Commenting on the hung parliament outcome of last Thursday’s general election, Woodford said that in his view, “economically not a lot has changed” and “in some respects, the outlook for the UK economy has actually improved.”
In fact, the Woodford Investment Management chief revealed he remains more cautious on the outlook for the global economy than he does the domestic market, despite “an increasingly bearish consensus.”
The rosier picture is due in part to the prospect of a looser fiscal strategy, which will be positive for UK economic growth, Woodford argued.
“Theresa May does not have the mandate that she had hoped for – that, in my view, will mean that the new administration will embrace a looser fiscal strategy going forward – borrowing more and spending more.”
Furthermore, Woodford believes the outcome of Thursday’s vote could result in a softer Brexit, if the Tories are able to successfully form a coalition with the Democratic Unionist Party.
“In wooing an alliance partner, the Tories will have to offer some concessions and I would imagine the DUP will be keen to secure an open border with Ireland as an important part of those negotiations.
“Membership of the EU Customs Union could be seen as a minimum requirement if a deal is to be struck with the DUP and, in turn therefore, the probability of a softer Brexit outcome has risen.”
Old Mutual Global Investors CEO Buxton struck a similarly optimistic tone on the UK’s prospects moving forward.
