept policy on hold at today’s meeting, as widely expected. It has nudged up its Q3 GDP expectation, yet, by warning that Brexit uncertainty has increased even since August, the MPC could stay put on rates in the near future, as Brexit negotiations approach a crucial stage – including a soft deadline for a withdrawal deal in mid-November. Yet, the Bank has maintained a mild tightening bias, suggesting that a “gradual and limited” hiking cycle is appropriate under most circumstances going forward. Having increased rates at its August meeting, the Bank is likely to hike once again over the next year, provided Brexit negotiations proceed smoothly. Justifying higher rates has been a sober take on the supply side of the economy: in a context of sluggish potential growth, the limited spare capacity left in the economy is quickly disappearing, and excess demand is building. In order to avoid a last minute overreaction to inflationary pressures likely to emerge down the road, and taking into account the fact that monetary policy works with a lag, the Bank look still to be eyeing around three rate hikes in the next three years. That would take the Bank rate up to their estimate of short-term equilibrium, currently seen between 1.5% and 2%. This equilibrium rate (r*), defined as that needed to keep the economy on an even keel, is expected to rise to 2-3% thereafter. The logic being that faster productivity growth spurs wages, and leveraging continues to pick-up.
  • Silvia Dall’Angelo
    The trade tariffs – and corresponding retaliatory measures – implemented are so far limited. In total, the value of affected trade now amounts to about $150bn globally, or 0.8% of overall world exports. However, adding up all the measures currently under discussion and assuming impacted countries retaliate commensurately, the amount of targeted trade could quickly rise to more than $1tn, or 6% of global exports. In her latest Ahead of the Curve, Silvia Dall’Angelo, Senior Economist at Hermes Investment Management, argues an escalation of protectionist measures evolving into a trade war could represent the biggest challenge to the world economy.
  • Silvia Dall’Angelo
    While Italy’s short-term economic outlook includes some positive elements, material downside risks loom amid high policy uncertainty. In her latest Ahead of the Curve, Silvia Dall’Angelo, Senior Economist at Hermes Investment Management, argues the Italian situation is a symptom of deep-rooted malaise and requires a credible and concerted response. Italy’s recent political imbroglio reignited the debate over the European Union’s (EU) future and the viability of the European single currency within its current institutional framework. While the situation has normalised, the landscape in Italy remains fragile. It is emblematic of the challenges the Eurozone is facing in a new political era. This new political backdrop emphasises national sovereignty, has an inward-looking approach and favours centrifugal forces, posing hurdles to European integration. Effects of the crisis Italy’s double-dip recession – the global financial crisis in 2008, followed by the European Sovereign Debt Crisis in 2012/13 – was particularly severe, as the country was ill-equipped to deal with it in the first place. The typically short-lived political cycle – with 65 administrations at the helm since World War II – has favoured wasteful public spending and quick fixes, rather than long-sighted structural reforms. In this context, public debt grew quickly, thereby reducing the fiscal space available at times of crisis.