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Investment analysis

A hat-trick of interest rate cuts all at 50bp by three of the biggest central banks in the world, the Federal Reserve, European Central Bank and the Bank of England, ensured that global markets in the main ended the week higher.

In the US, interest rate optimism helped investors shrug off poor economic news on Monday when the purchasing managers&#39 survey of the service sector showed another sharp fall in sentiment in October.

The Fed, as expected, cut rates for the 10th time since the start of the year, when rates stood at 6.5 per cent, to 2 per cent.

There was some cheer from networking company Cisco Systems, which reported sales and earnings above Wall Street&#39s expectations and some better news on the jobs front, where weekly jobless claims fell from 496,000 in the previous week to 450,000.

In Europe, the latest evidence of declining industrial production in Germany, Spain and the Netherlands along with weakening business and consumer confidence persuaded the ECB to act decisively, reducing rates in the Eurozone surprisingly by 50bp to 3.25 per cent. It appears rather belatedly that ECB president Wim Duisenberg has accepted that the Central Bank&#39s duty to control inflation must be balanced by concerns for the real economy.

The BoE joined in the monetary easing, giving UK industry a much needed boost on Thursday with a 50bp cut in base rates, (analysts were expecting a 25bp cut) bringing UK rates down to 4 per cent, their lowestlevel in nearly 40 years.


FSA hit by boycott as it sets out pension tables

The FSA&#39s comparative pension tables were launched last week amid controversy with Skandia Life and St James Place Capital refusing to participate.Skandia is boycotting the tables because it claims they do not offer like-for-like comparisons and ignore the impact of past performance.St James Place, which also refused to take part in the unit trust tables, […]

Not best policy

Last week, I looked at the broad tax and financial implications of investment by companies. I touched on the potentially negative impact that investment can have on business assets taper relief and looked specifically at the tax implications for income and capital gains produced by direct and collective investments such as Oeics, unit trusts and […]

Scottish Widows – Guaranteed Investment Bond

Tuesday, November 13, 2001.Type: Guaranteed equity bond.Aim: Growth linked to the FTSE 100 index.Minimum-maximum investment: £2,000-no maximum.Term: Six years.Guarantee: Capital returned in full at end of term regardless ofmovement in index.Return: Capital returned in full along with up to 7.5 per cent of growthin index every six months.Closing date: December 9, 2001.Special offer: 0.1-0.5 per […]

Fragmentation fears over LIA&#39s plans for another quality mark

LIA proposals to introduce two quality marks for tied and independent advisers have been criticised by rival trade bodies which claim it could “muddy the waters”.The LIA unveiled the quality marks, Accredited Fin-ancial Adviser and Accredited Independent Financial Adviser with identical logos except for the insertion of the word independent last week.But IFAs and providers […]

The investment clock

While Trump blazes blond in the political foreground, it’s easy to overlook the economic background to the new political dimension of 2017. Political risk will be a feature of the year: the unpredictable and untested Trump administration has already created uncertainty, which is unlikely to diminish, especially if protectionist rhetoric starts to outweigh promises of […]


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