The writer is president of Queens’ College, Cambridge, and an adviser to Allianz and Gramercy
Inflation was the dominant economic and financial issue of 2022 for most countries around the world, particularly for those advanced economies that have consequential impact on the global economy and markets.
The effects were felt in worsening living standards, higher inequality, increased borrowing costs, stock and bond market losses and the occasional financial accident (fortunately small and contained until now).
In this new year, recession, actual and feared, has joined inflation in the driver seat of the global economy and is likely to displace it. It’s an evolution that makes the global economy and investment portfolios subject to a wider range of potential outcomes — something that a growing number of bond investors seem to realise more than many equity counterparts.
The IMF is likely to soon…