As we enter 2023, our team has looked at the most significant news shaping our economies today. Here are their top points:

Uncertainty In The UK

The rotating doors of Downing Street and turbulence in the Palace of Westminster has created a great deal of distrust and uncertainty in the British Government, further agitated by numerous policy changes in a short period. In addition:

- UK households will be paying 500% more in bills by Spring 2023 compared to pre-pandemic times.
- The knock-on impact of this political instability has created a depreciating pound.
- The bill crisis has caused further problems and created income gaps as some households are paying more than half their income on bills.

The Chinese Conundrum

China's controversial Zero Covid Policy caused a decline in GDP, though it is expected to ease in 2023 with the newly relaxed rules.

- Pre-pandemic China's economy was growing at a high rate of 8% annually. 
- The manufacturing sector dominates the economy but due to this policy, a lot of warehouses have closed. 
- China's integration with the rest of the world (it produces a third of the world’s intermediate goods) has caused other economies to struggle.
- The impact of the policy is said to have more of an impact than that of the Russian-Ukraine War.

Public markets have seen a disruptive year, with S&P 500 dropping more than 23%, causing investors to further diversify and rebalance their portfolios. However, expectations are positive for 2023 as we see the ease of volatile economic conditions and the deployment of dry powder.

Foreseeing this, the major banks have seen more opportunities in private markets as Private Equity and Venture Capital delivered more sustainable returns. Europe, Southeast Asia, Latin America, and India showed the most activity.

Following suit, investors want to place capital in private markets to avoid public market turbulence. As of now, the majority are using a wait-and-see approach; watching economies and how they behave with rising interest rates and inflation.  

The sustainability trend is likely to continue in the next five years as countries concentrate on achieving net zero emissions. This is mainly driven by tech companies, however, vintage fashion will also do well because of this.

What have the main concerns for clients been throughout 2022?

- Inflation 

- Interest rates rising 

- Recession fears

- Effects of Covid-19

What new economic and financial trends have risen in 2022 that you believe will lead the way in 2023 and beyond? 

- Preservation and capital protection is key. 

- Digital transformation for businesses.

- Alternative assets.

What were your expectations for 2023?

- Weakening economic output. Rising interest rates and international political tensions will worsen conditions for banks, insurers, and fund managers. However, the outlook for new financial challengers, including fintech and cryptocurrency sellers, is likely to be even tougher.

- Slower global economic growth.

- As central banks across the world simultaneously hike interest rates in response to inflation, the world may be edging towards a global recession in 2023, and with it a string of financial crises in emerging markets and developing economies

What were your favourite internal developments within Berkeley Assets in 2022 and what are you looking forward to the most in 2023?

2022

- Our new Brochure with up-to-date projects, products and services. 

- Impressive digital transformation of the firms’ operations internally and with clients through the introduction of the incredible CRM system and the lucrative client portal application. 

- Further team growth in both London and Dubai.

- An expanded investment mandate for Berkeley Assets to diversify and strengthen the firm's position. This will attract even more institutions and private clients.

- The broadening of investment criteria across more asset classes that will allow us to enter new territories.

- Due to demand, new services will become available from Berkeley Assets’ management consultancy division.