Businesses are strongly optimistic about the next six months as global economies reopen. We expect the service sector to drive recovery in most markets as consumption rises. The inflation environment is firming, but we expect major central banks to remain dovish through 2023 as they see current price rises as transitory and adopt a more socially inclusive approach to their mandates. Progressive tax proposals are starting to follow the stimulus rollout in the US, UK and Europe. New US spending bills and the latest UK budget both include plans for higher corporate, capital gains and income taxes.
Business sentiment indicators show a high degree of optimism for the next six months as economies formalise their reopening schedules.
Inflationary indicators are picking up, a key risk for insurance. We expect major central banks' current monetary policy stance to remain steady through 2023.
Fiscal reforms are beginning to emerge from the huge global stimulus. These favour more progressive tax structures to aid the return to fiscal sustainability.