Our UK outlook has been steadily downgraded over the last 12 months.
We have seen real wage growth turn negative amid high consumer credit levels and low savings, and this is weighing on consumption, which is a key driver of UK GDP. Our more bearish outlook has led us to reduce our UK exposure in aggregate, particularly towards sectors heavily dependent on domestic earnings. That said, equity valuations for UK domestic companies are not looking expensive, with many of the aforementioned risks already being reflected in share prices. 'Brexit will be an administrative nightmare - but we have still upped our domestic exposure' By way of comparison,...
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