Courtiers Wealth Management
Courtiers Wealth Management

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Q&A: Courtiers 2020 Virtual Client Seminar

During the Client Seminar held on 4th December, we invited questions. Thank you once again for all those we received. We’ve been busy collating answers below.

If you have a question, please send Vamo a message via her website profile

We appraise risk every day so we haven’t changed the way we work. The multi-asset funds are managed to specific risk constraints so we must constantly assess the risk we are taking with the positions in the funds. The risk is formally monitored at least monthly by an independent investment risk and oversight committee. We look at the effects potential exposure will have on our risk profiles and we look at current positioning and the interaction of the various asset classes and individual positions held. The pandemic has brought a new risk and our weekly stress testing now reflects the scenario experienced in February / March 2020 as well as other scenarios from the recent past (the tech bubble of 2000, the global financial crisis, for example) as we assess the impact such a scenario would have on our current allocations.

Caroline Shaw


It’s been well documented that Biden’s administration will want to take a leading role in major global issues, such as climate controls and geopolitical tensions in certain areas. Biden has already announced that the US will be re-joining the Paris Agreement and reopening discussions about reinstating the US’s previous agreement with Iran on nuclear development.

Americans are generally hacked off with China and Trump’s tough stance, and the imposition of sanctions, was a vote winner. In fairness to Trump, China has been playing fast and loose with WTO rules for some time. I would not expect Biden to go soft on China and believe that his administration will apply pressure to thwart Xi Jinping’s quest for a bigger role for China in world affairs.

Regarding ‘FANGS’, it is quite normal for new sectors to grow rapidly before being regulated. There are good examples historically, energy production (oil and coal especially), medicine, drivers and automobiles, broadsheets and the tablet press to name but a few. We expect a major concerted effort from Western governments to clamp down on practices within the new, big tech and communication companies which will likely be to the detriment of their long term prospects. They are currently very big, very profitable and very monopolistic.

Gary Reynolds


Microsoft alone is a huge organisation. I would say it is viable for such a global organisation to target Net Zero in 10 years. Courtiers is growing, with around 100 employees to date. What we do today isn’t all about fixing what we’ve been doing until now, as it might be with Sainsbury’s with all their lorries on the roads, or BP with all their oil in the world.

What Courtiers does today in considering its environmental efficiency will impact largely on how Courtiers does what Courtiers will do tomorrow, and this is where our sights are firmly set, supportive of the UK’s target to bring all greenhouse gas emissions to net zero by 2050.

There are multiple efforts ongoing to mitigate our impact on the environment and these span across the organisation. Communicating often with each employee, to maintain awareness and maximise willingness to support Courtiers in minimising its environmental impact at an individual level, is a crucial foundation to ensure a company our size can be (and continue to be) successful in caring for the environment and doing its part as a UK business.

We committed to an environmental impact assessment shortly before the pandemic arose, with the view to enhancing efficiency across all current and future locations. Outcomes of the initial assessment have encouraged us to seek to obtain ISO 14001 Environmental Management Certification. This initiative is ongoing while the country’s been getting back on its feet.

Other areas relating to our current efforts include:

  • Actively encouraging paperless communication among employees and clients
  • Discouraging printing: installing touchscreen technology in meeting areas and providing tablets for employees to conduct internal and external meetings
  • Investing in high quality water bottles for all employees, to reduce use of plastic and reduce company waste. We encourage unallocated bottles to be taken home to families.
  • Investing in reusable bags for employees and their families, to mitigate use of plastic bags within and around Courtiers.
  • Shredding bins across all offices: We have scrutinised the waste journey with our waste management company to ensure shredded waste is disposed of in an environmentally friendly manner.
  • General, mixed recycling and food waste disposal units in offices.
  • A cycle to work scheme, encouraging those within a reasonable proximity to their place of work to consider environmentally friendly travel.
  • Installing efficient solutions in building or renovation works, such as automatic lighting, triggered by movement. More details of our initiatives on building and renovation can be communicated as we move forward.

I appreciate some of these endeavours are more measurable than others in the short term, while the success of others will reflect in the day-to-day operations at Courtiers in future years. We continue to monitor our activity in all areas of business and identify opportunities to operate with greater efficiency.

Regarding ESG investing, Courtiers Funds are not managed specifically to an ESG mandate. However, the Investment Team considers environmental, social and governance (ESG) factors when carrying out investment analysis, looking for companies which operate ethically and sustainably, with a responsible and transparent attitude towards corporate governance. We will also actively engage with companies where appropriate and proxy voting rights are exercised.

If one day Courtiers as a brand spans a footprint anything like the bigger companies out there, we will have done so having adopted an environmentally conscious approach, with ongoing efforts to align consciousness with growth and steer in the right direction.

Thank you for your question. It encourages me to consider beyond our regular client commentary how we might more broadly communicate our environmental initiatives in future.

Leo Hallam



Following on from the thoughts offered by Gary Reynolds during the seminar, the recent rise in investments was a combination of factors, with the principle likely growth due to the following;

1. Firstly, the US election was always a fraught period for world markets, and as this took place on 3rd November, but the actual results were not truly shown for the following couple of weeks, markets have shown a degree of “relief” that some stability will now likely return, following the victory of the “safe pair of hands” in Joe Biden. Whether this turns into reality, remains to be seen, but markets certainly reacted favourably for now.

2. Secondly, the more recent announcement of 2 pharma companies coming to market with a tested coronavirus vaccine has literally been a “shot in the arm” for the markets, and they reacted very strongly, with some markets posting large upturns just on the day of release!

3. The positive announcement in both the UK and European markets of attempts to introduce more fiscal policy in order to stimulate markets, rather than the previous tried (and failed!) Monetary policies, have shown a more positive forward thinking position, which the markets have reacted well to.

4. Finally, the ongoing analysis of funds, and the long term horizon of the Courtiers investment team has not only enabled them to weather the “storm”, but also to pick up on the recent stimulus, thus creating such a great return in just one month.

Richard Pearce


The shift to a digital economy has been quickened this year with the introduction of mandatory card payments for much of the goods and services purchased in the UK during the pandemic. Cryptocurrencies have indeed been around for some time but they aren’t yet a big part of everyday life for most people yet.  I covered cryptocurrencies in our client seminar in 2017. There have been developments since then. However, it is still impossible to justify them as currencies. As a medium of exchange they are not yet effective and they are not yet a store of value as the price moves are way too volatile. They can be traded like a commodity – just like hedgers and speculators trade. As an investment, I find it hard to justify them as a long term investment with return potential. But there may well be a successful government backed decentralised system of currency which then would be relied upon as a medium of exchange and as a store of value, backed as it would be by a government (though this, of course, defeats the objective for many cryptocurrency enthusiasts).

There are, of course, many ways that a private individual can speculate on cryptocurrencies. But I err on the cautious side. Bitcoin has been at 19000 before. It was December 2017. We had three client seminars that year. I had to change my presentation every day as the bitcoin price was rising so steeply. The crash was equally dramatic. If you invested at the peak of the euphoria (17th December 2017) you would lose over 60% in the following 7 weeks……..and more still if you held for longer. These moves were speculative driven rallies and crashes. An investment in cryptocurrencies is not for the fainthearted and definitely not an asset for our multi-asset funds.  We follow government backed digital currency developments with interest and we expect the trend of digitalisation to continue.

 Caroline Shaw


I completely agree that populist leaders have contrived to manipulate their messages and have found the new electronic media platforms a convenient and cheap method for disseminating messages to support their political positions, even if those messages stretch the truth. However, I don’t think these populist leaders could have succeeded were it not for the fact that a significant proportion of the electorate in their countries had become disenchanted with their previous governments and the fact that globalisation has been wonderful for so many people, but pretty disastrous for those in low paid jobs in already developed economies. These populist leaders tapped into a dissatisfaction that was in place, but I accept they teased it out with some spurious messages.

In contrast, I think that transparency in the financial sector is about as good as it has ever been. The “bible” of the investment world is a book first published in 1934 by Benjamin Graham (Warren Buffet’s mentor) and David Dodd called ‘Security Analysis’. If you read the first few chapters of that book you will find that the authors were highly sceptical of published information back then, especially that emanating from businesses trying to raise capital, and they quote lots of examples of dodgy accounting. Today, the rules are much stricter and the regulatory bodies have real teeth. It is also much easier to get hold of information which, certainly in most developed countries, is published in a systematic way due to the good job that lots of the accounting bodies have done in recent decades. Nonetheless, spectacular failures and frauds still occur. Enron took the whole market for a ride, and latterly so did Wirecard. I always remind young analysts to be sceptical about everything because our sector attracts crooks. I cite the example of Willie Sutton, a highly successful American criminal who, when asked why he robbed banks, replied “Because that’s where the money is”. For obvious reasons, there is more money in the financial sector than in any other sector in the world, and for that reason it attracts a lot of crooks. One can never be too careful!

 Gary Reynolds


The fund prices are published after the fund management charges are taken. The fund returns in my presentation are therefore post-fund management charges.

Caroline Shaw


Courtiers has and will continue to make equity investment decisions based on valuation, including all real estate companies. Courtiers made three investments in UK REITs post-crash: NewRiver, Land Securities and BMO Commercial Property Trust. These decisions were based largely on favourable discounts to net asset value (NAV) as rental income, particularly in the retail and leisure sectors, was hugely impacted by lockdown restrictions and difficult to forecast. With rollout of the vaccine next year, one would expect a return to normality and stable rental income will follow.

Office rental collections have been fairly robust throughout the pandemic. While some firms may allow their employees to work from their home more in the future there will still be a role and need for office space going forward. The physical retail sector is and has been facing more structural issues. Niche areas of retailing, such as supermarkets, may become more defined as an investment opportunity in the future.

Matthew Parker


Not to upset a large proportion of the population, the speculation of a one-off 5% tax of housing, pensions and business assets above £500,000 has been brought up by academics at the London School of Economics and Warwick University. This research proposed that £260bn could be raised this way. The same result could alternatively be achieved by raising other taxes such as adding 9p to the basic rate of income tax or raising VAT by 6p. This would go against the Conservative Manifesto of pledging not to raise VAT, National Insurance or Income Tax.
Either way, the government do need to show caution in their approach to restrict the damage to those who may contribute disposable assets/ money to the economy…

It is unknown what the government’s strategy will be going forward but Courtiers will be here to assist where possible with any developments in the way taxes are legislated.

Declan Shepperd

This is not the time to start hammering anyone with additional taxes because that will sap demand from the economy. A growing economy is the best way to help redistribute wealth and control long term public debt and the government needs to support decent capital projects rather than relying on monetary policy to do the heavy lifting – the latter hasn’t, and won’t, work!

I think Sunak knows this, so hopefully the government will park any notion of tax increases for a couple of years and concentrate on stimulating demand and productivity growth. After all, UK debt to GDP is only a smidgeon above its long term (320 year) average, so we’ve still got stacks of capacity before we need to start panicking about out of control borrowing.

 Gary Reynolds


I think the markets have priced-in the effects of Brexit and you can see this in the decline in the price of sterling over the last three years, and also the fact that the UK stock market has underperformed relative to other markets, especially this year. At the time of replying to your question there is a great deal of uncertainty as to whether Boris Johnson and Ursula von der Leyen can carve out a deal, even at this late hour. I believe there will be a deal, even if it doesn’t happen by 31st December this year, because it is clearly in the interests of the populations on both sides of the Channel to have a formal trading agreement.

Gary Reynolds


Thank you very much for your question.

The UK has very few Tech stocks compared to other countries. Currently, there are four Tech stocks in the FTSE 100 and they make up 1.25% of the indices.

We currently hold tech stocks outside the UK and have held UK Tech in the past but because of the small number of stocks in this sector it is less likely for them to get through our screening process. Also we do not actively target sectors so we would only buy a Tech stock if it passed all of our criteria. The initial idea generation is done via a quantitative model that screens the fundamentals of companies. This has been back tested and shows it is the most effective way to build a portfolio of long term investments.

A company like Blue Prism (I have been reading their website and it sounds like they are doing some fascinating things) would not be selected by our initial model because they made a loss of £80 million last financial year and are producing negative cash flow from operations. This means that they will need to raise more money in the future, either through debt or equity. This process can be very unstable and if they are frozen out of capital markets because investors lose faith in what they are doing it can be fatal for the company.

Blue Prism are currently investing in their product with the hope that they can scale it in the future and become profitable. They may be able to pull this off but, historically, it has been better not to chase these companies as it is hard to know what the future looks like.

This does not mean that the companies we invest in in the UK are not doing innovative things. Morrisons are working with Amazon and Deliveroo to bring rapid fulfilment of shopping orders to their customers, L&G are trying to solve the UK housing crises by building modular houses in a factories, Centrica is behind the UK smart home giant Hive etc. Once we have identified profitable companies, the analyst must assess whether they believe management are competent enough to make incremental improvements to their products to stay relevant. This can often mean doing highly innovative things but not necessarily under the banner of Tech.

Jacob Reynolds


I expect interest rates will rise, not to the levels of the 70s, but back to what would be more “normal”. For example, the general theory of rates for short term deposits, if you like the “base rate”, is that you get the rate of inflation, plus the rate of long term growth in GDP. Both of these are estimated at 2% (although our rate of long term GDP growth may now be slightly lower). This would mean 2% for inflation plus 2% for GDP growth giving a total of 4%. In other words, this would enable anybody depositing cash at a bank to get a return that is the equivalent to the rate of return in the economy. Those investing for a longer period, such as buying 30 year government bonds, would expect at least the 4% they could get from placing money in a deposit account, plus something in return for taking the “long term” risk. In finance this is called the “term premium”. I think you will see the “term premium” go up long before base rates start rising meaningfully, and this would be pretty disastrous for anybody holding long dated bonds.

Gary Reynolds


Firstly, I don’t expect a “no deal” Brexit, even if something isn’t arranged by the 31st of this month, but if it did happen then it is going to make life difficult for a while, at least until we find our feet under the WTO (World Trade Organisation) rules for export and imports, but in the long run a Brexit deal, or lack thereof, won’t be the main driver of this country’s wealth – that will depend on how successful we are at innovating and increasing productivity. As we’ve seen with the rapid approval and development of vaccines for Covid-19, when we are up against it, the Brits can deliver quite well. So I am an optimist.

Gary Reynolds


I think growth will continue for as long as mankind exists because it’s in our nature to try and improve our individual lot, which has the effect of improving living standards for everyone – it’s what Adam Smith referred to as “The Invisible Hand” in his 1776 classic ‘The Wealth of Nations’. Growth improves living standards and the quality of life. The best example I can give is if you can go back to 1700 you will find that around two thirds of the economy of this country related to agriculture, when the majority of the population worked long hours on the land carving out a living with very little time for education or recreation. Further, they were at the mercy of the harvest, which is why ‘The Great Frost’ of 1709 caused havoc with the economy. The poorest suffered the worst.

Fast forward to 2020 and only around 1% of GDP comes from agriculture, the majority of our economy is now made up of services. People work less hours, have considerably more money, and are able to follow pastimes and educate themselves. It is only growth in GDP that has enabled this. I accept there are costs borne by society that are not always properly calculated – these are what economists call “externalities” – the most obvious one being the affect that industrial growth has had on our climate. One can see, however, big improvements on the way, although there are many hurdles to overcome, and I suspect that in 100 years in the year 2120, our offspring will look back at us as the dirty polluters of the early 21st century and write about the great strides that were made in controlling emissions, putting carbon back in the ground and at the same time improving general living standards.

Gary Reynolds


The Tories have pledged not to increase VAT or Income Tax, which rules out rises in the major indirect tax (VAT) and direct tax (Income Tax). I’m hopeful that if the economy can be returned to normal growth there will be very little need to tweak tax rates, because the overall level of government debt to GDP would reduce if the denominator (the GDP of the equation) goes up faster than the numerator (government debt). Clearly, that hasn’t happened in a year when Covid-19 has placed intolerable financial pressure on the people of this country, and to which the government had to respond and, in fairness, did so quite well.
But the Tories need to fend off a resurgent Labour party that will try to recapture votes from its roots, and especially the parts of the ‘Red Wall’ of the Midlands and north that turned blue in December 2019. So I expect some tokenism from this government, which will probably mean taxing the wealthy. They have already reduced entrepreneur relief (the amount for which an entrepreneur can sell their business before paying tax on the gain) from £10m to £1m. I don’t think that sets a very good example in a country which claims to welcome innovative business people.

There is also talk of a ‘one-off’ wealth tax on assets over £500k, about which I would be very suspicious because I doubt it will make much difference to the government’s long term financing, and these ‘temporary’ taxes have a knack of becoming permanent – for example, Income Tax was introduced in this country in 1842 by Sir Robert Peel as a ‘temporary’ measure at 2.9% on incomes greater than £150. 178 years later, we still have ‘temporary’ income tax, and at rates a lot higher than 2.9%!

I think a target for the government will be anything that raises a few pounds without hurting the lower paid. Abolishing higher rate tax relief on pensions would be a logical step in this direction, although it will raise significantly less than Gordon Brown’s abolition of tax credits on dividend income to pension funds did in 1997.

 Gary Reynolds


The UK is a very mature economy, which means we have a substantial service sector. This is because our efficiency means that we can allocate less resources and people to producing the physical things that we need, which leaves a lot of time for those not producing ‘things’ to find other ways of being remunerated, such as providing services. All highly productive economies have large service sectors but ours, relative to our total GDP, is bigger than many others. For example, services in the UK account for 79% of GDP whereas in Germany they account for 69% of GDP.

But we are also good innovators, and a popular venue for start-ups. In a very good article in the Sunday Times of 13th December Oliver Shah draws attention to the data released by venture capital firm Atomico showing that London was the European ‘undisputed’ hub for tech investment, having attracted $34bn of capital since 2016, three times more than Paris. In fact, the UK as a whole has raised nearly $50bn over the same period, more than double the amount raised in Germany ($23bn) and France ($19bn). I don’t think we will ever become the manufacturing hub of the world again, but we will remain leaders in technology and services, which is where most of our growth will come from in the next couple of decades.

Gary Reynolds


This is a very big question that has puzzled some of the most brilliant economic minds of the last century. For example, John Maynard Keynes argued that government intervention was necessary when prices got “sticky” and that this benefitted long run output and, therefore, productivity and wages. Milton Friedman successfully disproved Keynes’ theories and showed that short term government intervention made no real difference to people’s spending habits, which were anchored to their long term expectations of future income.

What often happens is that great minds solve the problems of the time, but then times change. Government intervention in the economy was much smaller in the first half of the 20th century, when Keynes was prominent, but had been rising, unsuccessfully, when Friedman came to the fore. Today, money supply is very different to what either Keynes or Friedman would have recognised, but Keynes solution for kick starting an economy would seem to be more relevant when we’ve experienced 12 years of low interest rates but with virtually no growth in productivity. Back to your question, if the government intervenes, and increases spending, it would be better for it to identify long term capital projects which will continue for some years because the public will recognise these as other than temporary. This will create jobs and, hopefully, a lasting legacy of assets that improves the infrastructure of our economy and is therefore an advantage to everyone. This would push up real wages, and it would tick the boxes of both Keynesians and Friedmanites!

Gary Reynolds


I think the markets have priced-in the effects of Brexit and you can see this in the decline in the price of sterling over the last three years, and also the fact that the UK stock market has underperformed relative to other markets, especially this year. At the time of replying to your question there is a great deal of uncertainty as to whether Boris Johnson and Ursula von der Leyen can carve out a deal, even at this late hour. I believe there will be a deal, even if it doesn’t happen by 31st December this year, because it is clearly in the interests of the populations on both sides of the Channel to have a formal trading agreement.

Gary Reynolds


The Kyoto Protocol (1997) and subsequent EU legislation based on it defines biomass as a renewable energy source on a par with solar and wind. All renewable energy sources have arguments for and against due to the work undertaken prior to the generation of energy. For solar, for example, there is the mining and subsequent heating of the silicon used in the solar cells. For wind power there is the mining of the materials used in the generators as well as the steel and concrete needed to build the turbines. For biomass, the debates are around the production and transport of the pellets and the burning of the wood pellets themselves. The wood pellets are mainly manufactured using sawdust and wood that is wasted in the process of preparing timber for other uses. They are a by-product of an existing forestry industry and typically are not left to decay naturally (which also releases carbon) on the forest floor due to fire risk. Most global wood pellets are sourced from forests in the US that remain in a growth phase (i.e. the forested area is expanding).  However, burning wood is releasing carbon into the atmosphere. It is likely that legislation will evolve and the consensus is that biomass bridges a gap whilst battery storage options are improved enabling the efficient storage of other forms of renewable energy. Whilst there have been days in the UK where no coal has been used in power generation, such days are typically sunny allowing solar power to dominate. Since that energy cannot be stored at scale yet something needs to fill the gap on the days where the sun isn’t shining. Coal is one option but biomass can also fill that gap and can be switched on and off very quickly meaning it is more flexible.

Caroline Shaw

It has been a rollercoaster year for sterling. When the Covid-19 crash hit markets, investors flocked to the US dollar – just as they did during the global financial crisis of 2008 – and the pound sank to its lowest level against the dollar since 1985:

However, once the market recovery began, the pound bounced back and within a few months it was back at pre-Covid levels. A rising pound typically has a negative impact on the performance of the FTSE 100. As many of the largest companies in the UK are multi-national, much of their earnings are generated overseas, and these foreign earnings depreciate if the pound rises against the foreign currency. The recovery of sterling is therefore one reason why the FTSE 100 has underperformed relative to other markets since the crash in March.

The Courtiers multi-asset funds have some exposure to foreign currencies through direct investments in global stocks, but the index derivatives in the fund offer a means of gaining further equity exposure without having to convert to the currency of the index. Therefore the primary currency exposure in the funds is sterling, and this has been a positive contributor to the performance of the funds in recent months. If the Brexit transition goes smoothly then the pound is likely to see continued strength, which will benefit the multi-asset funds due to their relative under-exposure to foreign currencies.

 James Timpson


We hold Johnson & Johnson and Roche which are the world’s two largest pharmaceutical companies by revenue and market capitalisation. We also hold Astellas Pharma, GlaxoSmithKline and Sanofi who are also big players in the pharmaceuticals sector. Although most of these pharmaceutical companies are not involved in the mRNA technology, they have been actively working towards developing a vaccine for COVID-19 through a number of collaborations.

Courtiers’ funds held Pfizer at the time it made its Covid vaccine announcement in early November. Pfizer was the first in the race to develop the mRNA-based COVID-19 vaccine through its collaboration with BioNTech.  Although the announcement fuelled hopes of the society’s return to normal, management’s actions during that period reflected poorly on Pfizer’s governance practices. Following the announcement, Pfizer’s shares gained by almost 8% and on that same day of the stock rally, Albert Bourla, Pfizer’s Chief Executive, and Sally Susman, Pfizer’s Chief Corporate Affairs Officer, sold some of their shares. Although Pfizer responded that the sale by both executives was part of a prearranged plan, in our opinion, management actions did not reflect good judgement as the timing of the transactions sent a poor signal to shareholders. Like the senior management, we also sold our position having benefited from the price upswing.

In June 2020 Sanofi collaborated with Translate Bio to develop mRNA vaccines for different infectious diseases. In terms of their contribution towards the fight against COVID-19, Sanofi is also collaborating with the Biomedical Advanced Research and Development Authority to develop a vaccine and with Luminostics to develop a smartphone-based self-testing solution.

GSK also collaborated with Sanofi to develop an adjuvante vaccine candidate for COVID-19 and also has other collaborations including with Vir Biotechnology and Xiamen Innovax Biotech to develop solutions for coronaviruses. Johnson & Johnson are also developing a vaccine and Roche’s oncology drugs are being investigated for their efficacy in treating severe COVID-19 pneumonia.

Nyasha Jonhera


When the pandemic hit, everyone raved about the advantages of working from home. Many claimed that they were more efficient due to a reduction in time spent commuting and an absence of distractions (although it must have been pretty tough for parents tasked with doing their day jobs and ‘home-educating’ their children at the same time). I think, however, that everyone is now beginning to realise that there are disadvantages. Andy Haldane, Chief Economist at the Bank of England, made a fascinating speech on 14th October 2020 under the heading “Is Home Working Good For You?” and identified that home working causes degradation of both social and intellectual capital. Social capital because relationships cannot be built in the same way online as they can face to face, and intellectual capital because ideas are not exchanged as freely and training is not as effective for employees online as it is face to face.

Some workers have argued that they should be allowed to continue working from home, but this could backfire. If an office is setup in, say the south of England and it attracts local staff, then the employer knows that it will have to pay a relatively high salary compared to the rest of the country because housing and costs of living are more expensive in the south of England, and especially in and around London. If, however, home working is as efficient as working from the office then staff can be recruited from anywhere in the UK and, for that matter, in the world. UK call centres have successfully based themselves in Asia, so if homeworking really is as productive as being in an office, then this would be to the detriment of skilled office workers earning above average pay because their jobs will disappear overseas.

Personally, I agree with the Chief Economist of the Bank of England. I think there is an enormous value in having a physical presence for social interaction and I suspect the reason that Courtiers coped extraordinarily well in the initial weeks of the pandemic is because we had already built sufficient social and intellectual capital to see us through it.

I don’t think it will have much effect on markets, unless there is a genuine premium to be earned by companies that start employing homeworkers from cheaper regions of the world. Personally, I think this only works in service jobs requiring relatively low skills.

Gary Reynolds


The wood pellet sourcing is not causing deforestation as the US forests continue to be in a growth phase. The forests are sustainably managed. Most of the wood pellets are made using sawdust and other wood that cannot be used for other commercial purposes, and also from smaller trees thinned out of the forests in the usual process of forestry management. The Chatham House paper which highlights that burning biomass emits more carbon per unit than fossil fuels also acknowledges that this depends on the type of biomass. The paper goes on to conclude that biomass has a place if the feedstock (the wood pellets) is waste wood such as mill residues. It concludes that more resources could then be directed to wind, solar and tidal solutions for renewable energy. But it doesn’t address what happens if the sun doesn’t shine and the wind doesn’t blow, and the fact that battery storage isn’t yet capable of storing sufficient energy when the sun does shine. There are challenges and biomass isn’t a perfect solution. Biomass was categorised as a renewable energy source following the Kyoto Protocol and subsequent EU legislation. Whether this was appropriate or not is very much up for debate. The result was incentives as evidenced by the government funded grants and price guarantees for solar panels, solar generated electricity and biomass boilers here in the UK for example (renewable heat incentives that still exist). Every renewable energy source has negatives associated with it, whether in the generation of the power or the work needed to get to that point. Global political agreement will be required to find the balance to move forward and ensure that incentives are appropriately managed. We expect the power industry to continue to evolve and improve its environmental credentials at every step. Drax is already leading a carbon capture and storage scientific research project to remove carbon from the atmosphere and store it safely.

Caroline Shaw


The residential property market rebounded quickly after the first lockdown in the UK, aided by the Stamp duty holiday. Both country and London residential markets saw their highest number of offers in 20 years. The UK residential market remains undersupplied, which will support capital and rental values in the future.

Office rental collections have been fairly robust throughout the pandemic. While some firms may allow their employees to work from their home more in the future there will still be a role and need for office space going forward. The physical retail sector is and has been facing more structural issues. The impact of these issues, such as the increasing share of online retail sales, have only accelerated during the Covid-19 pandemic. While shorter lease terms and turnover rent lease structures are possible, some landlords are opting to exit the sector via disposals or repurposing. UK industrials are expected to remain strong. Developments and private investment is subject to the Brexit deal.

Matthew Parker


I think a satisfactory deal with the EU will make the next couple of months a lot easier. I suspect, however, that one way or the other, even if we go past the 31st December deadline, some deal will be cobbled together because it makes sense for free trading nations on both sides of the Channel to continue trading freely with each other. There is also a big risk to the EU in not getting a deal, and this is not simply because of the potential loss of a significant export market. The EU is a politically driven programme and we are the first country to leave it. If we are successful outside of the EU under a ‘no deal’ Brexit, then this would signal the severe short comings in the EU (and especially within the Euro Area) and encourage more of its members to question the way in which it is run. And some countries have every justification for raising those queries – the average Italian has had no real increase in their standard of living in 20 years, hardly an advert for EU membership. A deal works for both parties, so I would be astonished if one is not forthcoming.

Gary Reynolds


This is the story about the Bank of England “losing” £50 billion in bank notes. The notes aren’t lost, however, they are merely unaccounted for and in our opinion there is no need to be concerned. The Bank of England makes estimates regarding how much individuals are saving and estimates for how many notes are used for everyday transactions. The difference is unaccounted for and it has risen. The shadow economy is likely to be a home for some of these bank notes. It is estimated that the shadow economy (money associated with undeclared work and with black market transactions) accounts for a chunk of this amount, and possibly all of it. But there are other reasons that bank notes might not be circulating as expected at the moment and most are to do with the Covid-19 pandemic. Firstly, most shops are no longer accepting cash. And most people aren’t going out into towns and cities to physically visit their banks. In addition, most banks have shortened day time hours making it even harder to visit.  As interest rates approach zero there is no penalty for keeping your bank notes at home. You won’t be earning interest in your bank account anyway. So most households probably have more bank notes at home and in wallets than usual. Even if the shadow economy only accounts for half of the total £50 billion, with £25 billion in notes unaccounted for and 29 million households this amounts to an additional £800 per household.  On average this isn’t implausible. You don’t tell the Bank of England how many bank notes you are just keeping at home at the moment, and that is why this money is unaccounted for.

Caroline Shaw


We recognise that animal testing forms a big part of pharmaceutical research and it is a necessary step that pharmaceutical companies have to go through to prove a drug’s safety prior to initiating human trials. To minimise the impact of animal cruelty, most of these big pharma companies have adopted the principles of the 3Rs, which are replacement, reduction and refinement, when conducting animal studies. It is encouraging to note that scientists and the industry are actively searching for alternatives to replace animal testing. Although we do not expect animals to be replaced in pharmaceutical research overnight, the efforts may eventually lead to a reduction in the use of animals.

 Nyasha Jonhera


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