Investors are worried that inflation may impact the UK stock market but Gervais Williams, managing director of Miton Group, explains deflation could be a bigger issue.
Since the tail end of November, UK equity prices have moved higher. This has developed to become a reasonably significant market move. For example, the FTSE 100 index is up from 5,800 to 6,600, a rise of almost 14%. And the mid-cap index has done rather better, rising by 22% in the same period. UK GDP has been largely flat during this time, so a move of this magnitude has caught out some market participants. Overall earnings expectations did pick up early in the New Year, but trends over the results season have been more mixed. Although many companies have largely met expectations, ther...
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