Article Abstract:
UK share prices may perform poorly in 1997, according to Goldman Sachs. Valuations are not justified at a mature phase of the economic cycle, and UK interest rates could rise by 1.25% in the nine months from Dec 1996. Share prices tend not to rise when interest rates rise unless there are countervailing factors such as undervalued shares. Some sectors could perform well such as those geared to the domestic market, since pound sterling is likely to be strong. The performance of other sectors such as utilities will be affected by government policy and exisitng valuations.
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Article Abstract:
UK share prices could benefit from an increase in liquidity and low interest rates during the months from Mar 1996, according to Societe Generale Strauss Turnbull. Takeovers are also likely to be encouraged by low interest rates. Mergers may take place prior to an election in case more controls are imposed on mergers following the election. The UK market does not appear likely to crash but share prices could weaken later in 1996 if monetary policy tightens, and due to concern over a forthcoming election.
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Article Abstract:
United Kingdom interest rates could be cut in April 1999 due to weak growth in gross domestic product and low retail price inflation as well as rises in unemployment and the value of pound sterling. A cut in interest rates may not help stock prices, especially if the rate cut is the last for the interest rate cycle. Expectations of lower rates tend to help stock prices, and low rates alone will not help stock prices. The UK is expected to undergo an economic recovery, so rates will rise again.
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