October Investment Report: Balancing growth and inflation

In this update, we look at the key themes shaping the global economy and investment markets, including economic growth, inflation, interest rates and how portfolios are currently positioned.

 Key points

• Global growth remains resilient, led by the US and supported by consumer spending, company profits and artificial intelligence (AI-related)
• Inflation remains a concern, with higher energy prices increasing pressure on prices and potentially keeping interest rates higher in the UK, US and Eurozone.
• Our overall investment approach remains balanced, with the mix of shares, bonds, alternative investments and cash unchanged. This reflects our current outlook and the level of risk we aim to take.
• Our investment managers continue to look for opportunities, with a greater focus on opportunities within bonds.

Global economic backdrop

Consumer spending, healthy company profits and investment in artificial intelligence (AI) continue to support global economic growth. These factors are helping economies remain resilient despite political uncertainty, higher energy prices and borrowing costs.

The US continues to be a major driver of global growth, supported by government policies. Growth in Europe is weaker, although government investment, particularly in Germany, is providing some support. UK growth remains modest. China’s economy continues to see mixed growth, although its government has scope to provide further support.

Inflation

Higher energy prices are increasing concerns about inflation in the short term. However, there is currently little evidence that these price rises are leading to wider increases in costs, such as higher wages.

Europe and the UK are particularly affected by the cost of energy bought from overseas. This means inflation could remain higher for longer, potentially into early 2027.

Central Bank Policy

Central banks, including the Bank of England, need to balance bringing inflation under control with avoiding an unnecessary slowdown in economic growth.

Financial markets currently expect interest rates to remain higher, even though central banks have so far been reluctant to raise them further.

Portfolio positioning

We continue to hold a balanced mix of shares, bonds, alternative investments and cash, with a preference for selected share markets outside the US.

Higher income from government bonds may provide opportunities for investors while also helping to spread risk across the portfolio. Carefully selected alternative investments can provide further diversification by reducing reliance on any one type of investment.

With investing, your capital is at risk. Investments can fluctuate in value and you may get back less than you invest.

This material is not a personal recommendation or financial advice and the investments referred to may not be suitable for all investors.

Opinions, interpretations and conclusions represent the views of True Potential Investments at the date of publication and are subject to change. Forecasts are not a reliable indicator of future results.

All data sourced from Bloomberg L.P. (05/11/2026)

True Potential Investments LLP is authorised and regulated by the Financial Conduct Authority. FRN 527444. Registered in England and Wales as a Limited Liability Partnership No. OC356027.

True Potential LLP is registered in England and Wales as a Limited Liability Partnership No. OC380771.