Interest rates and inflation have been on a downward trajectory since the late 80s, a 30 year trend. Paul Moore says 2016 was an inflection point and expects inflation to return. For the majority of investors this represents unchartered territory, so how do you approach such a foreign outlook?

People need to start thinking differently about their investment ideas and where there’s likely to be opportunities to put your capital. It’s going to be very different from the 30 years we’ve seen

Key Points

• Inflation rates and interest rates have now been declining for 30 years, there are very few managers that have invested in a sustained period of inflation
• Moore does believe that interest rates and inflation have bottomed, he also thinks that the official numbers are not reflective of the true underlying levels of inflation, “we suspect it’s a little tighter than people realise”
• While inflation is unlikely to spike in the short term it is emerging
• Investors need to start thinking differently about their investment ideas and where there is likely to be opportunities to put your capital. It’s going to be very different to the past 30 years that we’ve seen
• Don’t underestimate how far some asset classes, such as property, have come
• Over the next 10 years interest rates are likely to be quite different to what we’ve become accustomed to over the past 5 years

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