The past few months have been characterised by a tempering of any enthusiasm over potential interest rate cuts. But in recent days central bankers appear to have softened their stance. For investors, any move on rates is likely to bring with it growing risk appetite. There is an argument that Europe could be in prime position to benefit.
In a recent report, Oxford Economics said businesses and investors may be underestimating the potential fillip to the global economy from a further easing in inflationary pressures and consequent rate cuts. It adds: “Against a backdrop of rising caution over the pace of central bank policy easing, our scenario analysis suggests faster-than-expected interest rate cuts would generate a gradual but sizeable economic boost. In our scenario, the rapid pace of policy easing fuels a rebound in capital expenditure and asset market gains.”
JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.
