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19 August 2026, 08:09 UTC Chief Investment Office GWM Investment Research

Paul Donovan's daily audio: All about inflation Audio Paul Donovan, Chief Economist, UBS GWM, UBS AG London Branch

Tensions in the Gulf continue, and crude oil futures remain over USD 90 per barrel. This has reignited some inflation concerns. The fact that consumers have shifted spending patterns in response to higher oil prices is not properly reflected in inflation calculations—and while the impact will not be dramatic, it does mean that the damage to real incomes is slightly less than inflation data suggests.

UK July inflation data was as expected. The peculiarities of electricity pricing in the UK meant that there was an increase reflecting the lagged costs of the Gulf war. High up in the supply chain, input producer prices were less than expected.

US President Trump announced that US importers of Canadian goods will not be forced to pay a 50% tariff, two hours before the tariffs were due to take effect. Investors are not, perhaps, entirely surprised by this policy reversal. The US affordability crisis is a major political concern, and this very visible policy would have raised consumer prices.

ECB President Lagarde is speaking at a World Economic Forum event. There are two reasons to be interested: Lagarde has been uncharacteristically quiet recently; media reports suggest that Lagarde wishes to lead the WEF, and may exit the ECB early to do so.

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This report has been prepared by UBS AG London Branch. Please see important disclaimers and disclosures at the end of the document.

Global asset class preferences definitions The asset class preferences provide high-level guidance to make investment decisions. The preferences reflect the collective judgement of the members of the House View meeting, primarily based on assessments of expected total returns on liquid and commonly known indices, House View scenarios, and analyst convictions over the next 12 months. Note that the tactical asset allocation (TAA) positioning of our different investment strategies may differ from these views due to factors including portfolio construction, concentration, and borrowing constraints. Attractive: We consider this asset class to be attractive. Consider opportunities in this asset class. Neutral: We do not expect outsized returns or losses. Hold longer-term exposure. Unattractive: We consider this asset class to be unattractive. Consider alternative opportunities Note: For equities, we have a five-tier rating system with two additional preferences Most Attractive: We consider this asset class to be among the most attractive. Investors should seek opportunities to add exposure. Least Attractive: We consider this asset class to be among the least attractive. Seek more favorable alternatives opportunities. When equities are included with the other asset classes in the three-tier rating system, we collapse “Most Attractive” with “Attractive” and “Least Attractive” with “Unattractive.”

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