Inflationary stirrings

Inflation may have turned negative in Britain, says Merryn Somerset Webb, but don't expect things to stay that way.

At the Value Investor Conference this week, Kevin Gibson of Eastspring Investments discussed an amusing chart.It showed the path of corporate earnings over time, overlaid with analysts' forecasts of said earnings. Changes in the latter lagged changes in the former by pretty much the same margin all the time. Why? Because most analysts don't read the future, they read the past.

They look at last year's results and assume the next year's will be the same plus a bit. They "echo, they extrapolate, and then they miss the turning points". The same is true of almost everything. In the 1960s it was true of Japan.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.