Tomorrow happens to be Canada Day, which celebrates the 1867 unification of Canada, Nova Scotia and New Brunswick into what we now know as Canada. I have just returned from a trip to Canada, attending a number of conferences and meetings with our group clients and colleagues. It was my first visit to the country and, perhaps most surprisingly to me, was the difference in the prevailing political environment.
Since Donald Trump’s election as President of the United States in November last year, both interest rates and inflation have been trending upwards. Recently, the US Federal Reserve (Fed) raised rates by a further 0.25%, whilst in the UK inflation came in at a higher-than-expected 2.9%. Typically, this environment is deemed to be detrimental to fixed income investors. However, we believe that a global, active approach can negate much of this risk.
The UK earlier this month unveiled its first Budget since the public’s vote to leave the EU last year. It was a largely uneventful statement, with many of the planned initiatives telegraphed to the press well ahead of the day. In fact, the most controversial element of the Budget was the plan to increase national insurance contributions for the self-employed, a move embarrassingly ditched just a few days later.