Earnings momentum to fall over next 12 months

UK GROWTH

Earnings momentum is strong across the board at the moment.

Having cut costs throughout the downturn, companies are now geared to recovery and enjoying better margins. However, this momentum, which started from a very low base, is likely to reduce over the next 12 months, as expectations become more aligned with what companies are actually delivering. This environment will reward a focus on genuine growth companies. Some of the heavily cyclical exposure such as mining and industrials may run out of steam, and we are looking to tilt our portfolios elsewhere. The growth outlook for the UK is not good for the medium to short term. The upcoming em...