Companies with pricing power are in a strong position

ON UK GROWTH

Liontrust's Anthony Cross explains why he is optimistic about intellectual property-rich engineers and global services companies.

The UK economy continues to offer a challenging environment both for companies and investors. The Bank of England has cut its growth forecast for 2011 and retail sales weakened in June as consumers reduced spending on food and clothes. Weakness in retail sales should not be surprising given that most consumers have been hit by a cut in their real wages, with the rate of the annual consumer price index reaching 4.5% in April. Indeed, April was the 17th month in a row inflation was at least one percentage point higher than the target. We have little exposure to retailers, leisure compan...