Risk-on/ risk-off

The UK equity market has been rangebound since the highs of April this year. While horribly frustrating, the market action we have endured for the last six months or so is understandable. It reflects the tug of war between those who see the global economy as poised to lurch back into contraction, and those who take the more positive view (in which group we would include ourselves), that the global economy can expand at a rate not far below trend as we move into 2011. Of course, developed world economies continue to face a range of challenges which will constrain the speed at which they c...