OPINION19 August 2022

Lorna Tilbian: What goes up, must come down

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Covid-19 Financials Impact Opinion UK

Economic crises are building up. Lorna Tilbian argues that for growth investors and executives alike, the focus has changed from endless vistas of growth to back to basics.

top down view of a microchip

The macroeconomic and geopolitical landscape has seldom looked as uniformly stark as it does now. After 30 years of tailwinds from China, the world’s workshop was shut for much of this year, with its zero Covid-19 policy imposing lockdowns across major cities and industrial zones. There is a global dearth of chips and components, with even a shortage of the chips to make the machines that make the chips. That’s serious.

In Europe, Russia’s invasion of Ukraine, with its impact on the global gas supply, has hit Germany particularly hard and paralysed Europe’s engine for growth, the world’s second-largest exporter. Elsewhere, in the UK, we stumble from the aftermath of Brexit’s labour shortages (and the departure of 700, 000 eastern Europeans) to Covid-induced tax hikes in the face of record inflation and rising interest rates, to a cost-of-living crisis exacerbated by the war in Ukraine, against a backdrop of supply chain issues and elevated freight costs.

Meanwhile, the US, the driver of ...