Athelney Trust had a good month in July, with the unaudited NAV rising by 3.3% whereas the AIM All-share fell by 1.3% and the Small Cap and Fledgling improved but only by 0.7% and 1% respectively. According to data released by the ONS, the UK economy grew by 0.7% in Q2. This compares with 0.4% in Q1 and 2.6% against a year ago and means that the economy has grown in 10 consecutive quarters.

This pleasing data has been fuelled by a hike in the services sector and by increased North Sea oil and gas production following the tax cuts in March. Manufacturing has proved tough due to the strength of the British pound, thus denting export sales to the euro-zone. Not surprising, then, that there is talk of a rise in interest rates around the turn of the year. And yet what, precisely, is the hurry? China’s demand for iron ore, copper, alumina and other commodity imports from Latin America and Africa has slumped. The former’s economy can be divided into four unequal parts: property 25%; infrastructure 22%; manufacturing 33% and the balance made up with a number of smaller items. The first has high levels of inventory, the second earns 3% compared with borrowing costs of 7% and the third shows a slump in demand for capital goods.

This is just one reason why I believe that the timing of the rise in rates should be put on hold. Oh yes, and inflationary expectations have turned down again in America.