Why the consumer may surprise

UK INCOME

A key question for investors is whether the UK equity market can make headway given the macro backdrop.

In short, I think that companies less sensitive to the economy will continue to deliver decent returns, whereas more cyclical sectors are likely to struggle as it is clear that the global economy has slowed down. One area where I am now more positive versus consensus is UK consumer spending. I think this could surprise positively next year given the falling fuel price and declining inflation. UK retailers such as Tesco, Marks & Spencer and Debenhams will be beneficiaries of this. These companies are already high yielders with attractive valuations and their dividends have scope for furth...