How confidence and capex are creeping back in to markets

ON UK GROWTH

Corporate confidence is returning and capex is starting to creep back in to the system - both of which bode well for the UK economy, explains Canada Life Investment's Nigel Kennett.

Up until now, much of the rise we have seen in UK equity prices has been driven by multiple expansions, with growth in general corporate earnings so far proving modest. Confidence However, we are now beginning to see evidence of increased corporate confidence, in addition to improving consumer confidence, which we think will eventually boost earnings. In its report for the three months to 31 March 2014, recruitment agency Hays reported a 25% increase in the number of permanent jobs with increases across all regions of the UK. This is significant because, when an economic cycle t...