The Markets

A 1964 Morris Traveller is entitled to have the occasional flashing light on her vintage dashboard. Sometimes it will quite rightly be a warning of some potential mechanical failing in this wonderfully mature motorcar, but equally with an ageing electrical system she also has the habit of producing some odd signals from time to time. So it takes some experience to work out whether it really is an electrical problem or whether she is having a hissy fit.

So when Mr Cameron came out with his statement about red lights flashing on his global economic dashboard, it gives rather the same reaction. Yes of course, at any one time there are a whole range of frightening and worrying issues which if considered for too long would keep you up well into the dark wee hours. I suspect the prospect of meeting President (Ras to his chums) Putin and considering the potential threats from that subject, along with a whisper about Japanese recession and a bit of Euro land flatulence, he was thoroughly depressed and seeing flashing warning lights everywhere.

The reality is that, at any one time, there are no doubt a long list of worries and many with far more potentially horrific outcomes, ISIS and the Ebola blight spring to mind. However, his comments didn’t really help as the one thing I expect from our leaders is some confidence that despite all the woes, our leaders have thought about how we can manage our way out of this. All he achieved as far as I see and hear from individual reactions around the country is to undermine confidence in the global economy and thus our own. I suspect though that as we are now in election mode for the next six months, we are probably being softened up for a less than enthusiastic autumn statement from George Osborne and some mutterings that our recovery is under threat. That probably won’t be his or our fault, but no doubt ‘Johnny Foreigner’s’.

Perhaps then I should respond by saying that despite some flashing and winking on my dashboard, I also see the global economy growing next year albeit at a slower level than this year, and along with it will be the UK as well. However, I also see action being taken by the Eurozone to try and get things moving, which along with the US and Japan, will help. However, being led into a murky cloud of depression will do us no good. Realistic expressions of confidence from effective leaders are what I want to see.

Source; Justin Urquhart Stewart
Seven Investment Management