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OPINION

A year to remember

A year to remember
December 20, 2013
A year to remember

The gains look justified on valuation grounds, too, as financial markets return to some form of normality after enduring a rollercoaster rise in 2011 and 2012, when flare ups in the eurozone and risks of a US debt default sent risk aversion and the equity risk premium rocketing.

However, the absence of a sovereign bond default by the heavily indebted periphery southern European countries, coupled with strong economic data emerging from both the US and UK, has put a rocket under equity prices on both sides of the Atlantic as investors bet on the recovery proving sustainable. Earlier this month, the Office for Budget Responsibility upgraded UK economic growth forecasts to 1.4 per cent for 2013, much higher than the anaemic 0.6 growth it predicted in March, and now expects 2.3 per cent GDP growth in 2014, a full 0.5 percentage points higher than only nine months ago.

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