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The question that everyone’s asking themselves is regardless of whether we are getting into a double-dip recession, or is the current slow down is merely a reaction to the 2009/2010 surge and the upcoming cuts in public spending?
It is tempting to speculate and recommend that the present woes aren’t permanent as Britain starts to pay for Blair and Brown’s spending binge, even so there are a couple of indications that these problems are a lot more serious.
Two points force their way forward in that, whilst international GDP is increasing, the UK’s seems stuck. The massive enhance afforded by the devaluing Sterling seems to have had really tiny effect. Secondly, for all of the quantitative easing final year, ‘Money Supply’ is flat and falling.
As Tradefair’s Simon Denham lately commented: “I have usually been slightly suspicious of economic theory that suggests a weak currency is a enhance to an economy as on this basis the UK, Spain, Greece, Italy etc. in pre-Euro days really should have had the strongest economies and likewise Germany, whose currency has successfully strengthened throughout the last 30 years, should have been suffering.
“Weak Sterling, coupled with the Bank of England printing £275bn, appears to have transferred instead into persistently high inflation rate. And this in a time of high(ish) unemployment and reduced growth.”
Of course, I could locate a number of economic pointers to contradict the prior few paragraphs, nonetheless M4 Cash Provide appears to be the driving aspect at the moment and, with home costs now drifting lower, it seems that the UK is not about to surge any time soon.
Of course, looking at the FTSE 100 spread betting market place, this can make quite tiny difference. The vast majority of the revenues, of the FTSE 100 firms, comes from outside the UK. There is a reasonable argument that says that the index, in planet currency terms, is considerably undervalued.
A foreign investor in the UK’s senior index more than the final three or 4 years would have lost vast sums on currency losses, let alone the drop in the actual market place. To a European, the returns accessible in the FTSE would appear extremely tempting indeed as soon as you realise that most of your investment is not based in the UK at all.
Before you trade even though please note that spread betting carries a high level of risk your capital so ensure spread betting matches your investment goals. Spread trading carries a high level of risk. Seek independent suggestions exactly where needed. Familiarise oneself with the dangers.
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