XxX | Feature Contents Editorial
LOSING CONTROL?
During Easter I had a shock. Like many, I wanted to take advantage of the long week- end by having a change of scenery. My chosen destination was the Cornish coast and I happily set off on Good Friday. The change in my mood came when I pulled into a pet- rol station and was charged £62 for less than half a tank of fuel. The days when I could fill an empty car for £48 are now a distant memory.
There was another surprise when I reached the town where I was staying. I popped for some lunch and was happy to discover that the prices were similar to the last time I vis- ited during the summer. However, when my food arrived it was clear that I was getting less bang for my buck than I did eight months ago. This should not have been a surprise. Inflation reached 7% in March, up from 6.2% in February – the largest monthly rise since the Office for National Statistics started keep- ing records in the late 1980s.
The cost of goods and services has been rising for some time and while I understand that supply chains were disrupted during the pandemic and there is a war in Ukraine, why hasn’t someone taken steps to slow the rate of growth? That someone is the central bank. Raising interest rates is seen as the main tool to stop inflation but despite initial hikes, inflation continues to reach heights not seen for dec- ades. We featured inflation in this magazine when things were getting a little hot, but now that they are scorching we are re-visiting the topic to discover if central banks have lost control. Find out from page 16. Inflation’s impact is felt first in commodities, the raw materials the world needs such as oil, metals and wheat. However, with two of the world’s largest commodity exporters at war, what could it mean for UK institutional investors? We take a look at the implications of Putin’s war from page 34.
The invasion has seen almost half of investors with exposure to Russia start to dump these assets, but should this apply to other emerging markets? Many have been hit hard by Covid and inflation, while China is having its problems. We look at emerging mar- kets in a feature and a roundtable discussion to discover if investors should think twice before exiting. Our 14-page coverage of these markets starts on page 38. For some relief away from inflation, we look at the circular economy and the innovative ways investors can reduce the amount of waste the world produces. Read how from page 24. Finally, we sit down with Brian Kilpatrick, chief investment officer of the HSBC Pen- sion Scheme, who shares his plans to decarbonise almost £40bn of assets (pages 12-15).
Mark Dunne Editor
m.dunne@portfolio-institutional.co.uk Issue 113 | May 2022 | portfolio institutional | 3
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