View more on these topics

Mott says inflection point pending for UK economy

PSigma income manager Bill Mott believes that an inflection point is becoming more likely as the government looks to stave off a possible recession.

Mott says that market data over the next month or so is likely to trigger a policy change by either the government or the Bank of England, with the likelihood being a cutting in interest rates.

Mott has been highly critical of the MPC’s decision to hold interest rates at 5 per cent, claiming there are no inflationary pressures.

He says: “We remain of the view that the Bank of England are following an inappropriate interest rate policy and that domestic inflationary pressures are almost non-existent.

“We also believe that the risk of current inflationary trends feeding through to the secondary effects of wage push inflation are no greater if interest rates were to be cut, than if interest rates remain where they are.”

Mott highlighted the mortgage approval figures due on May 27 as the catalyst of the market data that is set to be “political dynamite” that will create the crunch scenario for both the government and Bank of England.

“As the weeks progress the economic stats will get progressively worse. This should trigger a change in policy. If the economic numbers over the next three months are not as bad as we expect, then the domestic cyclical areas are cheap on the basis that they are discounting a much worse environment then would then be the case.”

Mott’s fund is currently biased towards financials and domestic cyclicals, he also has significant investments in oils, telecoms and pharmaceuticals.

“The only area of the market where we have no exposure is the mining sector, where in addition to these stocks having no yields, we believe that a ‘bubble’ psychology exists.”


Brexit: what to expect in the aftermath

James Dowey, Chief economist & CIO In these very early stages following the “Leave” win any prognosis is by its nature highly tentative. It will be weeks before we are able to measure the acute impact of the result on the UK economy, and there are clearly no close historical parallels on which to base […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm