UK Equity Income Security- The Commodity Risk

Given the substantial falls in the oil price and the possible impact on dividend paying capacity for the oil and mining sectors we have published a note looking at the outlook for income. A copy of the report is available on request. Bottom line while recent squalls may not be over we are fairly relaxed about UK equity income prospects. There is clearly specific risk in the oil and mining sectors but, for the market as a whole, this is partially offset by USD strength and the benefit that certain sectors gain from lower oil prices.

UK Consumer Spending Prospects Improving

We published our household spending model today and the outlook for discretionary spending is the strongest since the start of the credit crisis. This is driven by expectations of modestly improving real wage growth, modest tax falls for lower and middle income families, the impact of falling commodity prices and a subdued inflation environment generally. We see discretionary spending rising 4.7% in 2015 and 2.8% in 2016. Please contact us to discuss further.

Global Differentiation

This note examines differentiating performance and outlooks regionally and by asset class. We sees an increasingly divergent world with the US as the continuing safe haven. We argue that the UK faces increasing short term uncertainty, largely as a result of increasing political risk but also as a consequence of relative failure in controlling the fiscal deficit. Europe remains mired in our view. The upshot is continuing loose monetary environment that will drive equities higher. Bonds too will remain in bubble territory. Please contact us if you would like a copy of the note.

Walbrook at IEA Conference in Scotland

Walbrook Economics took part in the Institute of Economic Affairs Conference in Edinburgh presenting an outlook for the UK Economy. The theme was extremes examining the the degree of disequilibrium that remains despite improving GDP. A copy of this presentation is available on request.