Brexit and the £ pound
Theresa May has thrown down the gauntlet to the EU and has now backed away from the table. The biggest loser from this has been the pound, which fell sharply on the increased chance of a no-deal.
However, large multinational companies within your portfolio will see the benefit to this fall, as their overseas profits are now stronger in UK currency.
Trade tariff on Chinese imports
President Trump followed through on his threat to tariff a further $200bn worth of Chinese imports, and while the rate of 10% was less than expected, it still riled China enough for it to call off trade talks scheduled for September. The added barriers to international trade are undoubtedly unhelpful to economies reliant on trade, such as many Emerging Markets, which have been sluggish performers so far in 2018.
Rise of inflation and oil prices
One to watch over the medium term are US and UK inflation rates, which are both starting to creep up.
UK yearly inflation hit 2.7% in September as transport and fuel costs pushed up prices. The recent rise in the oil price to over $80 a barrel, coupled with the strength of the USD and weakness in GBP could lead to increases in costs for manufacturers which may mean higher prices passed onto consumers.
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