14 December 2021

The Ghost of Christmas Future

Brian Tora provides insight into investment markets and an outlook for the rest of 2021.


It is the time of the year when the media is full of predictions for the year to come. Probably the last time when pundits felt confident in committing their expectations to paper was two years ago, just before we came to realise what a huge difference coronavirus was about to make to our lives. We have now had two years of living with the pandemic and, while we appear to be establishing some sort of near normality, the future still looks very opaque.

But things do feel a little calmer than when we first started to learn how to deal with Covid. The rise of yet another variation of the coronavirus unsettled investors only briefly, with the initial wave of selling proving to be short lived. Indeed, markets have been more than making up lost ground in recent trading. Perhaps we are all accepting that this pandemic, which is showing little signs of going away, maybe something we will have to cope with for some time to come.

It would be foolish to expect it not to make a difference, though. While the Omicron strain of this virus has yet to make its presence felt in Europe, the fact remains that infections are rising and travel restrictions are once again a feature of governmental restrictions. Also coming into focus are the attitudes to vaccination, which are undoubtedly hardening in the developed world. Compulsory vaccinations are now looking to be a reality in several countries.

Back home, house prices are continuing to rise, with a shortage of properties cited by estate agents as an important contributory cause. November was another bumper month for home owners and the Halifax states that the rate of increase is presently the fastest for fifteen years, though they do not expect this to continue. And with the Bank of England’s decision on interest rates due shortly, speculation is rife that the potential economic impact of Omicron may tip the balance in favour of holding rates lower for longer.

With Christmas just around the corner, the extent to which further measures are deemed necessary to keep the spread of the virus at bay will be exercising minds around the Cabinet table. No-one wants a repeat of last year, but nor will the government wish to place an already stretched NHS under further pressure. Keeping the current level of freedoms would also be good for the economy. Let us hope that the traditional Santa Rally can continue for another year. We could do with some good cheer this Christmas

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