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Beecroft: Why I'm optimistic about UK Plc

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Two key reports out in the UK this Wednesday - the Bank of England's inflation report and the Office for National Statistics' Employment figures.

First to the employment numbers and Nick Beecroft, Chair of Saxo Capital Markets, says the key takeaway is the improvement in average wage earnings which have beaten expectations. Unemployment is also down although productivity hasn't moved much.

Sterling has been in a honeymoon period since the UK election. Nick says the BoE's quarterly inflation report suggests the idea of a rate cut has all but disappeared and that should help GBP. He thinks it can appreciate against the Euro and says it could visit 0.7 in EURGBP. But he believes the US dollar is likely to strengthen and this could affect Cable. He says GBPUSD could be under 1.50 or 1.45.

Nick has also suggested that the FTSE could move about 8,000. He thinks that a 10% rise is still a possibility although UK companies are now more at the whim of international markets.