Welcome toEconomic Perspectives

Economic Perspectives is a trusted provider of global macroeconomic and financial research, with clients in North America, Asia and the UK.

EP research weaves complex and diverse information into coherent macro narratives, providing clear analysis and original market insights for global investors. Our clients benefit from our long experience in connecting economic developments with the credit and financial market outlook.

The analysis of developments in global private sector credit markets is fundamental to our understanding of the global economic and financial outlook. However, the actions and interventions of central banks and government have become increasingly important to our economic assessment.

For several years we have maintained that the only credible resolution of the 2008 global credit crisis is a resurgence of global inflation. We take an eclectic approach to the inflation outlook, considering political and socio-economic factors alongside macroeconomic drivers. We provide the multi-dimensional appraisal of the inflation outlook that is critical to formulating a successful investment strategy, at a time when inflation complacency is rife.

We offer different levels of partnerships, from Platinum to Gold to Silver. We also have Bespoke Partners, for whom we undertake specific and exclusive research projects or writing assignments. We aim to offer a unique and flexible service dedicated to meet your standards and requirements.

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At Economic Perspectives, we appreciate that our Research Partners have diverse appetites for thematic insights and research ideas, and differing capacities to engage with our research output. Engagement implies interaction, and we value every opportunity to understand the questions and conundrums that our Research Partners are grappling with. These interactions help to shape our research agenda and hence the content of our publications.

Peter Warburton has worked as an applied economist in London since 1975, graduating from Warwick University with a Masters degree and gaining a doctorate from City University in 1988. He has worked in the academic and financial sectors in a variety of roles and is a frequent guest on radio and television programmes discussing the state of the UK economy. He founded Economic Perspectives in 1996.

He spent 15 years in the City of London as UK economist and economic adviser for the investment bank Robert Fleming and at Lehman Brothers. Previously, he worked as an economic researcher, forecaster and lecturer at the London and Cass Business Schools.

He has been a member of the IEA’s Shadow Monetary Policy Committee since its inception in 1997.

He is the author of Debt and Delusion (create hyperlink to page in publications section), subtitled 'Central Bank follies that threaten economic disaster’, a critical analysis of the uses and abuses of debt in the global financial system, first published in 1999.

He lectures on the Practical History of Financial Markets course, based at Heriot Watt Business School in Edinburgh and teaches occasionally on a postgraduate course at Cardiff Business School.

He has a part-time role as economist at Ruffer LLP, the asset manager, and is managing director of Halkin Services Ltd, an international risk analysis service.

Yvan joined Economic Perspectives as a Research Economist in October 2017. Having been based in London since early 2012, he has first worked for three years as a FX Trader on a global macro desk at Societe Generale and then went to Imperial College where he graduated with MSc and MRes (PhD Program) degrees in Finance. His research interest was mainly focused on defining fair values of currencies and the construction of currency portfolio strategies.

Before that, he graduated with a bachelor’s degree in applied mathematics from Nice, a master’s degree in quantitative economics from Sorbonne University and worked as a quantitative analyst at Natixis Asset management in Paris.

Graeme joined Economic Perspectives in March 2015 having recently returned from a year and a half in Singapore.

In his 15 years working as a professional economist, he has enjoyed previous positons at London South Bank University (LSBU) , Reading University, Centre for International Macroeconomics based at Oxford University and the Office for National Statistics (ONS).

Outside of work Graeme enjoys running and being exercised by his three dogs!

Tom Traill joined Economic Perspectives in October 2013. He works on all the global publications, as well as the North American and UK Economic Perspectives. He has worked previously for the Trade Policy Research Centre and did an academic internship at the Institute of Economic Affairs where he researched corporation tax. He has a degree in Business Economics from the University of Buckingham.

Liseth joined Economic Perspectives in August 2017. She contributes to several publications with a focus on Inflation and Credit Perspectives. She has worked previously in the financial sector and as an economic advisor for the Colombian Trade Association. Liseth is an economist with an MSc in Investment and Finance from Queen Mary University of London.

Amy joined our team in June 2015 and is responsible for a number of areas, including a strategic development role.

She has a degree in Criminology and has a number of different work experiences.

Anne has fulfilled many roles at Economic Perspectives since it was formed in 1996, taking on HR responsibilities from 2010. Anne has a degree in librarianship.

Amy joined Economic Perspectives in June 2015 and is responsible for a number of areas, including a strategic development role. She has a degree in Criminology and has a number of different work experiences.

Sylwia joined Economic Perspectives in June 2010, initially for a special summer project which involved organising the company's research material. She became a full-time team member in September 2010, and is responsible for team administration and acts as a research assistant, preparing data, charts and sourcing articles for the economists.

Prior to joining Economic Perspectives, she was a Clerical Assistant in the Income Tax Department in the Tax Office in Hrubieszow and achieved a Bachelor degree in Accounting and Finance at the College of Entrepreneurship and Administration in Lublin.

Lesley is a Member of the Chartered Institute of Personnel & Development and a qualified coach. She has substantial experience in an HR capacity including policy and strategy development and enjoys working with a wide range of professional groups.

Lesley specialises in learning interventions to support leaders and leadership teams in developing effective skills to navigate their way through the constancy of change. She encourages new wave thinking; personal effectiveness and professional development.

Ruth provides administrative assistance to Economic Perspectives and has had an interesting career embracing different roles in a wide range of companies.

Deborah is an experienced accounting professional operating through her own company which provides bookkeeping, accounts and payroll assistance to its clients.

Deborah’s considerable skills and knowledge of working within owner-managed businesses make her a valuable member of the accounts and financial management team here at EPL.

Lucie joined us in April 2016. She has a background in sales and marketing. She holds a degree from Lancaster University in Comparative Religious Studies.

Team members bio

LatestFrom Our Blog

LatestGlobal Themes

The US Fed’s policy climbdown, in the wake of disturbing Q4 data and plunging equity prices, chimes with evidence of nominal GDP deceleration, yet a 3.2 per cent annualised print for real growth in Q1 suggests that the FOMC must soon tack in a hawkish direction. With little sign of wage bill deceleration, there is a clear inference that corporate profitability is in retreat.  We contend that there are strong implications to be drawn from the weakening profits outlook for the approach of the next credit default cycle. 

We imagine that the US Fed is feeling pleased with itself for torpedoing the belly of the Treasury curve, such that 5-year yields have dipped below 2 per cent. Federal Reserve holdings of Treasuries have been replaced by US commercial bank holdings as the banks run out of profitable lending opportunities. However, this is likely to prove a Pyrrhic victory as China devises a comprehensive retaliatory strategy designed inflict pain on the US economy and US financial assets.

The escalation of the tariff war risks the postponement or cancellation of corporate spending on which the ongoing US expansion depends. It has also triggered supply chain disruption and violent inventory corrections the world over, complicating further the interpretation of data.

The Fed’s actions since the start of 2019 represent a retreat into financial repression, rather than a prudent reaction to the effects of tariff escalation. The private sector response to an interest rate reduction is likely to be very muted and fearful of what lies ahead.  



2019 Winning Insights From Economic Perspectives

Click here to view the pdf.

 

LatestMedia

 

Listen to Peter Warburton's podcast Plunge protection

“This is not the time to allow concerns about the size of the federal deficit to hinder the scale of response to combat Covid-19”. Words from Jay Powell that seem perfectly reasonable in today’s dire circumstances, but which will be extremely difficult to revoke even “when the (US) economy is well on the road to recovery”. Welcome to the age of fiscal dominance. Under the cover of plunge protection, a policy revolution is underway that will reorder priorities and programmes for a generation. The Fed is content to be handmaiden to the Administration in these extraordinary times but will soon discover that this is a permanent position.

Governments and central banks around the world are battling to prevent the Covid-19 emergency turning into a second Great Depression. This will require government guarantees on an epic scale. Failure in this endeavour would consign the world to unthinkable misery and economic and social chaos stretching out years; to succeed, would entail a rapid, if incomplete, recovery accompanied by rampant inflation. Unanticipated inflation is the essential second act of financial repression.

 

LatestMedia

 

Listen to Peter Warburton's podcast The enemy within 

“There is nothing fundamentally wrong with our economy. Quite the contrary, we are starting from a very strong position.” Sad to say, but Jay Powell just doesn’t get it. Covid-19 is merely the trigger event that has exposed the fragility and insecurity of the financial, economic and social systems of proud western democracies, not to mention emerging market kleptocracies. Coronavirus has merely accelerated our collective descent and brought forward the emergency responses that were already on the cards. Global credit conditions are tightening in defiance of central bank measures and governments are engaged in a race against time to deliver financial aid to citizens and businesses to prevent breach of contract on an immense scale. Bridging finance only works if there is a strong pillar on the other side of the ravine. Otherwise, it is a bridge to nowhere.

The longer the shutdown, the more capacity will be lost forever and the more corporate failures and bond defaults. Much global production is based in nations with poor creditworthiness, whose only hope is the IMF. Massive public stimulus and private sector recovery will confront broken supply chains, bankrupt suppliers and depleted inventories. Beware the inflationary backlash!

 

LatestMedia

 
Listen to Peter Warburton's Podcast on 'The madness of crowds, continued …', in which he recognises the potential for policy interest rates to drop further and financial asset prices to surge higher, but disputes central bank claims that the new monetary tools will be effective in stimulating economic growth or corporate earnings.

 

LatestMedia

The latest issue of The Property Chronicle has a number of brilliant articles including one by Peter Warburton titled Is this the age of permanently cheap credit?

LatestMedia

On 2 November 2019 Peter Warburton was interviewed by James Anderson of SD Bullion.

In the interview, Peter discusses the corporate credit market splitting into two parts: one that will continue to price off (or under) the government curve and a remainder that will price idiosyncratic default and illiquidity risk. Even if central banks retain control of the yield curve, this will not prevent the development of a destructive default cycle in the second part.


LatestMedia

On 29 November, Peter Warburton was a speaker at a Chambers & Partners Brexit seminar held at the Plaisterers’ Hall in London. Peter addressed the economic context, options and scenarios of Brexit.

LatestMedia

Peter Warburton discusses the unavoidable threat to the economy.

 

Recent

Publications

Market Focus May 2020

Beware the bear steepener

Yield curve control in the JGB market is one thing; yield curve control in the US Treasury market is quite another. Non-residents own 13 per cent of the JGB market but 35 per cent of US Treasuries, and they sold a net US$300bn in March.  The gigantic expenditures of the Federal government and the stupendous liquidity injections by the Federal Reserve have amplified inflation uncertainty and validated fears of a protracted slump in activity. Both factors are associated with a rise in the term premium. We expect the Treasury yield curve to steepen in the 2- to 10-year segment against the wishes of the authorities and the expectations of institutional investors. This could be a painful reunion with reality. 

In the mid-1970s, mass unemployment coincided with a painful spike in inflation, particularly in the UK following a disastrous relaxation of credit conditions. A plunge in output and employment is neither necessary nor sufficient to deliver a weak pricing environment. Western governments have offered income guarantees with one hand but mandated a massive cut in productivity with the other. The inflation profile for the coming months is highly uncertain.

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May 2020

Chart of the Month

‘Buy the close, sell the next open’ has become a popular strategy in the equity market in the past 10 years; this chart shows that prior to the Covid-19 crisis, it has averaged annual returns of 3.7% for a volatility of 3.6%, bringing the Sharpe ratio above 1, which is very good for an equity strategy. However, as a famous financial quote says: ‘Systematic strategies with an elevated Sharpe ratio are strategies that have not experienced a left tail’. That was it: if we include the Covid-19 effect, the Sharpe ratio is more than halved.

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Data Source: Eikon Reuters, EP calculations
 

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