The sigh of relief as the FTSE 100 crept back over 4,500 last week was audible, even in Suffolk where my recovery continues on track. The better underlying tone that has been developing has been particularly welcome. The fact that share prices slipped below this landmark almost immediately afterwards hardly seemed relevant as attention was focused on the deliberations of the monetary policy committee.
It seems most consumers still view the current cost of money as a bonus, not a reflection of a low-inflation world. Judging by the way in which personal debt is piling up, most must consider recent rate rises as a short-term phenomenon. They should start paying attention to what is happening in the wider world. Property is still gripped by a buying frenzy if last week's figures from Halifax are any guide. The MPC's main concern may not centre on house price inflation but a rise of 20 per cent year on year is difficult to ignore.
More important, as far as the MPC's decision was concerned, was the buoyant message from the manufacturing industry. Not only was the Engineering Employers' Federation able to report the fastest rise in output and orders for seven years but there were many in the industrial world expressing understanding that rates may have to go up if a proper balance is to be maintained. One leading economist stated that since rates were clearly heading for 5 per cent,it would make sense to move them there in one fell swoop.
In the event, the MPC chose the easy option of a further quarter-point rise. But there is a growing body of opinion that it should have acted earlier, despite low interest rates in Europe and the US. This is all fine-tuning and it will be months, if not years, before we can judge the efficacy of policy.
Elsewhere, it was with a sense of nostalgia that I looked at the results of the Thomson Extel awards, viewed as the City's equivalent of the Oscars. As a fund manager in the 1980s, I contributed to a survey that could determine how big your bonus was at the end of the year if you were an analyst. Switching into broking ahead of Big Bang (albeit on the retail investment management side), I was proud and fortunate to be a part of the number-one research house. James Capel ruled the roost in those days. Not only has its star faded but the name has disappeared, lost within the vast empire that is HSBC.
Poll position this year was held by Swiss giant UBS – best broker for equity research for the fourth year running. Other City behemoths emerged as winners in various categories, with Smith Barney Citigroup, Goldman Sachs and Deutsche Bank all walking away with coveted awards. As for the fund manager of the year, there can have been few surprises that Fidelity sat at the top of the tree.
We are not suffering quite the problems in our research operations in this country that have arisen in the US. That is not to say that change is not inevitable. Unbundling services, making what fund managers are really paying for more transparent and delivering greater clarity in the exact nature of services provided are laudable aims. As a judge recently remarked, Chinese walls cannot be considered as unbreachable, no matter how well intentioned those who have put in place the checks and balances. Still, with increasing emphasis on collective investments, surveys like these enjoy only a limited audience. They remind me of a world that has changed out of all recognition – as, perhaps, have I.