UK trading position and options post BREXIT

It is a cliché but Britain is a trading nation. Last year the UK exported £669bn of goods and services to the world equivalent to 36.5% of GDP. It is therefore critical to UK economic health that an optimal trade deal is reached as trade growth is a key driver of economic and employment growth and ultimately prosperity.The note looks at the UK's current asymmetric trading position: good at services and global trade, very poor at goods and EU trade resulting in the largest current account deficit in the G7 and outlines the post BREXIT options available.

Carney 'don't panic don't panic.'

Perhaps the rate cut was not a surprise, but agreeing to buy up 7% of the corporate bond market (£10bn) to drive down yields and increasing QE by £60bn to a staggering £435bn was way more than we expected. Moreover, broad hints of a further rate cut to near zero were suggested. It seems there is no limit to the strength of the dose of medicine the Bank are prepared to deliver in order to abolish any cycle.

A crisis of leadership and politics not economics

The last few days have been brutal for investors. The unthinkable happened against all the bookies odds and City’s expectations. While the FTSE 100 has declined by just 4%, since the close of Thursday night this belies some substantial volatility with major moves in Sterling, bonds and UK domestic cyclicals and financials.We view the primary risks as one of politics not economics, but political risk could lead to an economic one if not handled properly. Please contact us for a copy of the note.

What if the unthinkable does happen and it's BREXIT

A week today we will know. Will we stay or will we go? The unthinkable is now a real possibility and this note, which assumes a Leave vote, simply as that is the more complex capital markets result, looks at the immediate aftermath, the politics of it from a UK and EU perspective, the likely negotiating positions and battle lines, the implications for Scotland and the EU and perhaps our core assumption - the Machiavellian view, which we outline in the note.

Walbrook Economic Income Monitor

This note looks at the long de-rating of equities relative to gilts and examines the likely trends from here. Equity income over the last decade has grown steadily, despite all the problems the financial sectors have seen. It is 28% higher in absolute terms than it was in 2008. The outlook over the next couple of years is more troubled given risk to oil and mining income. However even on a worst case scenario (far worse than we expect) the real income return exceeds 3% with a re-based level of growth. It screens for secure growing income. Please contact us for a copy.