“We won’t know the answer on how protectionist the US will become for months and months,” Buxton admits.
“But nothing came out of Trump’s meeting with Xi Jinping but ‘we get on well together and we will work to ensure that we don’t do anything too silly on trade.’ Again, I think the worst fears won’t be realised there.”
Closer to home, however, Buxton does worry that as monetary policy comes to an end, sterling will become the UK’s only safety valve.
“Sterling is entirely being driven by perceptions of Brexit as this week has demonstrated,” said Buxton.
“The outcome of the general election is a foregone conclusion. The conservatives will return with a stronger majority, and if that does at the margin reduce the bear case for sterling or the risk of hard Brexit that clearly has ramifications for stocks and sectors.
“In the medium-term, I still worry that when the economy slows, the only safety valve we have is sterling. We may well have a powerful rally in currency, but I think that long-term, we’ll still struggle.”
