Concerns that the outlook for the UK economy may be less positive than the BoE’s assumption would now justify an expectation of less than two rate rises in the next three years. We see potential downside risks to the economy and to the outcome of the Brexit negotiations. As such, we think being overweight stocks that get most of their revenues from within the UK, such as many mid- and small-cap stocks, is a potential risk.
Nandini Ramakrishnan is global market strategist of JP Morgan Asset Management
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