A nasty 1970s revival for Footsie

Article Abstract:

There is a danger that United Kingdom economic growth could slow, while inflation rises, bringing stagflation as was seen in the 1970s, according to Goldman Sachs' David Walton. Stagflation would affect stock prices, which have tended to underperform cash in previous periods of stagflation. The oil shocks were linked to 1970s stagflation, but falling unemployment could also push up inflation and lead to rising wage costs. There is concern that wages could continue to rise as economic growth slows. New confidence in the Bank of England could help ease pressure on stocks, so stagflation may not affect equities severely.

Inflation (Finance), Inflation (Economics)

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Footsie's hopes of a 1960s revival

Article Abstract:

United Kingdom stock prices appear overvalued in terms of their price-earnings ratio, but the market could still rise. Lower real bond yields and a lower risk premium for equities could allow for higher price-earnings ratios. Debt is likely to drop in Europe as a proportion of gross domestic product, and this could lead to a drop in bond yields. Equities have also become less volatile, lowering the risk premium, and earnings could grow.

Financial markets

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Revival of Monday-Friday effect holds lessons

Article Abstract:

The performance of British stocks is examined on a weekly basis and changes are found which repeat themselves each week.

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