Is it dangerous for the UK stock market to follow America?
Despite dismay in the UK stock market earlier this week after the Bank of England issued a very downbeat forecast on the UK economy, today saw the FTSE 100 hit a 10 month high on the back of comments from Ben Bernanke the chairman of the Federal Reserve. He firmly believes that the US economy has turned and the prospects for the future are good. However, does this particular comment justify today's rise in the UK stock market and is it sustainable?
There is no doubt that despite areas such as Japan and China having more influence on the worldwide economy, the US economy is still the leader. As and when the US economy does improve this will inevitably drag all economies around the world out of their economic woes although the pace of recovery in some economies will vary significantly.
It is still a very fickle stock market in the UK with investors dumping stock earlier this week on the downbeat statement by the Bank of England only to start picking up stock again after positive comments from the US Federal Reserve. If you are looking to invest in the UK stock market, or any other investment market, it is essential that you take professional financial advice because the situation is changing on a daily basis and volatility is very high.
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