A Market In Decline?

The economy is generally regarded as being in a pretty healthy state with a combination of steady growth and a low rate of inflation. Interest rates remain relatively low and are forecast, in the long term, to fall. The dot.com phenomenon has significantly depressed valuations of the companies in what is now deprecatingly called ‘the old economy’. Banks and venture capital companies are flush with cash and are apparently keen to invest. The only blot on the landscape (ignoring recent concerns about the effect of the Chancellor's spending plans) is the high pound. Therefore, management teams of strongly performing ‘old economy’ businesses could understandably believe that now is as good a time to do an MBO or MBI as there has ever been.