Study the stock market for signs of recovery in the economy
As more and more reports indicate ongoing improvements in the UK economy many experts believe there is no better indication than the UK stock market. Historically, stock markets around the world are estimated to forecast economic activity up to 9 months in advance which offers a perfect measurement of hopes and thoughts for the future. It would be wrong to say this particular method is infallible but if you think of the UK stock market as an information exchange you will get an idea why it is so important.
It's not just information which is available to the public which is disseminated within the UK stock market it is also information which may be on the way or not yet available. Insider dealing for one is a situation which seems to occur on a regular basis in the UK stock market not only with regards to company announcements and company prospects but also economic forecasts and economic decisions. It is very rarely that the UK stock market is wrong about the movement of UK base rates with the market often moving prior to the official announcement.
In some ways the UK stock market can become a self fulfilling prophecy as confidence grows and money returns the market which then feeds through to business and the economy as a whole.
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