The downside to a low exchange rate - higher inflation - has never been much of a problem for the stock market. If anything, equities thrive on inflation. Yet you had to wonder, as share prices romped ahead again last week, whether the market has not run just a little ahead of itself.
Since the scales fell from the Government's eyes and it decided to withdraw from the ERM in mid-September, the FT-SE 100 index has risen nearly 500 points - almost 20 per cent. The outlook for corporate Britain has certainly improved but surely not by that much.Reuse content