UK equities: Can it get any better from here?

Market expectations benign, says Wharrier

While the recent stockmarket volatility has been uncomfortable, it belies a more benign economic environment in the UK.

Cashflow for UK households is more buoyant than it has been for some time, with the growth in disposable income now approaching levels not seen since the 1990s on the back of significant falls in the oil price and lower mortgage rates. The question for investors is whether it can get any better from here? Market expectations of the speed and scale of interest rate rises over the next few years are benign. While this is realistic given low levels of inflation, should the economy overheat, rising interest rate expectations will impact the performance of many consumer sensitive companies...