FTSE 100 hits new recent high
Despite the fact that the UK economy would appear to be heading downwards the FTSE 100 has today reached a level not seen since April with investors apparently looking to increase their appetite for risk. This would seem to be totally at odds with the current direction of the UK economy which appears poised on the verge of a potential double dip recession and a very difficult couple of years. So why is the UK stock market pushing ahead?
In general many people believe that the UK stock market tends to "look forward around nine months" therefore it would appear that some investors believe the almost inevitable economic downturn may well be short-lived. However, even though some of the business and pricing surveys are at loggerheads with each other the Bank of England is most certainly starting to talk down the possibility of a short-term recovery in the UK economy. Perhaps it is the strength of the banking and the mining sectors which is giving an artificially buoyant look to the FTSE or perhaps economists and the Bank of England have got their view on the economy wrong?
It is also worth remembering that gold recently hit an all-time high with investors apparently looking for safe havens in these troubled times.
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