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A week is a long time in politics. Labour Prime Minister Harold Wilson is thought to have said this in the 1960s, a phrase that appears more prescient than ever.

Albert Einstein allegedly once described compounding as the eighth wonder of the world and one of the most powerful forces in the universe. Compounding – when your returns from the previous period are added onto the next period (and again, and again) – is indeed a powerful force and a crucial part of long-term investing. While many can grasp the maths behind compounding, it is very hard to visualize over the long-term as the numbers become so large.

The Labour government's proposal to introduce VAT on private school fees marks a significant shift in the UK's educational and fiscal landscape. Currently, private school fees are exempt from VAT, which provides financial relief to many families opting for private education. The new proposal aims to address funding disparities between private and public education while increasing tax revenues.

Markets have generally slowed down expectations of the pace of rate cuts as data had continued to signal stronger than expected inflation. However, the Fed did indicate earlier this week that inflation is coming down. Despite pushing back expected rate cuts, equity markets continued to push towards all-time highs in the second quarter, buoyed by US technology companies and the ongoing exuberance surrounding artificial intelligence (AI).

As bond yields declined earlier this year, the equity market rally broadened in the middle of the second quarter, meaning more stocks started gaining value across a wider range of sectors.

Following his dismal performance in the European Parliament elections on 9 June, French President Emmanuel Macron called for a snap election, an effort to discredit Marine Le Pen’s populist National Rally as a serious party of government.

We are halfway through an election year when more global voters – some 49% of the world’s population – are heading to the polls, the most ever.

The ECB cut interest rates by 0.25% to 3.75%, marking the first decline in five years, contrasting with fewer expected cuts from the Fed and BoE. While the starting gun on the rate cutting cycle has started, regional differences will result in a widening gap between central banks.

Prime Minister Rishi Sunak's decision to bring forward the general election to 4 July was unexpected, yet it has caused little market reaction. Labour is widely accepted to win the upcoming election, with expectations for policies promoting a pro-business and pro-worker environment, emphasising sustainable growth, labour market modernisation, and fair pay

Companies are taking advantage of discounted bond prices to buy back debt at a reduced cost, effectively allowing them to pay less while reducing their debt by the full par value. With central banks maintaining high interest rates, more companies are expected to pursue similar debt reduction opportunities over the next 12 to 18 months, enhancing their credit metrics and financial stability.