UK equities perform well in high-risk environment

ON UK GROWTH

F&C's Peter Lees says despite an elevated risk environment, equity markets made good progress last year and remain modestly valued.

The UK equity market fell by less than 1% last month, underperforming other major developed markets, with concerns over inflationary pressures and weaker-than-expected Q4 GDP figures causing consternation. The weakness of the Q4 figures was not entirely unforeseen given the combination of adverse weather and strikes in December, and extended Christmas holidays, impacted productivity and sales figures. The rising inflation in the UK has led to concerns the MPC is losing its credibility as it refuses to raise interest rates despite increased pressure to do so. This has an implication...