We think that both the Fed and the BoE are finished hiking interest rates and will cut by more than investors are discounting over the next couple of years. We also expect the US and UK economies to tip into mild recessions before long. These similarities help explain why we expect sovereign yields in both to fall by similar amounts over the next two years or so, and expect cable to trade broadly sideways, on net, over that period. But we think UK equities will underperform their US counterparts over that period.
In view of the wider interest, we are also sending this Asset Allocation Update to clients of the UK Markets service.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services