We live in an ‘Alice in Wonderland’ world where good news is bad news and vice versa. You would think that markets would welcome American economic recovery meaning that the artificial economic stimulus known as Quantitative Easing is no longer required, and that further government intervention would be seen as a bad sign that the economy is sick. However, the suggestion that QE may be gradually withdrawn has sent markets cold turkey.

I remain concerned that our banking sector remains unreformed and incapable of supporting economic growth. UK banks are still about four times the size of our economy, which suggests there is some way to go to rebalance it. In addition, the Co-Op Bank needs re-structuring, Nationwide faces a £2b funding shortfall and it is unclear how the taxpayer will recoup its money on RBS. It is worrying that even now our banks are struggling to meet the new capital rules which only require them to be able to withstand a fall of 3% in the value of their assets.

Of course, there are other worries too, with the Greek government in fresh turmoil and problems in many developing countries, such as riots in Turkey and Brazil, concerns with the Chinese economy and the Indian rupee hitting an all-time low against the dollar.

This presents a challenging backdrop for Canadian, Mark Carney, who takes over next week as the new Governor of the Bank of England. He has an immense task balancing the control of inflation with an employment and growth agenda, as well as ensuring financial stability. Ice hockey is his passion and he will certainly need the speed and agility of an ice hockey player to impress.

However, it is important to keep the bad news in perspective. Construction, services and manufacturing are pointing to an improvement in the UK and a pick-up in exports outside the Eurozone is encouraging too. Fortune favours the brave and the first lesson of investing is to buy low. The latest market dip has presented some compelling opportunities in both developed and emerging equity markets. Other investments, such as infrastructure and farmland are also attracting interest as demand for cereal is forecast to grow by 50% by 2050 as the world population increases by another 3 billion people. Over the longer term, this should be good news for farmers and associated industries in the West Country and beyond.

[Matthew Clark, Western Morning News, 27 June 2013]