Danger ahead for the complacent investor

market outlook

Positive economic indicators have led to a complacent attitude in financial markets but ignoring the risks associated with unsustainable US government policy could lead to some nasty surprises

Economic news has continued to confirm that the UK economy is in good shape. The housing market has started 2004 with prices continuing to push ahead, retail sales are buoyant and business confidence is rising as a strong pound keeps the lid on rising input prices. In the labour market, unemployment remains low and upward pressure on wages is starting to emerge. As the recovery has become more established, the Monetary Policy Committee (MPC) has raised interest rates to reduce the stimulus to the economy and facilitate the transition to a self-sustaining growth environment. It has been mu...