Despite Jean-Claude Juncker’s recent warning that “the French spend too much money and spend it on the wrong things”, such political “jostling” and a “disappointing” eurozone labour market report did not seem to trouble investors, Ralph said, with a record $6.1bn flowing into European equities last week.
German economic growth is also gaining momentum, with Angela Merkel’s party winning two bellwether regional votes.
As investors appear less fazed by politics – even so close to the UK’s imminent snap election – and remain committed to seeking out growth and earnings, Ralph warned that even though the Bank of England voted to keep interest rates on hold, ”UK prices would outpace earnings in the coming year due to the referendum vote – causing real incomes to fall”.
