Performance Enhancement

Alongside world records being smashed by elite athletes in Rio de Janeiro this week, the UK Equities market is setting records of its own. The FTSE 100, up 11% so far in 2016 to close last week at 6,916 is at its highest level in 14 months. So what is behind the performance burst? No doubt monetary policy measures intended to drive down the returns on bonds, and cut interest rates to record lows have served to stimulate demand. Alongside QE, the value of the pound also dropped, boosting overseas earnings. In an interesting twist, one of the Bank’s most notorious hawks, Ian McCafferty, now states that he believes rates could go even lower in upcoming months. Well, well, well…do I hear 7,000?