Cyclical downturn to be relatively mild

In common with the previous year, 2001 proved extremely challenging for investors in the UK equity market. Growing pessimism over the state of the global economy and a marked deterioration in the earnings background have been the principal factors behind equity market weakness. Indeed, interest rate reductions in the US, UK and Europe failed to provide much of a reprieve, as these were taken as renewed evidence of the severity of the downturn. Even prior to September's terrorist attacks on the US, the risk of recession in the US appeared to be growing and following the attacks, the conse...