Quarterly Insights - Q4 2025
January 14, 2026
Dear Clients, Colleagues and Partners
IN SUMMARY
“THE TROUBLE WITH OUR TIMES IS THAT THE FUTURE IS NOT WHAT IT USED TO BE.” ~ Paul Valéry, French Poet, Essayist and Philosopher (1871-1945).
- Employment is cooling and inflation pressure will likely follow.
- Labour markets matter because they are not just “one input” into inflation. They form the foundation of capitalism, and are the transmission mechanism through which demand becomes durable:
Job security → Wage growth → Confidence → Credit formation
- This is happening at a time when AI is beginning to look less like a “free lunch” and more like a new capex cycle, which will likely lead to higher costs in the real economy before it raises productivity.
- A slowdown in AI-driven capex and investment will impact investor sentiment, and if investment does not pull the economy forward, a slowdown might become reality later in 2026.
- However, this narrative should support the policy easing cycle as central bankers and governments come to the rescue of weaking labour markets and slowing growth. The question then becomes how much stimulus is possible given already strained government balance sheets.
- In the near term we expect growth and sentiment, driven by investment, supportive policy and disinflation, to remain robust and supportive of risk assets.
- However, it is the tension between weakening labour markets driving cyclical disinflation and structural capex intensity driving higher energy costs, through which we view 2026. The message is to prepare for a
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LeifBridge Investment Services
Shard Capital Partners
Floor 6, 51 Lime Street
London, EC3M 7DQ
United Kingdom
Telephone: +44(0)20 7186 9900
Email: Info@Leifbridge.com
www.leifbridge.com
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IMPORTANT INFORMATION
LeifBridge is a trading name of Shard Capital Partners LLP. Shard Capital Partners LLP is a limited liability partnership, registered in England with registration number OC360394. Shard Capital Partners LLP Registered office:36-38 Cornhill, London, EC3V 3NG.. Shard Capital Partners LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom, reference number 538762.
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