Frikkee believes that the barely-there inflation being seen in the UK combined with the decent wage growth is giving people more money in their pockets, which translates into consumer spending very reliably.
The danger with this however, as Frikkee acknowledges, is that if deflation continues or even deepens it could tip the UK consumer in delayed purchasing territory. In other words, they do not want to spend despite having spare money becuse they think goods will get cheaper if they wait.
Frikkee argued that this risk and others can be managed and ultimately overcome however through a combination of carefully monitoring the economic data and shrewd stock picking. Fund managers need to avoid the likes of Burberry and zero in on the companies that do not draw much revenue from outside the UK. British travel companies selling to the domestic market are a good example of this, she said.
There are other bright spots in the UK picture according to Frikkee, so it is not the case that everything hinges on discretionary consumption. UK property is looking attractive she said, and she has sought to play this by investing in British Land.
