Temporary price lull
Article Abstract:
The UK saw an underlying inflation rate of 2.8% for Jul 1995, less than had been forecast, but inflationary pressures are still apparent. A drop in potatoe prices helped keep the inflation rate low in Jul 1995, but potato prices look set to rise due to hot weather. Retail price rises have been subdued due to consumers' reluctance to pay higher prices. Consumer spending could rise in 1996 if fiscal policy is relaxed. There is less pressure to increase interest rates but the pressure still exists.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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UK equities: inflation hits shares
Article Abstract:
UK equities may not provide protection against inflation in the short term,since share prices may fall as inflation expectations rise. Risk premiums sought by investors arehigher, and dividend yields rise when expectations are for rising inflation. This trend was seen inthe 1970s, but shares can provide better protection against inflation than cash or governmentbonds. Inflation is starting to rise in 1995, and could reach 3.3% by year-end 1995 and 6% byyear-end 1996, according to UBS.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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A limited head for heights
Article Abstract:
The UK stock market has been less buoyant than that of the US in Jun 1995, and this could be linked to political uncertainty. The UK economy should support strong share prices with encouraging corporate earnings forecasts. Forecasts for interest rate rises for year-end 1995 have fallen from 8%, and inflationary pressures do not present a serious problem. There is concern that US share prices have risen too high, and they could fall, which in turn would affect UK share prices.
Publication Name: Investors Chronicle
Subject: Business
ISSN: 0261-3115
Year: 1995
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