I had a fascinating conversation with one of our subscribers back in March 2020. We speculated whether the economic climate of the 2020s would resemble the 1970s. Unfortunately, the comparison has become something of a cliche. Newspapers say the coming months will be like the Winter of Discontent (1978-79), when widespread strikes and industrial action resulted in rubbish piling up in the streets. Stagflation (inflation and low economic growth) is a trending buzzword and the economic historian, Niall Ferguson, recently said, ‘Why shouldn’t it be as bad as the 1970s?’ In a similar vein, the former Governor of the Bank of England, Mervyn King, suggested that we could be in for a ‘very unpleasant period’. King did add a sanguine caveat. We’re not there yet and we just don’t know what will happen next. We don’t have a crystal ball and the economic models could be wrong, but some noteworthy comparisons with the 1970s can already be made…
Could the FTSE 100 sink towards 2500?
Readers may remember the three-day week introduced back in 1973 by the Prime Minister, Edward Heath. The state limited the commercial consumption of electricity to three days a week. Perhaps the lockdowns of 2020-21 can be compared to...
