UK Consumer Cracks Add to Rising Economic Fears
The Bloomberg’s team discussed the UK stocks on the Markets Today show TV this morning as Emma Moriarty, Investment Manager at CG Asset Management, joined us. She spent time as an economist at the Bank of England so gave us her take on weak retail sales data. She described it as a first sign that protracted elevated demand in the UK may be waning. That ties in with what Sam and Sofia have mentioned about this possibly not being all weather driven.
We’re still on the hunt for a catalyst for UK stocks, which are often described by guests as undervalued, but continue to underperform. Here’s a roundup of recent comments.
And Emma’s view:
“UK equities are extremely cheap. I think the risk with UK equities is that they are cheap today but they might be cheaper tomorrow. The two things that we would be looking for in terms of catalysts or turning points: one is interest rate expectations. They have been extremely volatile and one thing that would help with having a better gauge of UK equity valuation is some certainty around interest rate expectations. The other one is the broader question of does the UK end up in a recession because if we end up in a weaker economic activity environment that too would weigh on corporate earnings.”
We seem to always be waiting for something! In the meantime let’s see if an England football game can boost the mood. Roll on Sunday.
