Where is the upside in UK equities currently?

In tandem with global equities, the UK market has declined 16% from its April peaks. Volatility has spiked and confidence has collapsed.

Many strategists have given up on UK equities. With a record current account deficit, frothy housing market, and a labour market approaching full employment the bears wonder where the upside lays?  The UK stock market suffers from a heavy concentration of collapsing commodity stocks (declining Chinese demand and surplus supply) and bond proxies such as utilities and staples (which historically under-perform in periods of rising interest rates).  Add sterling strength hindering exports and the risk of 'Brexit' into the mix and one may rightly have sympathy with their cautious stance. ...