Liontrust Views Winter 2023 - Flipbook - Page 10
FINDING
FINDING
INVESTMENT
INVESTMENT
OPPORTUNITIES
OPPORTUNITIES
IN
IN 2023
2023
Investors could be forgiven for suffering cold feet in 2022 as markets
were hit by a seemingly relentless chain of negative events, from the
war in Ukraine to soaring inflation and global supply chain issues.
Unsurprisingly, this ‘perfect storm’ saw
returns on both global equities and bonds
fall significantly throughout the year. But
2023 is a new beginning and could
provide an opportunity to reset your
investment approach.
by the government in October, which lasts
until April 2024, should help to keep down
the level at which energy costs rise this year.
Supply chain disruptions which pushed up
food and services costs in 2022 are also
showing signs of easing.
Let’s take a look at some of the key drivers
which negatively affected market returns in
2022 and consider what the likely impacts
might be in the months ahead.
In fact, the latest figures show that inflation
is falling, with inflation of 9.6% recorded
in December. Expectations for inflation in
2023 are around 3% to 4% – some way
off the Bank of England’s inflation target of
2% but notably more favourable than levels
seen in 2022.
JOHN HUSSELBEE
Head of the Liontrust Multi-Asset
Investment team
Inflation
Inflation reached a 41-year high of 11.1% in
late 2022, fuelled by the rising cost of food
and transport, as well as soaring energy
prices which were driven in large part by the
war in Ukraine.
However, the energy price cap put in place
10
LIONTRUST VIEWS – WINTER
Interest rates
A continued decline in inflation would also
help to keep interest rates down. This is
because central banks would be less likely
to raise interest rates aggressively to tackle