Issue - meetings

1.            The Committee noted and discussed the update.

2.            The Committee noted how the information effectively “sets the scene” for the next agenda item

            Mr Harkin noted that Mr Buckland is now the nominated alternate investment advisor and will be supporting the officers and committee going forward.

            Mr Harkin directed the room to the market statistic on page 131 which showed the continued strong performance in equities in the quarter.   High energy prices resulted in a positive return on commodities but could give some concern for inflation if the trend continues.  

            The Chairman asked Mr Harkin whether he had any thoughts on the impact of the budget and how it might affect the economic growth. Mr Harkin responded by stating that it was a budget with very little surprises versus the speculation.  The Office of Budget Responsibility forecasts on growth and the Government focus on infrastructure investment and innovation in new technology was clear.

            It is also important to note that whilst the liabilities are centred in the UK and affected by inflation, the asset allocation is not and has exposure to the global economy which generally has a better outlook so the effect on assets will be dampened.  The markets seemed fairly benign in their reaction to the budget on the day.  

            Councillor Bateman raised the issue of gas prices and the expected increase in costs.  Mr Harkin noted that crucially this will depend on supply to the market and relates to wholesale prices but there is an expectation of an increase.  It was noted that the effect this will have is hard to predict on markets but it could lead to increased UK inflation if passed onto customers as would affect the CPI measure.

RESOLVED:

1.            The Committee noted and discussed the update.

2.            The Committee noted how the information effectively “sets the scene” for the next agenda item