Spending Could Drive Growth

| Multi Asset

Spending Could Drive Growth

Source: Unigestion, Bloomberg, as of 1 July 2021.

Despite the rally in risk assets in the first half of the year, we believe that significant tailwinds remain, although we readily acknowledge the spectre of inflation.

In particular, consumption and investment are lagging the broader recovery and have only recently improved significantly. If they continue their trend, as we expect them to thanks to the ongoing economic reopening, they will provide another sustainable leg of support to the macro recovery. With unemployment elevated, households are holding onto their savings in the meantime and are cash-rich in aggregate, providing a potent source of future demand when their spending normalises.


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