Europe

Inflation Pressures Central Banks to Begin Normalizing Policies

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This week, the Federal Reserve, the Bank of England, and to a lesser extent the European Central Bank all acted to tighten monetary policies. These tightenings came as inflationary pressures have surged in many countries and as other central banks have looked to rein in simulative policies. But, when combined with above-trend growth expectations next year and central banks’ likely cautious tightening approach, we suspect financial conditions will likely remain accommodative and supportive of risk assets.

Decades of Data: Europe ex UK 1900–2020

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The 2020 Europe ex UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.

Decades of Data: United Kingdom 1900–2020

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The 2020 UK edition of our annual report on the history of financial markets provides context for the range of returns investors can expect from equities, bonds, and cash; reveals the importance of various components of equity returns; examines the evidence for equity mean reversion; and reviews the relationship between initial valuations and subsequent returns for equities and bonds. It also analyzes the historic economic declines and sharp asset price movements that resulted from the COVID-19 pandemic in 2020.

Brexit Update

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The historic milestone reached when the white smoke emerged from Brussels and London on 24 December 2020 represents the end of the beginning in the establishment of the new relationship between the UK and EU, rather than an end in itself. Nonetheless, with the lingering threat of a tumultuous no-deal exit now removed, the headwind that this represented to the performance of UK assets has now subsided.

Decades of Data: 1900–2019

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As the current market environment continues to rapidly evolve, we remind investors that reviewing the history of business cycles, returns, and valuations can help provide a framework for understanding the market today. Our 2019 edition of Decades of Data presents historical analysis on economic indicators, equity, fixed income, and cash markets across eight geographies over the very long term.