UK Markets Outlook Any post-referendum sterling rally to be short-lived Brexit worries have been driving sterling lower so far this year. Accordingly, a vote to “remain” in June’s EU referendum should see the pound rebound. But we think any strength is unlikely to be... 18th May 2016 · 1 min read
UK Markets Outlook MPC unlikely to wait as long as markets think We think that recent fears about a global slowdown, and hence the reaction in financial markets, have been overdone. In fact, we expect global growth to accelerate this year and the prices of most... 19th February 2016 · 1 min read
UK Markets Outlook MPC unlikely to wait as long as markets think Financial markets still do not expect interest rates to rise until the end of 2016. While we agree that interest rates will rise very slowly, we expect the first rise to come sooner, probably in the... 17th November 2015 · 1 min read
UK Markets Outlook Markets shift too far towards expecting low rates to last For many years we have argued that UK markets were pricing in too early and too fast a tightening of monetary policy. But now, markets, which currently expect the MPC to leave interest rates on hold... 27th August 2015 · 1 min read
UK Markets Outlook Markets right to expect slow monetary tightening The prevailing view in the markets that the MPC can raise interest rates extremely gradually over the coming years seems right to us. Granted, wage growth has begun to pick up and the Fed looks set to... 25th June 2015 · 1 min read
UK Markets Outlook Political risks may check sterling’s rally Although sterling has shot up by nearly 5% on a trade-weighted basis since the start of the year, there are several impediments to a further significant appreciation over the coming months. The... 17th March 2015 · 1 min read
UK Markets Outlook Super-low gilt yields unwarranted by economic outlook UK markets have taken the meaning of the word “gradual” in the Monetary Policy Committee’s forward guidance on the pace of interest rate rises to a new extreme. Overnight index swap rates imply that... 15th December 2014 · 1 min read
UK Markets Outlook Diverging rate paths to favour gilts Since the Monetary Policy Committee (MPC) is probably only a few months away from starting to raise interest rates, gilt yields are likely to depart from their three decade long downward trend soon... 25th September 2014 · 1 min read
UK Markets Outlook Will the MPC continue to anchor markets? Although the UK’s economic recovery has gone from strength to strength, markets have remained optimistic that monetary policy will remain highly accommodative for a while longer yet. Indeed, on the... 30th June 2014 · 1 min read
UK Markets Outlook Monetary policy to remain a support for asset prices We doubt that UK asset prices will be undermined significantly by the onset of tighter monetary policy in the UK or overseas. Admittedly, history suggests otherwise – the global monetary tightening... 27th February 2014 · 1 min read
UK Markets Outlook Stronger growth and low rates support UK markets UK markets are being supported by a favourable combination of accelerating economic growth, weakening inflation and very low interest rates. Granted, the MPC has brought forward to the third quarter... 20th November 2013 · 1 min read
UK Markets Outlook Gilts may yet decouple from Treasuries While yields on gilts have continued to track those on US Treasuries closely, some decoupling is still possible. For one, both central banks have tied their monetary policy to the unemployment rate... 28th August 2013 · 1 min read
UK Markets Outlook Economic weakness set to undermine equity rally The recent surge in the FTSE 100 to just shy of its all-time high has fuelled speculation that a ‘great rotation’ of funds from bonds to equities is under way. But we struggle to see how the equity... 30th May 2013 · 1 min read
UK Markets Outlook Sterling's fall not supported by economic outlook Concerns about the MPC’s commitment to its inflation target, weakening expectations for UK GDP growth relative to elsewhere and the loss of the triple-A credit rating have all weakened the pound since... 28th February 2013 · 1 min read
UK Markets Outlook Markets underestimating chances of more stimulus UK asset prices have been undermined by fading expectations of more monetary stimulus and the partial reversal of safe-haven demand as euro-zone concerns have eased. Although a cut in official... 22nd November 2012 · 1 min read
UK Markets Outlook Lacklustre growth to weigh on UK assets While UK equity and gilt prices have both increased over the last few months, we doubt that further significant price rises are likely over the coming quarters. Equities seem destined to struggle as... 23rd August 2012 · 1 min read
