Comment: Sterling and oil prices | Wizz Air

Martin Flanagan

AFTER making good progress earlier in the year, the London stock market looks set to come under increasing pressure in the coming months. Even now the FTSE 100 is only trading roughly where it started 2014 following a 14 per cent rise in 2013 and anticipation earlier this year of a broadening British economic recovery.

Two things have spoilt the party-ish atmosphere. The white smoke from the Bank of England is that the first interest rate rise is likely sooner than financial markets expect – to be presumably followed by further baby-step rises; and the escalating violence in Iraq.

The result has been surges in the value of sterling and oil prices, both not good for business earnings, in particular exporters, and that will cloud investor sentiment. Just because something is predictable, however, does not make it avoidable.