The UK equity is just 178 points away from scoring a new All-Time High – the question is whether it will soon break above the 8,474.71 peak scored on Wednesday 15th May this year.
Since then, we have endured a General Election and a market collapse in Tokyo a month ago.
The Portents Are Positive
It has been reported that the UK business confidence remained at close to its nine-year High in August, with output expectations close to record levels.
However, manufacturing has slipped over the last few months, perhaps signified by the lower figures being shown by the retail and services sectors.
Inflationary Pointers
It is now expected that the rate of inflation will soon be showing more regular easing, with prices either lowering or stabilising.
That will give the Governor of The Bank Of England his opportunity to display his fiduciary ability to cut the UK’s rates.
Interest Rates Lowering, But When?
After the Jackson Hole Statement last month, it is now clear that markets generally are anticipating a gentle easing in interest rates, possibly with the next fortnight.
Central banks usually cut interest rates in attempting to get economies regenerating.
Wage Growth Continuing
However, it has to be noted that the new Labour Government, powerfully subservient to the UK Unions, has jacked up wages and salaries for the NHS and the Railways etc.
At the same time, it is threatening a hike in Capital Gains Tax, while abolishing Winter Fuel additional payments to pensioners.
Price Of Gold Is An Important Pointer
This year the price of Gold has risen over 25% to around the current $2,533, fuelled by global investor concerns about interest rates and ongoing inflationary pressures.
It has also been pushed higher by continuing buying of the yellow metal by China and Russia, and recently by easing of restrictions allowing the Indian public to buy.
So Where Is The FTSE100 Going?
There is still some time to go before the first Labour Budget, to be delivered under the deft control of Rachel Reeves who was so respected by a former Governor of the Bank.
Starmer has already loudly warned that times are going to get rougher, before they get better – with the new Chancellor expected to put in her pennies worth of problems for taxpayers generally.
That could well be continuing good news for the bulls of Gold, but the FTSE100 as a barometer will undoubtedly gyrate, especially the closer we get to the Wednesday 30th October Budget Date.
My feelings are that investors want to see the FTSE100 at New Highs and very soon, in the hope that more positive signals can be shown.
Remember that You have to be In to Take Out!
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