Stars align with British stocks

After years of sluggish returns, things may turn around for Britain’s biggest stock in the
2022, according to strategists at Goldman Sachs. “This year, the FTSE 100 should benefit from multiple endorsements”write investment bank strategists in notes to clients.

A rate hike will benefit stock values, while forecasts of rising prices for commodities such as oil and copper will also boost UK benchmarks.

From Brexit referendum, The FTSE 100 has lagged behind gains across the index, although Goldman has attributed only a small part of this underperformance to the splitting of the UK and the European Union.

Tech champion missing from index

A more important factor, in the opinion of experts, is the absence of indicators of technological champions, which are dominated by banks and raw materials giants.

The imminent tightening of monetary policy in markets developed to curb rising inflation would be a boon this year for the FSTE 100, given its distinctive composition. However, in the medium term, the shortage of high-growth companies will likely hold back the UK’s key benchmarks.

“Pension funds and insurance companies have been in seller mode and households tend to keep their wealth in deposits or housing, “the strategists wrote.” The UK needs to attract foreign investment, “because” the lack of domestic supply for equities may also be a factor holding back the valuation. “.

Matt Thompson

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