Stopford said the conversation around ‘no deal’ versus a ‘bad deal’ could still be plagued with uncertainty, depending on the seats she has around her.
Drawing the comparison with the referendum, Lancioni says: “The UK economy performed relatively strongly in the nine months following the Brexit referendum.
“Weaker sterling helped exporters, and consumers brought purchases forward to beat rising inflation.
“But data has softened over recent weeks, and rising uncertainty over the Brexit process, not to mention a growing prospect of a big delay or breakdown in negotiations, could further dampen consumer and business confidence.”
In the face of so much uncertainty, it seems both corporates and individuals have been keeping their purses closed.
Following a downward revision to Q1 GDP, amid recent suggestions that car sales have slipped, property transactions have dipped and consumer spending not being as strong – the economy is slowing.
While Birrell said it is unknown how much of that is specifically attributable to the election, he can see a logic.
“I think what you will find in that environment – especially if the Tories only had a 1% lead in the recent polls – is that whether you are a corporate or an individual and you are worried, you will do nothing but defer your spending.
“You won’t buy that car if you think your tax rate is going to go up. If you are a company, whose corporation tax is about to increase to 26%, you won’t make a spending decision. That does feed through and dose make a difference.”
Birrell said while utilities and banks are the obvious sectors that might come under scrutiny, it is more cyclical stocks that could swing further.
Stopford said he has just tried to “avoid playing”. They have no UK gilt exposure in the multi-asset fund, with dollar, Australian and New Zealand dollar favoured in fixed income – all hedged back to sterling.
On equities, he only has around 7% exposed to the UK, with a bias towards exporters.
