Quarterly Insights - Q1 2026
April 8, 2026
Dear Clients, Colleagues and Partners
IN SUMMARY
The Big Picture
- The Iran war has moved rapidly from geopolitical shock to economic reality, setting in motion the familiar sequence:
War → supply shock → inflation → demand destruction→ policy response.
- Markets are still debating whether the shock is temporary, but the more important point is that we are already in the most dangerous part of the cycle: the physical disruption has happened, inflation expectations are rising, and growth risks are only just starting to appear.
Politics & Policy
- The U.S., UK and Europe face the same problem – an inflationary supply shock into weakening growth, but their policy constraints differ with the U.S. best placed to delay pain, the UK most vulnerable to it, and Europe most exposed but with greater fiscal flexibility.
- The bigger long-term risk is not simply higher priced oil, but a more fragmented global order of bilateral energy deals, sovereign guarantees and non-dollar settlement, accelerating strategic autonomy in Europe and reinforcing the case for gold and financial repression.
Inflation & Economic Growth
- The inflation shock is now visible in energy, transport and food, but the more important development is what comes next: squeezed real incomes, weaker confidence, tighter financial conditions and delayed demand destruction.
- Labour markets are softening, households are more exposed than in 2022, and while AImay support the next recovery through productivity gains, it may also make that recovery more uneven, more fragile and more job-light.
Asset Allocation
- Asset allocation is no longer about chasing a single macro-outcome, but about respecting the sequence: ‘Inflationary Boom ’first, ‘Inflationary Bust’ next, and potentially ‘Deflationary Bust’ later if growth buckles hard enough.
- Gold, selective sovereign duration and alternative strategies remain the key portfolio defences, while broad equity beta and credit face a more hostile backdrop of rising volatility, wider spreads and greater uncertainty around policy and reserve assets.
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CONTACT US
For further information on any of our services, or if you would like to arrange a meeting with an investment manager to see how we can work with you, please get in touch.
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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