Markets holding up well but headwinds starting to impact sentiment and activity While effects from the pandemic have receded in most parts of the world other headwinds have appeared and strengthened in the second quarter. Inflation accelerated sharply for a number of reasons including the war in Ukraine, sanctions against Russia, Covid restrictions in China and ongoing supply chain disruptions. This triggered an accelerated tightening cycle by central banks. These are all feeding into heightened uncertainty and are dampening sentiment. Decision-making processes are lengthening as occupiers take a ‘wait and see’ approach. On a positive note, labor markets are continuing to perform strongly and pent-up demand from the pandemic is still helping to support activity. For investors, the increasing cost of debt and inflation are impacting pricing and bidding dynamics around the world.