FTSE gets off to subdued start

UK chancellor George Osborne is due to update the markets today on how the UK is managing its economic recovery.

It is unlikely that markets will have too much of a surprise from the chancellor as almost everything that he is likely to say in today's speech has already been leaked to the press; chiefly that the UK is on the road to recovery although still at a fragile stage.

This follows on from last week’s speech from governor of the Bank of England Mark Carney, who stated that interest rates are unlikely to rise before the second half of 2016. However, the markets will be taking what is said with a pinch of salt as they will be conscious of the political aspects.

As the week begins, traders will be aware that we are now moving back into the more heavily-traded part of the year. The FTSE made heavy weather of moving higher last week and only just managed to stay ahead of the 50- and 100-day moving averages. The bullish momentum from late June to early August looks well behind us now, as issues surrounding US quantitative easing tapering and the debt ceiling threaten to curb enthusiasm.

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