“…distress in financial markets left many investors fearful of another recession and systemic crisis like 2008/09. We are very firmly of the belief that this is not the case and the fears are overdone. The global economy has softened but is still growing and the US, UK, Europe and Japan should continue to grow modestly through 2016. Central banks have become more accommodating and have made it clear that they will take further action to prevent economies falling into a deflationary spiral. There seems to be no prospect of any significant rate rise for several years ahead, certainly in Europe, the UK and Japan, and quite probably now in the US, so we continue to live in a near zero (or negative) interest rate world.
The fall in energy and other commodity prices, which to date has had a material negative impact on the global economy, will begin to show through in higher consumer incomes and spending as the year progresses. Employment growth has been strong in the US and UK and is improving in Europe and Japan; yet wage rises remain subdued and inflation is unlikely to become a concern for central banks in the year ahead…”