UK

17/12/2008

November saw a continuation of the volatility in equity markets, with a further raft of extraordinary developments. The market began the month on an upward trend in anticipation of a decisive US election result and further cuts to interest rates across Europe. The rally ended somewhat swiftly, however, as it became clear that central banks were having to shift from fighting inflation to potentially fighting deflation. The Bank of England made one of the most dramatic moves in this sense, with a 150 basis point cut in interest rates and a clear signal that there was more to come. Markets then spent most of the month moving lower on further news of a weakening global economy, although lower oil prices and a series of fiscal stimulus packages helped to buoy the mood. As a result, the FTSE All-Share ended the month in negative territory overall.