Why there is limited potential for FTSE giants

ON UK INCOME

Opportunities to make money are at their brightest when the outlook is at its worst.

Clearly, conditions are better than late 2008. However, some commentators believe prospects are now more dangerous, as scope for further fiscal or monetary easing is less likely. The latter view overlooks the impact of falling energy and commodity prices on consumers’ real incomes. Chinese CPI rose just 2.2% in the year to May; UK CPI was 2.8% to June and may continue to fall. More importantly, companies are better prepared for tough times. Up to 2007/8 businesses had grown steadily for almost a decade. They had planned for growth to continue and their finances were often stretched to...