Muted domestic growth likely as spending is squeezed

ON UK INCOME

LEIGH HARRISON, co-head of UK equities at Threadneedle on UK Income

Next month’s spending review will provide the detail on what we know will be a tough set of measures to bring the government’s finances under control. As the cutbacks and tax hikes bite, a period of muted domestic growth seems likely as government and consumer spending are squeezed. However, the stock market is not the same thing as the economy and investors with long memories will remember equity markets are capable of rising during difficult economic times. This is likely to be the case in the years ahead. This optimistic view reflects our belief good companies can progress in diffi...