Market Update - January 2022

Welcome to the January update from Beaumont Wealth. 

I hope that you and your families enjoyed the festivities and had a fantastic New Year. 

At the end of such a busy year, I have taken some time to reflect on what an extraordinary time it was, for our clients, our sector and our team.  

It was a challenging year on many levels, but also one of continued successes for the team at Beaumont Wealth. As we welcome a new year, I am grateful for the fantastic team around me supporting our valued clients. It has been a year of growth at Beaumont Wealth, with the expansion of our Chester office and recruiting more dedicated advisers with growing ambitions and continuing to achieve the highest standards in their professional certifications too. 

Robust growth 

Looking ahead, while 2022 it will undoubtedly be a year of consolidation, growth and change globally, this will present risks and huge opportunities. One topic that will continue to dominate the financial direction is inflation. 

As I touched on in our October update, while we do not have a crystal ball, we do have many years’ experience of facing these challenges, whatever interest rate changes may bring and how to make the best-informed choices for your investments. 

Many institutions are predicting strong growth and declining inflationary pressure in 2022. Citi have said, “We see lower growth and inflation momentum next year, globally. However, although a sharp slowdown from 2021, the world economy will still enjoy a growth rate of around 4.2%—that should be considered exceptionally strong against a background where average global growth over the past 30 years has been close to 3.5%.” 

With inflation (CPI) set to rise to 4% over the next year, and increased borrowing seen in recent months, the spectre of a cost-of-living crisis is a very real danger to the Government’s plans and may force the Bank of England’s hand on a second rate increase. It is vital to remember that any sustained increases may be brought into force to manage inflation. As the world moves on from the pandemic, we can anticipate that inflation may ease along with supply chain pressures.  

Supporting you in the extraordinary 

Global economic growth looks set to be above trend again in 2022 at 4.3%. As social distancing rules are relaxed further, consumption of services such as restaurants or travel should pick up, supporting the services part of the economy. Strong goods demand should result in an increase in production once supply chain problems start to ease. Ultimately, we believe this will produce a strong cyclical recovery, a return of global mobility, and strong growth in consumer and corporate spending. 

But in this critical environment, proper diversification and active management remain key to improving portfolio performance: The uncertainty means that it continues to be hugely important for us to continue to monitor this situation to provide the best possible expert advice on your investments. 

Is this the year you will write that novel? Sell your business? Plan your pension? Give more to charity? Whatever your financial resolutions may be in 2022, we are here to help you achieve your goals. Please do not hesitate to get in touch if you require any further information or advice. Undoubtedly, there is much to look forward to.  

Wishing you and your family a wonderful 2022. 

Mark Evans