Commodity prices to rise
Commodity prices will continue to rise despite the US having entered a recession, according to Legal & General Investment Management (L&G).
James Carrick, investment strategist at L&G, said that although emerging economies’ exports may suffer because of the US recession, economies such as China stand to benefit from a lower global cost of capital.
Carrick said: “Emerging economies arguably need to raise interest rates and allow their currencies to appreciate against the dollar. But this will exacerbate the inflation problems in the US and UK. As we saw following the breakdown of the Bretton Woods regime 40-years ago, US and UK assets are likely to underperform in those economies with stronger financial balance sheets.”