Its first Budget provided the new(ish) Labour government with the opportunity to re-set the UK’s relationship with business, encourage investment in UK assets and shore up its stockmarket. So to what extent has it succeeded in shifting the outlook for UK stockmarkets and making the UK relevant again?
The pre-budget backdrop was not good. Calastone reported that investors withdrew a net £2.71bn from funds in October – a record high, following early selling activity in September. However, the group reports that sell orders dropped 40% overnight as Capital Gains Tax (CGT) hikes took effect on Budget Day. Equally, while UK-focused funds bore the brunt of the selling, every equity fund sector saw outflows.
The UK has been unpopular for some time. Discretionary fund managers have been gradually reducing their weighting in UK assets for more than a decade. Analysis from ARC shows the fall in the weighting in…
