Anton re-joined Michael after his last episode on the segment, where he predicted Liz Truss’ short reign as UK Prime Minister as a result of her administration’s proposed and since-abandoned tax plan, which, as noted by Michael in this latest episode, could have worsened the UK’s own inflation crisis.
On the international and domestic fronts, where global inflation sits at 8% and South Africa at a YoY rate of 7.5%, Anton highlighted the driving factors behind the global inflationary pressures, noting that there’s a slight “disconnect” between these factors in the European and South African context.
Despite the significant pressure on discretionary spending and economic conditions in South Africa resulting in a low-growth environment, the South African Reserve Bank will be “forced to tighten rates because headline inflation is 7.5%.” Anton remarked, even though central banks in environments like South Africa’s typically would follow loosening policies in low-growth circumstances.
Anton and Michael went on to discuss how investors can hedge against inflation, highlighting the value in emerging markets and fixed income assets. Key to Anton’s insight is the principle that timing the market, especially now, is difficult to successfully accomplish.
The pair also spoke about the looming prospects of recession, with Michael asking Anton whether we should be more concerned about recession in the next 12 months. Anton drew on the parallels between now and the period between 2002 to 2008 as being “remarkable how many similar things are playing out.” Highlighting what he expects SARB’s response to be amidst the inflationary pressure and recessionary storm looming.
To catch all of the insights from the segment, you can listen to podcast recording here.
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