Positive outlook but rates likely to rise

By Robert Waugh, a fund manager at Edinburgh Fund Managers The past few weeks have been quiet in the market - the level of stock rotation continued, with cyclicals outperforming and defensives underperforming the rising market. One key event was the level of equity issuance. Vivendi sold £1.5bn of BSkyB and Kingfisher announced a potential £2bn rights if it can get the go-ahead to buy out the balance of Castorama. The Bank of England inflation report in mid-May was a little more hawkish for inflation, with the expectation of the UK returning to above trend growth over the next...