The Bank of England left its asset purchase program intact at 200 billion pounds and held interest rates at 0.5% on Thursday, as widely expected. Policymakers indicated they are likely to stay on hold until at least February when they will get their new growth and inflation forecasts and the scheduled asset purchases run out. It could be a while before policymakers feel confident enough about growth to start raising interest rates.

The economy is now showing signs of picking up again, house prices are rising and forward-looking surveys point to an ongoing recovery in activity, suggesting Britain will pull out of recession by the end of the year.

China has shown further signs of economic recovery with its industrial output surging and its export slump easing. Consumer prices also grew year-on-year in November for the first time in 10 months. The index rise of 0.6% beat expert expectations of rise of 0.4%. Industrial output rose to its strongest position since June 2007. November’s year-on-year fall in exports of 1.2% was the slowest of 2009, although growth had been expected. Imports rose 26.7% in November from a year earlier.

The trade surplus narrowed to $19.9bn in November compared to $24bn in October. The latest figures generally exceeded the expectations of economists who thought output would rise by 18%. Instead it rose by 19.2% in November compared to 16.1% in October. The National Bureau of Statistics (NBS) said that retail sales were up 15.8% in November compared to the same time last year.

The UK market and the European markets have opened in positive territory. US futures markets are pointing to a positive start to trading with the Dow opening up 46 points.

© Brooks Macdonald Asset Management 2009

Sources: Reuters: BBC, Bloomberg, Lawshare, Deutsche Bank (db), Proquote, Financial Times, Wall Street

Journal, CLSA, Sharescope, Market News, Capital Economics, CNBC, Wikipedia.

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.