2021 was always going to be a difficult year to follow. Despite the ongoing challenges presented by the COVID-19 crisis, there were ample opportunities for global investors to prosper. Investors in real estate did exceptionally well, benefitting from recovering GDP growth and robust investor demand. As we start 2022, it is useful to think through the likely drivers of performance this year.

The last few months of 2021 were dominated by the return of inflation. For the year through to fourth quarter 2021, CPI inflation reached 5 percent in both the UK and the euro zone. This dramatic rise has led to expectations of a swift response from central banks, with balance sheets expected to contract and base rates rise. When combined with the ongoing uncertainties associated with the lingering impact of the COVID-19 crisis on aggregate demand, scope for ongoing disruption to global supply chains, as well as current geopolitical concerns, a period of elevated uncertainty and volatility