Quarterly Review

Signals of growth

David Wheildon / April 2021

Everyone is looking for signs of change, says David Wheildon, and here in the UK the new season in our gardens feels like cautious signs of hope for many, with aspects of pandemic life at last beginning opening up. It’s reflected in the markets, he thinks, but care and innovation will have to define our route to new stabilities – and opportunities.

pring is in the air and I don’t mean just the weather. One of the major successes of the whole Coronavirus pandemic has been the speed of the vaccination roll out in the UK and, as I write this, over half of the UK adults have now had at least one vaccination with the number of those having received the second vaccination also rising rapidly. Despite concerns over potential side effects, the take up of the vaccines is impressive and will help to control (but not eradicate) the virus in the coming months and years.

The relaxation of the lockdown provisions is well under way with the next step change due in a couple of weeks and, although this is great news for the economy, we must be wary of the inevitable rise in infections. The vaccinations are not an absolute cure for the virus, they simply reduce the chances of infection and the chances of a severe reaction to the virus if infected. The management of the infections has been driven by a desire for the NHS not to be overrun and there is a school of thought which suggest the NHS can cope with the inevitable increase in infections once approximately two thirds of the population have been vaccinated.

In essence the vaccination program is good news and will help us out of lockdown but we will maintain some form of compulsory (and in the long run, probably self-imposed) social distancing.




As a result of the success of the vaccination program, businesses in general are feeling more confident. Of course, there are exceptions (particularly the travel industry) that have not felt the benefit of any relaxation of lockdown provisions but in general businesses have worked out a way to cope in the current commercial climate and are looking forward to a greater turnover in the coming weeks and months. This has been reflected in an increase in values, which in the short term, may be overblown but does reflect a growing sense of cautious optimism. There will still be many issues to deal with in the coming months, and there will be a number of very difficult moments, but the longer term outlook continues to look promising.

Global interest rates are unlikely to rise for some time, President Biden’s spending plans are almost eye watering in their levels of ambition and China has signed a free trade agreement with most of Asia; all of these point towards an uptick in economic activity.

Although there have been significant losers in the lockdowns affecting the Western economies, there has also been a build up of demand which markets expect to be unleashed over the coming months. All these factors suggest that the medium term economic outlook seems more positive than negative and despite the probable troubles through the rest of 2021 we could do well in the coming years.

Should these predictions prove correct we will need to keep a close eye on inflation, however. If it is allowed to run a little, then this will help increase the value of shares and property and reduce the real value of debt – but letting inflation run away with itself is a dangerous game. Those of us “experienced” enough will remember the 1970s, when inflation in the UK escaped control and the difficulties associated with bringing it to book. We definitely do not wish to revisit those times and Central Banks will be very careful to maintain a high degree of control. We can only hope that they do indeed do so and will take action with the portfolios if we feel there is any danger from inflation in the medium term.



At TLB all is well and we are functioning smoothly within the continuing office social distancing protocols. In the last few months we have taken on two new people in our administration and paraplanning departments as our controlled expansion plans continue. A number of our people continue to work from home and like all business we are reviewing the amount of time individuals need to spend in the office. It’s likely that in
the fullness of time we will move to a blended position with people working from both home and the office. We see this reflected across many sectors of the commercial world and, in discussions with the fund managers, they talk about a number of investment opportunities that they’ve identified as a result of likely new ways of working for most firms.

Innovation and imagination are required to succeed and there are many firms looking for investment to fulfil their potential. Although the wider world will create some volatility, these factors together with a more positive outlook provide the hope for some solid investment returns in
the coming times.

This article is the opinion of David Wheildon,
Director of The Legal Brokerage.

This article is the opinion of David Wheildon