The three-cornered fight over Footsie

Article Abstract:

UK share prices could be affected by the US stock market and by UK tax and interest rate policy. There is also a debate as to whether stocks are overvalued and this depends which measure is used. A change in advance corporation tax could hit stock prices, though the market may have taken this factor into account. The government has given independence to the Bank of England in setting interest rates and this should lower inflation expectations, and help stock prices. Thereis still concern that inflationary pressures are too great and interest rates could rise enough to depress stock prices.

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Fears misplaced

Article Abstract:

UK equity prices are not likely to drop sharply as a result of changes in the tax treatment of dividends by a possible Labor party government, argues Lehman Brothers' Ian Scott. A previous reduction in dividend tax credits did not result in underperformance for UK shares. Pnesion funds reduced holdings, but this could have been for other reasons related to risk. Earnings measures also appear to provide a better indicator of stock trends than dividends.

Taxation, Securities, Securities taxes

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