Kevin Hindley, joint managing director of Fluent Money says optimism will be the key to any market improvement in 2009 and predicts that Q3 and Q4 will see an improvement in the economy.
He says: “With 2008 being one of the worst years on record, 2009 has to be better, and confidence and optimism will be central to improvement. Although there is likely to be some further deepening of recession in the early part of the year, we should see a rallying in Q3 and Q4, which could see the equity markets end the year on a net break-even.
“A strong housing market is a key indicator for a strong and improving economy. With interest rates low enough to attract first time buyers back, we should start to see prices stabilising. However, as the lower rates are taking some time to fully filter through to consumers, it will be later in 2009 before house prices stop falling.
“Similarly, inflation will continue to fall and this should help the economy. A global partnering approach to dealing with the worldwide credit crunch will see us moving more rapidly away from recession than we have seen previously, and certainly faster than in the early 90s.”