David Bulteel

“Equities proved vulnerable to continued rises in oil prices and interest rates, prompting profit taking in markets which had become complacent. The sharp volatility in May has since moderated, although it is too soon to assume that the correction is over. The inflation risk appears modest, suggesting that interest rates should not have to rise significantly further. It could take time for the inflation and growth numbers to give reassurance about the 2007 outlook, but equity valuations and merger activity are supportive factors.”