UK Archives - Variant Perception

Worth Revisiting UK Equities

Apr 19, 2018 | UK

The tectonic political shocks of the last two years have left UK equities feeling unloved. In US dollar terms, UK equities have returned -5% year-to-date, underperforming the majority of developed and major emerging markets (top-left chart). This is despite the...

The UK’s Deleveraging Failure

Apr 16, 2018 | UK

The synchronised nature of the global economic recovery has fanned speculation that the post-crisis deleveraging in developed countries has finally come to an end. However, we err on the side of caution and cite evidence from the UK, which suggests there has been...

Rising Stress Levels in UK Households

Aug 24, 2017 | UK

Over 60% of the increase in GDP since 2010 has been driven by household expenditure. While nominal household consumption has increased by 25% since 2010, gross disposable income is up just 19%, with the financing gap bridged with unsecured leverage and a drawdown in...

UK Gilts Overvalued

Jul 14, 2017 | UK

UK gilts are overvalued, currently yielding only 1%. The UK has seen a boom in consumer credit in recent years, with rates around 10% YoY in the main categories of consumer lending (top chart). Rising inflation has pinched wages, with the result real wages are now...

Long GBPUSD: Short Squeeze and April Seasonality

May 5, 2017 | UK

(from our Weekly report of 4th April 2017) GBPUSD remains range bound, with the triggering of Article 50 last week widely expected by the market. Since the Brexit vote, speculative positioning on GBP has been persistently very bearish; however, the latest Commitment...

In the UK, the Answer is Not Blowing in the Wind

Aug 31, 2016 | UK, Uncategorized

In this short blog, we will show how we looked at the UK economy going into the UK’s referendum to leave the EU, and why our approach meant our forecasts were not reliant on the referendum’s result. We also show what our indicators are telling us now....

Weaker Sterling and the UK’s Profound Reliance on Foreign Capital

Jan 19, 2016 | UK

The UK’s reliance on foreign capital is astounding. This is crucial to appreciate the broad-based decline in sterling we have seen over the past 6 months. As we have reminded clients frequently over the past 2 years and more, the UK now runs the largest twin...

A False Sense of Security in the UK

Jun 24, 2015 | Featured, Fiscal Policy, UK

The UK’s economy is increasingly beginning to resemble how it looked prior to the financial crisis – this is not healthy and leaves the UK vulnerable to a repeat of the last crisis. In this presentation, we discuss that UK growth did eventually return...

Credit in UK Booming Again; Wage Growth Has Lagged

Jun 15, 2015 | UK

There are continuing signs the UK’s economy is increasingly resembling itself prior to the financial crisis. House-price growth has cooled of late, but is still growing at 4.6% YoY, down from almost 12% last summer. Consumer credit is also growing at a healthy clip,...