Andersons - Tax & Investment Services

THE LATEST PERFORMANCE BY AUSTRALIAN SHARE FUND MANAGERS IS THE WORST IN YEARS.

The U.S. economy is now operating well below potential. This will begin to gradually push up the unemployment rate. This extra slack in the economy will put further downward pressure on core inflation, which Global Insight expects to fall from 2.0% this year to 1.8% in 2008 for the core personal consumption deflator and from 2.3% to 2.1% for the

core CPI. The good news, so far, is that high energy prices have had very little impact on other prices and on wage inflation. This benign state of affairs can be expected to continue for at least another year.