Positive signs for global economy says expert

IMPROVED sentiment, which has seen financial markets including the FTSE 100 take rise sharply in the last month, are being underpinned by improved confidence in the US and euro zone, a top analyst has said.

Guy Foster, head of portfolio strategy at investment management firm Brewin Dolphin said there positive signs of growth in the US, particularly in its housing and construction sectors, have been underpinned by the Federal Reserve’s $80bn a month cash injection.

In Europe meanwhile, European Bank supremo Mario Draghi’s comments last July that he would do “everything possible” to save the euro, had Mr Foster said: “Removed the big risk of last year – the speech has under-pinned Europe.”

While new found stability in Europe has heartened investors, it has not brought economic growth. This is said was only present in the US, China and other fast-growing international markets.

He said there was little evidence that governments’ quantitative easing measures were driving up the rate of inflation, with commodity prices not rising “that much” in the US over the last 12 months despite record amounts of money being pumped into the economy.

Turning to the UK he said the outlook was “relatively uninspiring”, with savers continuing to be affected by low interest rates.

Event though Brewin Dolphin has forecast that the FTSE 100 will close 2013 at 6350 – and it is already up to 6270 – he said he would not be increasing this figure while uncertainty remained over the so-called US Fiscal Cliff..

“We saw modest good news at the end of December, but until that debate in the US Congress has taken place, we’re not going to change our forecast.”

Mr Foster was speaking at an event at The Point at Lancashire County Cricket Club last week organised by Brewin Dolphin’s Manchester office.

Other speakers included former professional cricket turned performance coach Jeremy Snape and Master of Wine Conal Gregory.

Mr Snape, whose clients include Australian cricket legend Shane Warne, said business people could learn much from leading sporting figures.

He showed video clips from Lord Coe, British cycling chief Sir David Brailsford and Sir Matthew Pinsent, all underlining his message that: “There is no  short-cut to success; it is vital to have a clear strategy and set targets towards achieving goals and that businesses need to focus on both process and performance.”

Mr Gregory, a former MP, said would-be wine investors should tread warily, because the sector is unregulated and there are a number of fraudsters looking to take advantage of novices.