UK equities: gloomy

Article Abstract:

UK equities have risen in 1997 due to a general rise in share prices world wide. The UK market itself, argues BZW, has limited attractions. Earnings expectations have been downgraded and this is likely to continue if pound sterling remains strong. Equities are relatively expensive in terms of gilt/equity yield ratios. There could be an improvement for UK equities after the 1997 election, if fiscal policy is tightened. This would allow for low interest rates and pound sterling would be able to fall. There is no certainty that fiscal policy will be tightened, so there is uncertainty over the performance of equities.

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The real reasons for Footsie's budget apathy

Article Abstract:

The prices of stocks from companies in the FTSE 100 index has not responded from changes to be introduced in the United Kingdom Mar 1998 Budget which could ultimately benefit stocks. The government aims to persuade people to move from welfare into work. This measure should increase the labor supply so permit more growth without a risk of inflation. Such policies can take a long time to work, which is one reason why stock prices have not responded. There is also a need for skilled workers and the government's measure may not tackle this problem.

Labor market

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UK: the bulls' failure

Article Abstract:

The UK stock exchange has been affected by uncertainties over UK economic policy, and this applies especially to the tax policies to be announced in the Budget in late 1995. Political pressures are for tax cuts, but economic pressures are to keep taxes unchanged. Forecasts of economic growth for 1996 are likely to be lowered from 2.8% A reduction in interest rates will increase the difference between long-term interest rates and short-term rates.

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