Royal London Asset Management

Spain has come a long way in 50 years – from authoritarian rule under General Franco to a forward looking and prosperous democracy.

The UK General Election went mostly to script but there were important takeaways. First, Labour won a huge majority but with a surprisingly low share of the popular vote. Second, the right-of-centre parties will start to realign, given the rout of the Conservative Party. Third, the two-party system is over. Voters will see that other parties can do well despite the electoral system.

The depressing thing about last week is that daylight hours are now shortening, having passed the summer solstice on Thursday. This event coincided with parts of Stonehenge being coated in orange powder paint as Just Stop Oil protesters targeted the site.

Am I turning into Victor Meldrew? Last week I found myself telling people how to queue properly for a taxi and I was surprised how direct I was. My wife, who was with me, made the observation (unhelpfully) that I was starting to resemble the grumpy character from the TV series 'One Foot in the Grave'. Perhaps it comes with age, as some inhibitions fall away and the inner character appears.

The surprise announcement of a general election drowned out other developments last week. It is a gamble for a governing party to test its popularity when opinion polls suggest a 20-point deficit.

There is a programme on TV called 'Race Across the World'. I would recommend it on three levels.

Federal Reserve (Fed) watching was the main focus of markets last week. As expected, there was no interest rate change.

The US economy grew at a slower rate than expected in the first quarter, at an annualised 1.6%. Investors reacted by pushing down yields as they focused on the shortfall. However, two opposing forces drove 10-year yields above 4.7%.

The US labour market showed another strong performance, with non-farm payrolls increasing by over 300,000 in March, building on the February outturn and ahead of the consensus expectation of 215,000.

The University Boat race, dating back to 1829, is a strange sporting event. Competed by the same two universities each year, with crews now drawn from all over the world, it attracts large crowds to the banks of the River Thames in southwest London.

An article on the growth of passive investment caught my attention last week. Despite being an advocate of active management, I can see that there is a role for index investing.

It was not a great week for bond investors as data was generally unhelpful. US February Consumer Price Inflation print came in line with expectations at 0.4% but the core measure was 0.1% above consensus and Bloomberg’s calculation of super-core was higher still at 0.5%, indicating a higher underlying inflation pressure.

UK budgets are not what they used to be. Widely leaked, there were few surprises, enlivened by a bit of ‘Red Wall’ constituency bingo, with call outs for a range of Conservative MPs, and some tax baiting of Labour MPs.

Events at the Post Office have challenged the dictum that there is no such thing as bad publicity.

I remember writing in one of my previous journal entries how cheap our food was. And, despite recent inflation, the British continue to benefit from this – and indeed, take it for granted.

My city career has solely been at Royal London Asset Management but over those 39 years I have seen considerable evolution and development.

Last week, a headline mentioned the increase in use of lunchboxes, with 86 million more taken to work and school than the year before. This was attributed to the cost of living crisis but I think health factors are also contributing.

Markets are feeling more normal, after the holiday lull. The major economic focus was last Friday’s jobs data, where the headline showed an above consensus gain in non-farm payrolls and stronger than expected average hourly earnings.