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General Economic Overview – Quarter 1 2021
In the first month of a new year it is relatively common for markets to follow the momentum of the previous year, and 2021 followed this trend. All this quickly changed after the holiday period was over.

The end of 2020 saw a significant recovery in markets over the year, with rising optimism on economic growth as vaccines were being rolled out, and confidence that the new year would bring back some normality. This confidence quickly retreated as we fell back into more lockdowns across the globe as
case rates and death rates increased, particularly in the UK where infection rates spiralled much higher. Another lockdown increased pessimism about the economy, although this was offset by the longer-term faith in the vaccine roll-out. By the end of quarter one an unexpected transformation had taken place
as global growth expectations significantly improved, certainly in the UK and the US, as well as in Asia and China. This was led by the effectiveness of the vaccine roll-outs in these countries and by the supporting fiscal packages and monetary easing. At the same time this transformation led markets to challenge the low growth low inflation mantra that we have been observing for some time.

The first quarter was then defined by the volatility in bond markets as they challenged the levels of yields that had been stable for much of 2020 pushing close to the previous highs of 2018. Whilst inflation has been kept on the back burner for much of the last three years it has now moved to front and centre in the economic debate.

Please be aware that this material is for information purposes only and is supplied by Rayner Spencer Mills Research, an independent research consultancy. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, Rayner Spencer Mills Research own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all-inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. Neither Equim Wealth Management Limited or Rayner Spencer Mills Research accepts any legal responsibility or liability for any matter or opinion expressed in this material.