During the third quarter which has just ended, the FTSE 100 index did actually reach a 14 year high.

However, the period ended on a slightly duller note as the market fell nearly 6% over the last two weeks of September; this despite strong economic growth figures and the fact that Scotland agreed to remain part of the UK.

Although the current rate of economic growth is the highest among the G7 countries, most commentators feel that it is quite likely to slow over the coming months. A recent CBI survey showed that export orders have deteriorated sharply, mainly due to the strength of sterling and the perennial problems in the eurozone. In addition there have been concerns about Asian growth due to recent weaker data from China.

The other source of a potential slowdown is the housing market, with mortgage approvals having dropped by over 15% since the beginning of the year. Several housebuilders have also commented on the fact that, following a period of rapid activity, conditions are starting to return to normal.

In spite of this, it still looks likely that the UK will be the first of the “developed” economies to start to raise interest rates.

There has been a recent shift in the views of the Monetary Policy Committee (MPC) with the ending of four years of unanimity and two out of the nine members voting for an increase

Mark Carney, the governor of the Bank of England, has indicated that there is more than likely going to be such a move next Spring.

: : Charles Sylvester is an investment manager with Charles Stanley & Co in Ipswich.