Watts: Commodities sell-off was justified

COMMODITIES SELL-OFF WAS JUSTIFIED

Old Mutual's Richard Watts believes soaring commodity prices are causing the sluggish growth seen in the UK and US in Q1.

It seems we have come full circle from worrying about a commodity driven inflationary spiral and the knock-on effects of tightening monetary policy to concern about softer economic data and lower commodity prices. Life certainly is not dull at the moment. In recent years, commodity prices have been seen as a proxy for global economic growth, so should we be concerned about the recent commodities sell-off? I think we have to put things in perspective. While commodities fell sharply in early and mid-May, the CRB broad commodity index ended the month on a rise, at a level near to where it w...