Tuesday, November 21, 2006

The economy holding up well

The FTSE is up: oil prices have rallied to strengthen the oil companies and other companies are showing robust results, manufacturers are seeing a rise in orders.

All this still looks fragile to me. Manufacturing orders are only rising slowly back to their summer levels and the FTSE is still highly dependent upon strong performances in the rest of the world; an international cold might still give us a fever. I expect this good news will be used to justify a rise in interest rates some time soon but hopefully that rise will be modest. The manufacturers, in particular, look vulnerable.

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