Why investors should feel bullish about the UK

clock • 2 min read

While the UK economy has recovered markedly since the financial crisis, UK GDP growth is set to slow. GDP growth was 2.2% in 2015, and is now forecast to slow to 1.8% in 2016 and 0.9% in 2017.

The quadruple deficit; 4% government spending deficit, 6% current account deficit, 1% corporate spending deficit and 1% household deficit renders the UK economy fragile. The result is likely to be a constrained fiscal package by Chancellor Philip Hammond and continued sterling weakness. However, this is not all bad news for UK equities as seldom is GDP growth positively correlated with stockmarket movements. Investors are usually much more concerned with inflation projections, interest rate and currency movements and earnings revisions. In this respect, investors should feel more b...

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