Carrick says the benefits of homeworkers being able to build up large savings pots have largely accrued to the better off, with the poor having taken on more debt, “so the effect of the savings pile won’t be as large as many people think.”
Dickie Hodges, who runs the Nomura Global Dynamic Bond fund, is an example of how much work and consumption habits have changed, but he doesn’t entirely buy Pattullo’s analysis.
Hodges relocated to Wiltshire from London during the pandemic, and intends to work from home to the maximum permitted extent in future. He says: “I am more productive working from here and happier. And my firm can’t complain as my fund has tripled in size over the past 18 months or so.
"I think inflation will spike this year, and then move downwards. I don’t know how central banks can be so certain in their view, with so much change around.
It’s probable we will go back to the 2 per cent level, but we need a lot more information to be sure. I think while there will be winners and losers. What could happen is that while prices in some parts of the economy and country will fall, demand is simply being moved between sectors, rather than actually falling, so the prices increases will move with the demand, and overall inflation won’t fall.”
An example of this would be that the cost of renting a retail unit in a city centre location might fall due to people working from home, but eventually, the cost of renting a retail unit in the suburbs where people spend more time and money will rise, ensuring the overall level of prices in the economy remains stable or rises, rather than becomes deflationary.
The MV=PT equation may be coming under pressure, but whatever comes next will have a major bearing on client returns in the years to come.
David Thorpe is special projects editor of FTAdviser
david.thorpe@ft.com
