Priced-in negatives a plus for UK economy

ON UK GROWTH

There is no question we are facing uncertain times in the UK, with public finances in poor shape and with the general election just around the corner.

We feel the perception has been overly negative on the economy relative to other G7 nations, with too much attention on the fiscal deficit and government finances. These negatives are now largely priced in, and sterling’s recent depreciation appears to be stimulating the economy and the market. We have also witnessed significant upgrades to earnings following an encouraging reporting season, and data suggests a more positive outlook. While the media focuses on the potentially drastic public sector cuts, businesses in the private sector are quietly exploiting their relative strengths. Exa...