The big question is whether, in voting for Labour, investors are also voting for higher inflation

Article Abstract:

There are mixed views in the UK about whether a Labour party victory in the forthcoming general election, which seems very likely, will eventually bring higher inflation. Some observers believe that inflation is largely a thing of the past, with powerful forces now eliminating it from the economic system. The likely impact of a low-inflation environment should be considered very seriously by those planning their finances and future savings. However, it is also worth being aware that financial markets are still concerned about a possible return to rising inflation.

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Inflation could still spoil the party

Article Abstract:

Rates of return for UK investors are likely to begin falling soon, according to the Pension Fund Indicators annual survey of the investment climate from PDFM. Pension funds achieved average return of around 11% on their assets in 1996, with total assets at 566 billion pounds sterling. PDFM believes that over time returns must drop, although there is no clear indication of when this may take place. Pension funds' annual rate of return is likely to fall by 0.75% as a result of reducing the ACT credit on dividends.

Finance, Pension funds

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A good start to life under Labour

Article Abstract:

Financial markets in the UK have reacted positively to the Labour party's recent general election victory. This is mainly because Labour gained a large majority, thus bringing the prospect of political stability. The new government seems committed to keeping the budget deficit under tight control, and this should create a favourable climate for investors. However, there will be a number of key tests of the government's credibility, including whether corporate tax levels will be raised to boost public finances.

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