Global economic upturn bodes well for stronger cyclical areas

Smaller companies have enjoyed a period of steady, almost uninterrupted growth in 2005, continuing the trend that has been in place for the past two years. Recent gains have come against a background of modest inflationary pressure, slowing UK economic growth, continuing corporate activity and hopes that the August interest rate cut will be followed by another before the end of the year. Signs of an upturn in global economic growth have recently enabled cyclical areas of the market to enjoy renewed strength, with economic and market-sensitive sectors such as engineering and selective fi...