With yesterday’s decision from the Bank of England to keep rates on hold came a certain degree of angst from commentators seemingly not at ease with the MPC’s judgement to, well, just sit and wait to see how things pan out.
Patience they say, is a virtue. Politicians on both sides of the House of Commons have led with anything but restraint in the past two weeks, and I fear this mood of restlessness is spreading to the investment community.
“As ever there are two sides to the argument. There’s the side that says the Bank of England should have cut to stimulate the economy, and the other side is that if it hasn’t cut it must be seeing slightly less worrying signs of economy slowdown than some of the doom-mongers have been predicting,” says Chris Ralph, chief investment officer at St James’s Place.
“I don’t think I can remember seeing such diverse opinions on future expectations as I have over this period of time.
“Some people are saying this could be a golden age that we could be moving into, while others are forecasting a deep and prolonged recession.”
Ralph himself is sitting on the fence, sensibly believing there is insufficient evidence to form a firm view at this stage.
Other notable investors have expressed their views with the likes of Hugh Hendry believing a recession is likely, while Neil Woodford says this is not the case.
Markets on the other hand are expressing a clear view of confidence, with the FTSE 100 in particular having reached a fresh 11-month high yesterday, though the mood is understandably more downbeat today following the horrific events in France overnight.
