Simon Murphy, head of UK large cap equities at Old Mutual Global Investors for one, remains a somewhat cautious on the outlook for equities from here.
“Post Brexit and then post the election of Trump there has been an incredible move in equities. The first move was predicated on the fact that, as yet, Brexit has not caused too much harm, while the Trump rally was built on expectations that he will succeed in breaking the gridlock in Washington,” he said, “Both expectations may well turn out to be true, but I think it is a bit brave and a bit early.”
The jury remains out on the full impact Brexit will have on Britain, but there is little doubt that the country will be in a stronger position economically if it nails all ten points of its new industrial plan. But, such a plan will take time and its chance of success is diminished by the slowing of skilled labour force growth that will be accompany Brexit as companies and universities find it harder to attract talent.
And it is not just within the skills development plank that bedevilled details reside. Trade too provides a good case in point.
There are liable to be a great number of words written in the next few days about Prime Minister Theresa May’s upcoming meeting with new US President Donald Trump; what a good deal on trade would look like and just how special the two countries’ relationship will turn out to be. It is a nice sentiment, but the realities of international politics are such that, even if the relationship is ‘best relationship in the world’, it can only really bear fruit once the UK has extracted itself from the EU, at which time Trump may not even be president. And, even if he is, his much-repeated plans to put America first would seem at odds with May’s determination that a ‘global Britain’ shall put its needs ahead of others.
