I think the notion of inflation will start penetrating and I assume it will start showing up in the statistics. Also the UK GDP is slowing down as we enter a period of stagflation, which in general terms is a killer to financial assets.
Short term the mania is to strong to be influenced by anything.
BWDIK
Haim
From Bloomberg
London, Dec. 22 (Bloomberg) -- Britain's economy expanded
less than first estimated in the third quarter, easing pressure on
the Bank of England to raise interest rates, a report showed.
Gross domestic product in Europe's third-largest economy rose
0.8 percent from the second quarter, down from an initial estimate
of 0.9 percent, the Office for National Statistics said.
Manufacturing companies made more goods than previously
estimated though sales of services, which account for two thirds
of economic output, rose less than previously reported, casting
doubt on concern that the economic expansion risks sparking
accelerating inflation.
''It may be enough for the Bank of England to hold off until
February before raising interest rates,'' said Mark Miller, U.K.
economist at Morgan Stanley Dean Witter.
The yield on the U.K. benchmark 10-year government bond rose
9 basis points to 5.412 percent, suggesting investors are worried
that interest rates will rise eventually. Minutes of the latest
Bank of England meeting on rates showed that policymakers voted 6-
3 to hold the benchmark rate at 5.5 percent. Analysts said the
vote raised fears of higher rates because it suggested some
policymakers wanted to raise rates despite the risk of liquidity
shortages over the millennium period.
A separate statistics agency report showed that Britain
posted a larger-than-expected deficit on its current account in
the third quarter.
The shortfall of 2.8 billion pounds ($4 billion) compared
with a deficit of 2.9 billion in the second quarter and was larger
than the 2.3 billion pounds expected by economists.
The increase in national output in the third quarter followed
a 0.7 percent gain in the second quarter and took the annual
growth rate to 1.9 percent, up from 1.6 percent. The economy grew
faster than previously estimated in the first two quarters,
pushing the annual rate in the third quarter up from an initial
estimate of 1.8 percent. |
