Mark Marshall of Charles Stanley takes a look at the markets

The latest US jobs data has reduced, but not removed, the probability of an early reduction in the Fed QE programme and this propelled equity markets to new higher ground last week, while in the UK, a recent YouGov survey showed confidence in the UK economy rose to its highest level during this parliament.

This is likely to remain or even be bettered, providing interest rates remain at historically low levels. Higher mortgage costs could of course severely dent this optimism, which is why attention will focus on the Bank of England’s inflation report due tomorrow, with attention being paid to any kind of “forward guidance” on rate setting intentions.

The actions of central banks such as the Bank of England, The Federal Reserve, the ECB and Bank of Japan have promised to ensure monetary conditions remain as supportive as possible, but has served to remind us of the extent to which future returns from financial markets are entirely down to central bankers’ monetary largesse. The danger for all investors is global monetary conditions could be about to tighten on the back of economic recovery, marking the start of the long road back to policy normality. But July saw risk appetite make a welcome return and there has been ample evidence of a rotation out of bond funds into equities. Should the new Governor of the Bank of England, Mark Carney, signal that rates will stay low for an extended period, it may well encourage more factory investment and consumer spending and allow the economy to achieve the “escape velocity” necessary to withstand the withdrawal of monetary stimulus when it comes.