Investment trust insider opportunities in troubled times – James Carthew: Where trust opportunities lie after another Tory regime collapse
The U-turns, clumsy mistakes, muddled thinking and general ineptitude of current UK economic policy may have killed any hope of a relatively shallow recession in the UK. For investors, the way forward is hard to fathom, since at any time the Conservatives may enact another regime change.
However, it seems to me that overseas investors will apply a higher risk premium to UK assets for some time to come and scrutinise future fiscal and trade deficits more closely than they might have before this debacle.
This just compounds the wider problems of US inflation, which is proving more persistent than the Federal Reserve had hoped, and slower Chinese growth as that country sticks to its zero-Covid policy. It also does not help that some UK pension funds appear to be dumping assets of all kinds at distressed valuations.
The renewable energy sector has taken a serious knock from the prospect of higher discount rates, the reversal of the plan to cut corporation tax, and a clumsy price cap proposal fixed at an as-yet undisclosed price that creates more uncertainty and may even ignore the reality of power purchase agreements in place. For the sector’s brokers, this is a real blow as fundraising in this area has bankrolled them for several years.
However, it’s an ill wind that blows some good…. read more here