Sir John Redwood: No need to fear correction after December rally

Shares in main markets 'remain good value'

The markets fell away in December on fears that the main central banks will tighten monetary conditions too far and cause another recession in the advanced countries.

The US Federal Reserve is leading the movement to reduce the amount of created money used to buy up bonds  by reducing its balance sheet as the debts are repaid. It is adding to the tightening by raising interest rates simultneously. Meanwhile, the European Central Bank has ended its bond buying programme, and the Bank of England has stopped quantitative easing as well as raising interest rates. China too is seeking to clean up some of its bank balance sheets and is restricting credit availability. The Italian budget rows also worried some investors, as the EU sought to impose more finan...