UK election: Things can only get better?

With inflation seemingly under control and the growth outlook improving, we believe July’s election will offer many investors a chance to reevaluate UK equities, where valuations are attractive and return prospects look strong.

Key takeaways:

- With the economy turning a corner, we think UK equities offer some of the best investment opportunities in developed markets today.
- Depressed valuations and a potential reversal of outflows from UK assets are two factors boosting return prospects for UK equities.
- With the opposition Labour party ahead by nearly 20 points in the polls, they look likely to win a clear majority in the general election that Prime Minister Rishi Sunak has called for 4 July.
- Radical spending plans have been absent from the Labour campaign and fiscal headroom is limited, meaning this election poses far less risk to markets than previous ones.