Han de Jong

For the stock market, inflation dynamics remain crucial. These ultimately determine the level of interest rates required to bring inflation under control. The higher the required interest rate, the greater the risk of recession and the smaller the corporate profits. High interest rates are also bad for stock valuation levels. However, some companies have managed to increase their profit margins with high inflation, as we noticed last year.

In an earlier column here I defended Liz Truss. I expressed support not so much for the content of her policies as for their intention. Truss wanted to promote the growth capacity of the UK economy and ensure that working would pay more. My support for Truss went completely against the consensus as virtually everyone I heard about her was scathing.